SPECIAL REPORT: Conservative billionaire warns states and cities are hiding trillions in debt through accounting tricks

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Conservative billionaire Joe Lonsdale posted a sobering analysis on social media over the weekend, explaining a corrupt scheme being carried out in multiple cities and states to hide trillions in debt by using “accounting tricks” that would land most private sector CEOs in jail.

Lonsdale, 42 is an entrepreneur, investor, and philanthropist. He has co-founded multiple companies, including Palantir Technologies, Addepar, and OpenGov. Lonsdale grew up in liberal Silicon Valley, but in 2020, he moved his family and the headquarters of his venture firm from San Francisco to Austin, Texas.

READ Lonsdale’s important announcement in the social media posts below:

1/ States and cities are hiding trillions in debt through accounting tricks that would land private sector CEOs in jail. Time to expose the scandal.

To stop crony leaders from hiding massive debts, the incoming administration might fix our misguided govt accounting standards.

2/ The system enabling the nonsense: GASB, which sets government accounting rules. Unlike strict business standards, GASB lets states:
– Report loans as “revenue”
– Hide most pension debt
– Use asset sales to fake balanced budgets

3/ Take CA. Newsom claimed a budget “surplus” — then used ~$15B of it for union pension debt that only exists because they’ve been obscuring the true cost of pension promises (100’s of billions of hidden debt) for decades.

4/ Or CA’s managed-care tax scam: They tax health plans, use that to get federal Medicaid matching funds, then quietly return the money to plans. Result: $19.4B taken from federal taxpayers.

5/ Meanwhile, Oakland, CA, is trying to “balance” their budget by selling the Coliseum. One-time asset sale masquerading as sustainable revenue. Pure fiction.

6/ State/local govts spend trillions every year. When they hide true costs at the behest of plundering special interests, we get teacher layoffs, crumbling infrastructure, and surprise tax hikes — and a big bill coming due for our kids.

7/ The SEC would punish any company playing these games. We need a fix.

If the GASB is going to bother existing, it should do its job:
1) Force state/local accounting to pass the “common sense” bar and resemble private sector standards
2) Stop counting asset sales as revenue

8/ These two changes would expose trillions in hidden debt. That’s why many bureaucrats, corrupt government unions, and other government cronies will fight so hard against reform.

We can’t let them win! I love seeing smart friends like Scott Bessent at Treasury; let’s fix this.

On Tuesday, Lonsdale posted an opinion editorial in Fox News, titled, “Stop funding the woke and the stupid.”

Below is an excerpt:

The new Trump administration has a generational opportunity to expunge anti-merit identity politics that have infected and disabled so many American institutions and to bring back merit. So do governors and legislators in the states where Republicans won mandates in this election, too.

For nearly a century following the Pendleton Act of 1883, our federal government used difficult tests to help fill departments; competence was a non-partisan goal. In the 20th century, leaders agreed that we need bright talent to win wars, advance in science, and achieve feats such as the moon landing. By the 1970s, less than 10% of test takers scored high enough on government PACE exams to qualify for senior leadership.

Those tests died in the late 1970s. Because of racial disparities in the results, activist courts ruled that even if tests were predictive of job performance, they were illegal because of the “disparate impact.” Soon, the government was hiring people who would have failed these tests — less qualified people from all backgrounds. President Jimmy Carter’s 1979-80 Democratically-controlled Congress also made it harder to hold government workers accountable. Since then, the bureaucracy has become dumber and dumber.

Over the last decade, the stupidity accelerated: a focus on identity politics meant that merit was actually an anti-priority. As the Biden administration tried to preserve in amber various forms of racial handouts and discrimination, and its failing bureaucracy continued to regularly fritter away billions of dollars, Republicans slowly woke up to the rot.

Lonsdale is a co-founder of the University of Austin, established to combat the ‘woke’ universities. Bloomberg reported earlier this month:

In late 2021, Lonsdale co-founded the University of Austin with historian (and former Bloomberg Opinion columnist) Niall Ferguson, journalist Bari Weiss and others as an antidote to what they see as “woke culture” in higher education. During the past few years the private school had been offering small seminars for high school-aged students in preparation for the university’s official launch this fall.

One class, “Ideology: Concept and Clash in Contemporary Politics,” helped students examine influential ideologies like fascism, communism and Islamism as well as “the ideological movement of our time — identity authoritarianism, often known as wokeness or wokeism,” according to the course website. Another seminar, which was offered free of charge, had students investigate government successes and failures across war, the environment and other policy areas, and used Plato’s dialogues to help them “speak intelligently to debates we will inevitably have” during the 2024 election.

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