Accounting our blessings
So, yesterday I finally got round to reading Mehdi Hassan’s The Debt Delusion from the Summer of Unrest series, and it got me thinking. Specifically, it got me thinking about balance sheets.
NO, DON’T GO AWAY, THIS IS IMPORTANT!
Specifically, it linked back in my mind to the chapter on inheritance in Jilted Generation. In that chapter, the authors touched on the subject of national inheritance. This is where the balance sheet comes in.
I only have the most rudimentary understanding of accounting, but it should be enough to explain what I was thinking about. A balance sheet is, at it’s heart, a very simple document. It shows a monetary value for useful stuff you’ve bought (technical term: assets), the amount of money you expect to be paid between now and the next time you produce a balance sheet (for the government this is mostly tax revenue) and it shows how much money you plan to spend between now and the next balance sheet.
Now, here’s the interesting bit: I only ever hear from governments about the last two bits, the tax revenue and their spending plans. I’d quite like to hear about the assets too.
Because here’s the thing. They’ve been bought with my money. And I’m not just talking about concrete things like schools, hospitals and council houses. If we go by my definition of assets above, then it includes the value of useful stuff like; the extra tax revenues we can collect as a result of requiring everyone to go to school until 16 and having, as a country, a good baseline education; the irreplacable on-the-job experience of the switchboard operator who’s worked in the local council for 20 years, and always knows exactly how to calm down an irate caller and direct their call, saving time and money for everyone else; all the training we pay for that goes into making a world-class hospital consultant.
But, there’s a problem with this. If I look back 20 years, I can see things which were at that point paid for using taxpayer money, which now aren’t. What happened to the money we invested in these assets? What is the money that would have been spent on those things now being spent on? Does the treasury have any ongoing obligations towards things we’ve ostensibly sold (eg, Railtrack)?
I guess the point of this post is to ask if anyone has done any analysis of the value of total government assets over time? Can this be compared to the revenue that was received as a result of owning those assets? Is there any sort of useful analysis that could be done relating asset values with other budget, government spending and tax revenue data? Does this data even exist in the public domain? If not, can it be obtained, and if so, how?