For analysts like Rauh, the main culprit is the governmentalaccounting standards board (GASB), whose discounting metrics are a point of contention for economists.
But his reasoning is worth examining, because there is no question he has uncovered some very perverse incentives embedded in the rules put forth by the GovernmentalAccounting Standards Board.
One proposal, from Senators Jon Corzine and Christopher Dodd, is to look into creating a new oversight body akin to the quasi-governmental Public Company Accounting Oversight Board.