The Truth of July 4

Give Me Truth in Accounting or Give me Death!

PatrickHenry

 

Here’s a related quote, arising about a year later:

 “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…”

The sentences above introduced the July 4, 1776 Declaration of Independence, inspiration for what became the United States of America; a new country based (in theory) on principles like a rule of law, not the arbitrary whims of unaccountable tyrants.

A variety of influential leaders generated the ideas in the Declaration of Independence. The principles in the Declaration were also rooted importantly in a document developed five centuries earlier – in the same country from which the American colonies declared their independence.

In 1215, barons in England secured the Magna Carta. This agreement with King John helped cement a principle that the actions of the monarch were accountable to a Rule of Law, one that required the consent of the governed. The grievances of the barons were driven importantly by fiscal stress arising from the monarch’s spending, as well as heightened concern over the integrity of the monarch’s reporting:

 “A major grievance of the barons was that they were being taxed and asked to raise taxes on their own tenants for a given set of reasons (e.g., fighting a foreign war in France, going on a crusade, etc.), and then the taxed-for event simply did not happen. This is squarely analogous to falsifying public accounts and gave rise to the demand that taxes not be raised ‘without the consent of the common council of the realm,’ ancestor of modern parliamentary or congressional approval.”

Walker F. Todd
Research Fellow, AIER
(American Institute for Economic Research)
 

This week, as we celebrate our July 4th holiday, we also celebrate the mission of Truth in Accounting. Truth in government accounting is more important than ever for securing a Rule of Law, a government by and for ‘We the People’, amidst heightened fiscal stress at local, state and federal government levels.