The USA is Cheating on the World
Sept 6, 2014
The Government of The United States of America has been running a massive Ponzi scheme (see www.usaponzi.com) since FY1969 when LBJ created the "Unified Budget" and continued to use Cash Accounting. As a result, the United States of America has been cheating on the rest of the world for now 46 years.
LBJ and the 90th Congress started this lying and cheating in 1968 but every president and every congress since then has agreed to continue to lie and cheat. By not taxing the U.S. citizens and businesses enough to cover the Government's spending and committing, the Government is creating massive GAAP basis deficit spending ($6.4 Trillion in FY2014) that is artificially stimulating the U.S. and global economy. This GAAP basis deficit spending is also making the wealthy citizens and businesses appear to be much more wealthy (by $97.5 Trillion as of Sept 1, 2014) than they really are and makes U.S. businesses appear to be much more profitable and valuable than they really are.
I would say that most of the general U.S. population has a sense that the U.S. Government is making social benefit promises that they cannot keep but it is likely that only a very few of them have a proper appreciation for the size of the gap between the Government's social benefit promises and financial reality. In fact I would bet that very few of the members of Congress have a proper appreciation for the size of the gap between the Government's social benefit promises and financial reality because they too are being fooled by the corrupt and fraudulent accounting that the Government is using.
And I would bet that most of the general U.S. population has no clue that the U.S. Government is printing money and giving it to the wealthy because of this massive undertaxing.
And I would bet that most of the general U.S. population has no clue that the U.S. Government has not made one penny of contribution to the trust funds to finance the future social benefit promises since FY1969.
Because of USAPonzi, the U.S. Government is dramatically overspending and overcommitting.
Because of USAPonzi, the U.S. Government is grossly overpaying themselves.
Because of USAPonzi, the U.S. Government is grossly overpaying Government employees and contractors.
Because of USAPonzi, the U.S. Government is grossly overpaying for healthcare, drugs, and insurance.
Until we have rational accounting and fiscal responsibility by the U.S. Government we will continue to have outrageous imbalances in our economic and financial systems. With current accounting processes, we are running what is called an open loop financial system; the Government can spend whatever it wants to without having to be accountable for how it will be paid for.
It used to be that Government workers were referred to as "public servants" which implied that they were making financial sacrifices by taking a government job. Because of total fiscal irresponsibility by the U.S. Government, largely influenced by USAPonzi, Government workers are now some of the most highly paid people in the country since there is no apparent limit to amount of spending that the U.S. Government can authorize. These expenditures just get put on the Giant Credit Card of USAPonzi which currently has an outstanding balance due of $97.5 Trillion as of Sept 1, 2014.
Most senior business executives must know about this lying and cheating but it is appearing to make them rich so they say nothing and continue to reap what will prove to be illusionary financial rewards.
Most senior Government officials must know about this lying and cheating but it is giving them access to what is now a very lucrative lifestye and an opportunity to get rich on the counterfeit money that USAPonzi creates so their primary goal is to get re-elected or to keep their current overpaying job so they also say nothing and do nothing.
As The Anatomy of USAPonzi explains, a lot of people have to go along with this fraud to keep it going, including the Chairman of Securities and Exchange Commission (see SEC Letter Apr 14, 2014) and the last four Chairmen of The Federal Reserve System (see Fed Chairmen Co-conspirators in USAPonzi).
This Ponzi scheme has, as of Sept 1, 2014, created $97.5 Trillion of counterfeit money, as measured by GAAP accounting, that has been released to U.S. citizens and U.S. businesses by systematic undertaxing. And USAPonzi is a gift that keeps on giving. Every year the amount of counterfeit money that USAPonzi distributes to U.S. citizens and U.S. businesses increases exponentially since this scheme is creating a GAAP Obligation (now $97.5 Trillion as of Sept 1, 2014) which is a combination of real debt and virtual debt on which we must pay real interest or accrue virtual interest. Therefore each year our GAAP basis deficit spending increases because the GAAP Obligation is larger due to the prior years GAAP deficit. Our Obligation is our debt plus our Unfunded Liabilities, i.e. it is our real debt (money we have spent that we do not have) and our virtual debt (money that we have committed to spend but do not have) on which we must pay interest.
Until this corrupt and fraudulent accounting is corrected and our GAAP basis budget is balanced, we will continue on a exponentially increasing path toward an infinite amount of counterfeit dollars that will be in circulation. The annual rate at which we have been printing these counterfeit dollars has been nominally 5% of U.S. Total Assets (see Inflation a Byproduct of USAPonzi). In FY2014, our GAAP basis deficit spending is projected to be $6.4 Trillion and as of Sept 1, 2014 our U.S. Total Assets were estimated (by www.usdebtclock.org) to be $112.6 Trillion ($6.4T/$112.6T=0.057 or 5.7%). So $97.5 Trillion of these U.S. Total Assets are backed by the future taxpayer and he/she will never have that kind of money. So U.S. citizens and businesses are buying products and services from ourselves and from the rest of the world with these counterfeit dollars.
That is why I say the United States of America is cheating on the world. We are spending counterfeit money that has been created by undertaxing the U.S. citizens and businesses.
This is why the United States of America looks like it is so successful and productive. Because the U.S. Government is undertaxing the U.S. citizens and U.S. businesses by $17.6 Billion every day and therefore is creating $17.6 Billion more counterfeit money. This is why we appear to have so many rich people in the USA. This is why the equity markets continue to go up. This is why real estate prices continue to go up. The U.S. Government is printing money, by undertaxing, like it is going out of style. And frankly the dollar will go out of style with current fiscal policy since it will eventually be worth next to nothing.
The USAPonzi Long Term Projection shows that if we keep operating with this current corrupt and fraudulent fiscal policy, we will have $98.6 Quadrillion (a Quadrillion is a 1,000 Trillion) of counterfeit money in circulation by 2150. But that also means that in 2151 the then future taxpayers will owe $98.6 Quadrillion. As this USAPonzi Long Term Projection demonstrates, both our GAAP Obligation and our National Debt will continue to spiral out of control.
Even the virtual inventors of the virtual currency Bitcoin have promised that there will only be a limited number of Bitcoins in circulation.
The U.S. Government is lying and cheating and the 1%ers are happy to let them because it is appearing to make them very, very rich. So the "ruling class" and wealthy are both prepared to go along with this fraud. And the republicans say no more taxes, cut the benefits, and do not increase the minimum wage. And the democrats say more taxes, more benefits, and raise the minimum wage.
I say that the first thing we must do is balance the GAAP basis budget and face the reality that we cannot continue to print money so that Washington can spend and commit to spend whatever it wants to without consideration for how they will pay for it.
This means proper accounting, less social benefits, less spending, and more taxes. Let's get on with it.
The only thing that can keep USAPonzi alive and retain the viability of the U.S. Dollar, is the hope that one day the future taxpayer will find a huge pot of gold ($97.5 Trillion as of Sept 1, 2014) at the end of the rainbow and every day the size of this required pot of gold gets bigger by $17.6 Billion and that daily increase is expanding exponentially.
We have got to face the reality that the future taxpayer has only a limited capability to pay and therefore we have a limited capability to spend and commit to spend.
Our Government's current financial system is a patently absurd, asinine, and stupid bunch of lying and cheating. Other than that I quess it is okay.
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