The "Hot Potato" That is Fiscal Accountability

"Passing the Hot Potato"

In terms of accountability, very often frustration is expressed with the low levels of responsible persons answering for their negligence (or active involvement in a crime).  This applies to frustrated and unanswerable persons in both the government and corporate sectors.

The matter of handling these tasks properly in the future cannot be addressed without considering the historical track-record of how successfully past regulations have held responsible persons' feet to the proverbial fire and serving appropriate levels of fairness and justice. 

Here are the most prominent things being said about potential red-flag accountability issues that need to be handled, and soon.

1. Tax negligence needs to be spot-checked with scrutiny, system-wide.  Vast amounts of tax revenues are lost along the whole filing process (Todres, 2014).  Between late filing, non-filing, negligent preparation, and deliberate tax fraud, the existing tax code should be producing much more money that it does.
2. Public benefit programs such as housing financing for the elderly is taking on increasing demand, as many developed economies face aging populations.  This is a concern that government treasuries and regulators have largely not dealt with yet, and if unaddressed, could haunt more than just their career (Ng, et. al., 2018).
3. The relationship between government guarantees for corporate accounting needs to be articulated with far more clarity and transparency than it is.  Details on where within government budgets the provisions come from are frequently non-existent on national accounts and barely discernible on corporate financial documents (Heald & Hodges, 2018).  In the UK this is seen to be the case, but has been submerged beneath the cacophony of Brexit coverage. I would argue that with Brexit on the horizon, now more than ever is the time to be talking about government & corporate tax regulations.  As its own concern, it presents many large-scale dilemmas that could affect aggregate small business, equity markets, currency exchange rate stability, and believe it or not there's even national security implications here.
4. Credit markets need regulatory guidelines that don't exist, specifically for micro-lending institutions (which often end up being subsidiaries of much larger companies) like Rocket Mortgage.  But credit crises could swell up from a number of places, so take your pick.  Student debt in the US, automobile financing, pay-day loan houses, car-title loan shops, all of these lending sources have one frightening thing in common: regulators have no detailed and realistic plan in place for quelling potential credit shocks (Linarelli, 2018).

The status quo has been to pass the hot potato of responsibility because nobody wants to take the heat or get burned for people losing money.  It's time for regulators to scrap the strategy of turning a blind eye, and to clearly explain that which is shrouded in the obscurity of occult ambiguity.

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Reference List

Heald, D., & Hodges, R. (2018). Accounting for government guarantees: perspectives on fiscal transparency from four modes of accounting. Accounting and Business Research, 48(7), 782-804.

Linarelli, J. (2018). Debt in just societies: A general framework for regulating credit. Regulation & Governance.

Ng, A. W., Leung, T. C., & Tsang, A. K. T. (2018). Social Enterprise for Elderly Housing: Policy for Accountability and Public-Private Responsible Financing. Journal of Population Ageing, 1-20.

Todres, J. L. (2014). Bad Tax Shelters-Accountability or the Lack Thereof: Ten Years of Tax Malpractice. Baylor L. Rev., 66, 602.