Chapter 1 What is a Ponzi Scheme?
November 22, 2015
A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.
The current U.S. Government fiscal policy (USAPonzi) fits that definition perfectly. The U.S. Government promises to pay social benefit returns that are irrational and unaffordable but does not collect enough tax revenue to pay these benefits leaving the cost of these social benefit promises to the next generation(s) of U.S. taxpayers and uses a corrupt and fraudulent accounting system to help cover up the scheme. The U.S. Government is using Cash Accounting rather than the appropriate GAAP (Generally Accepted Accounting Principles) Accounting in an attempt to conceal the magnitude of the public liabilities that USAPonzi is creating. GAAP Accounting is explained in Chapter 2.
This is exactly what the Madoff Ponzi did; promised investment returns that were irrational and unachievable, paid the early investors with money collected from new investors, and used corrupt and fraudulent investor account statements to conceal the fraud. Bernie Madoff then skimmed off some of the money from the new investors to be able for him and his cohorts to live opulent lifestyles.
The U.S. Government (the ruling class) is doing exactly what Bernie Madoff did. The ruling class has skimmed off $18.7 Trillion to overpay themselves so they can live opulent lifestyles and has undertaxed the upper class by $99.8 Trillion, so their upper class cohorts can live super opulent lifestyles and appear to be filthy rich with counterfeit money.
Financial data sourced from usdebtclock.org Nov 22, 2015.
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