April 24, 1995 12:00 PM

IN JANUARY, ROSS PEROT STOOD BEFORE the Senate Banking Committee brandishing a slim volume he claimed would tell them everything they needed to know—but probably didn’t—about where the U.S. taxpayers’ money goes. “If the government tried to write this report,” he said, “it would take two years, cost $10 million and you couldn’t read it.” In fact, The First Annual Report of the United States of America was prepared by Harvard University senior Meredith Bagby in just six weeks of her summer vacation

Initially, Bagby, 21, of West Palm Beach, Fla., published the book herself. But thanks to Perot’s unsolicited rave, she has sold it to HarperCollins for a low six-figure advance. Just hitting the bookstores, The First Annual Report cuts through federal budgetspeak to detail 1994 expenditures on such things as Social Security (which consumes 22 cents of every tax dollar), defense (19 cents), welfare and debt service (14 cents each) and education (3 cents).

Bagby got the idea for the book while listening to Harvard economics Prof. Benjamin Friedman bemoan the U.S. plunge into debt. “Never in the history of the world,” she recalls him saying, “has a debtor nation been able to maintain its power.” It was Bagby’s parents, Martha and Joseph, who gave her a format. “My parents are both in real estate,” says Bagby, “and they see annual reports every day. My mother said someone should write to the American people about where their money goes.” Finishing her opus just before the fall term, she invested $2,500 to print 250 copies.

Back at college in Cambridge, Mass., Bagby contacted publishing houses and sent copies to newspapers. No one bit except the Miami Herald. Then, at the end of January, one of Perot’s people asked for a copy. Soon Perot himself was on the phone, praising her work. “I was stunned,” says Bagby. “I almost said, ‘Are you sure this isn’t Dana Carvey?’ ”

She is naturally thrilled with her good fortune. But she rolls her eyes when she talks about writing the 1995 report. “I’ll begin working on it soon…too soon,” she says. Still, Bagby, who had planned a career in investment banking but is now rethinking it, knows she’s into a game that’s well worth the candle. “I dream big,” she says. “And I’m dreaming even bigger now that this has happened.”

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