While Donald Trump in his State of the Union address took a thinly-veiled swipe at Bernie Sanders when he declared that America would never, ever, fall victim to "socialism," analysts were aghast at a recent General Accounting Office report that the Pentagon was forced to make up to $35 trillion in "accounting adjustments," more than the entire size of the US economy, in 2019.

Socialism is just not the American way, declared Trump. Sanders is now leading the pack by 14% in the upcoming, all-important California primary, 22% ahead of Mayor Pete Buttigieg.

Media describing the report, such as Bloomberg News, carefully stressed that most of this amounted to double, triple, and even quadruple-counting billions from one account to another. "The same money as it got moved between accounts,” according to Todd Harrison, a Pentagon budget expert with the Center for Strategic and International Studies.

This double-counting gives the impression, in the Bloomberg piece, that it pretty much all balanced out, with not much missing. Pentagon spokesman Christopher Sherwood explained "how the dollar figures multiply":

"Sherwood said recognizing $800 million due a contractor in previously unrecorded payments 'requires multiple accounting adjustments that net to $0 but could total over $5 billion' in movement between accounts."

But, and here is the big fat "but," buried in the 13th paragraph of the Bloomberg piece. Sherwood says:

"What’s most important to an auditor is whether the adjustments 'are properly supported' because 'properly supported adjustments ensure financial statement values are accurate. We have made significant progress in reducing the number and dollar value of unsupported adjustments by over 30% and 70%, respectively.'"

If you are sitting in an audit with the hated taxman, poring over your returns for your say $80,000 a year job, "properly supported" means you need, for example, to come up with a receipt from the Boston Marriott if you want to write it off as a business expense.

"Properly supported" means, in short, you can prove where the money went. Otherwise it could have gone anywhere. To another bank account. To the Playboy Club. To your brother. If you can't show that the item is properly supported, you can't take the deduction.

What Happened to the Trillions Unaccounted For?

Make sure you hear me now. 70% of $35 trillion is, let's see, about $25 trillion that has been "properly supported," give or take. Fine and dandy. Good job.

Oh wait. That still leaves $10 trillion that is not properly supported. And $20 trillion the year before that, according to the report. The entire defense budget is shy of $800 billion a year. 10 trillion? The American taxpayer could be getting robbed blind and never know it.

Loans could even be taken out on Pentagon credit cards and papered over, with $10 trillion or $20 trillion in unsupported adjustments for the papering. That's room for a lot of "creative accounting," a term that came into fashion during the Enron Scandal.

To put it in the simplest terms possible, an "unsupported" adjustment means no one knows where the money went. If you can't support an adjustment, you don't make it.

The main spin in the Bloomberg piece is that it's all just kind of a crazy, big mess, "sloppy accounting," as could be expected from the Pentagon because it is so big. Right. Crazy like a fox.

Citibank is big too. And they keep track of your transactions to the penny. In fact, any big bank with even a fraction of this many "unsupported adjustments" would be shut down, and half of its board of directors in jail. Suggest that someone not qualified is pocketing some of these "unsupported adjustments?" Conspiracy theory!

We will wait for the day the Pentagon announces it is sitting on piles of unexpected cash and it doesn't know where it came from, which will be returned to the taxpayer. Instead of asking for record-breaking amounts in each yearly budget, adding to a record-breaking national debt.

One thing we do know. The rich have been accumulating an ever-increasing share of the overall pie over the last 40 years, while the middle class has been losing it. Just like Bernie has been saying ad nauseam. The wealthiest one percent of the population has gone from holding less than a quarter of all U.S. assets in 1980, to more than a third of those assets now. In the same time period, ninety percent of the population has gone from holding a third of the assets, to less than a quarter.

We know the rich have been getting richer, in terms of asset ownership, for reasons we don't fully understand. There's a huge party going on, and you're not invited.