Chapter 1Government and How It Works

“Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, and the hopes of its children. This is not a way of life at all in any true sense. Under the clouds of war, it is humanity hanging on a cross of iron.”

—Dwight D. Eisenhower

THIS CHAPTER WILL INTRODUCE the reader to various operational and organizational aspects of government. It spells out how and why government functions the way it does, from a fiscal perspective, setting the foundation for the ultimate exploration of the potential for government fraud and mismanagement. The examination of the cash flow that migrates into and out of the various governmental units is key. Prime examples of activities that can create opportunities for mismanagement and fraud are: the strong centralization of activity in the federal government, the significant financial transfers between the federal and state governments, ...

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