"The Big Lie"
May 2, 2014
We live in a Ponzi Economy and a Ponzi Financial System. The U.S. Government is running this Ponzi scheme ("The Biggest Ponzi Scheme on the Planet") which I have named USAPonzi. LBJ started this massive "Con Game" in 1969 with the "Unified Budget" and the continued use of Cash Accounting. Everybody liked the idea so much that we have all seemed to go along with "The Biggest Lie ever told" for now 46 years.
What is "The Big Lie"? It is making unsustainable promises to pay social benefits to the U.S. Citizenry without making any plans for how these promises will be met. By using Cash Accounting the U.S. Government is only making financial plans for how it will pay the current year spending and is totally ignoring the "future year" commitments. The secondary problem is that the U.S. Government is also spending more in the "current year" than it can afford.
GAAP Accounting is absolutely required to assess the magnitude of these future commitments.
"The Big Lie" has so far created a GAAP Obligation of $95.4 Trillion but the Government has only told the U.S. Citizenry (and the world) about our Cash debt of $17.4 Trillion. The difference between the GAAP Obligation of $95.4 Trillion and the Cash debt of $17.4 is the $78.0 Trillion Present Value of the Unfunded Liabilities created by the Government's promises to pay future Social Benefits. The Government's current Cash Accounting methodology does not report this "little" $78 Trillion public liability so that is the cumulative measure of "The Big Lie"
What is lying? I contend that it can be "telling a falsehood" or it can be "failing to tell the truth". Either way, in my book, is lying.
The U.S. Government has been openly and blatantly lying to the U.S. Citizenry and to the rest of world for 46 years and yet almost everyone still chooses to believe them. The U.S. Government says I promise to pay $128.9 Trillion (Present Value of $78 Trillion) in social benefits over the next several decades but I do not have a penny in the bank and I am also in debt by $17.4 Trillion but trust me I will be able to pay you. How stupid do they think we are?
The $78 Trillion Present Value of this future social benefit stream is the amount we should have in our social benefit trust fund today earning interest at the rate of the U.S. Treasury long bond to fund this $128.9 Trillion future benefit stream of committments as they come due. Of course we have nothing in that trust fund today but if we did have that $78 Trillion where would we invest that money? Everyone knows that we have way too much debt but we "only" have $12.4 Trillion of public debt that we could buy to earn interest on this trust fund money. Of course at that point we would be paying interest to ourselves. But where would we invest the other $65.6 Trillion? This demonstrates the total absurdity of the magnitude of the social commitments that the U.S. Govermment has made. But until we start using a reasonable accounting methodology the Congress can blindly make these outrageous and asinine commitments. How stupid do they think we are?
Their answer is that we have this wonderful income stream that we can tap into by taxing the future U.S. Citizenry and then we can pay for these promises. They even tell us that they are spending a lot more than that same wonderful income stream is bringing in right now and have been doing so for years but they still expect us to believe them when they say they will pay this $128.9 Trillion of social benefits. How stupid do they think we are?
This story sounds a lot like selling houses to people with no money, no job, and no (or inadequate) income and expecting them to be able to pay the mortgage. How did that work out for us? How stupid do they think we are?
Well we must be pretty damn stupid because the U.S. and world economy still expects the U.S. Government to make good on these future promises even though simple mathematics demonstrates that it is not possible.
And the Government continues to use an accounting system that fails to expose the magnitude of these ever increasing false promises.
The U.S. Government is lying through it's teeth and yet the world, the global economy, and the global financial system is buying into "The Big Lie"!
The Unified Budget is based on a corrupt and fraudulent accounting system and everyone in Washington, everyone in business, everyone in the financial system, everyone in the media must be fully aware of this by now but amazingly almost everyone is content to "not speak the truth".
The United States of America has been conning the world with "The Big Lie" for the last 46 years. We won "The Cold War" with "The Big Lie". The Soviet Union recognized (they must have a better accounting system than we do) that they could not keep up with our military buildup that has been "financed" by "The Big Lie".
We have made the United States of America appear to be the most prosperous and productive nation on the planet with "The Big Lie".
We have created 1,426 billionaires with "The Big Lie".
We have created millions of millionaires with "The Big Lie".
We have created hundreds of billion dollar corporations with "The Big Lie".
We have created 287 billion dollar hedge funds with "The Big Lie".
(see U.S. Total Assets Bubble)
But politicians, business people, financial people, media people, and the people on the street are willing to go along with "The Big Lie" because they know that the party will be over when "The Big Lie" is finally acknowledged.
The people that are benefiting from "The Big Lie" feel that they can distance themselves from "The Big Lie" since it is "The Government" that is telling "The Big Lie". But as Abraham Lincoln said we have a "government of the people, by the people, for the people" so the people will have to step up and correct the problem that "The Government" has created.
When Bernie Madoff acknowledged that he was running a Ponzi scheme our "Government" was righteously (and properly) enraged that someone would conduct such a despicable act but when the Government pulls a stunt that is 1000X more egregious it is considered to be okay. Our "Government" quickly convicted and imprisoned the key conspirators in the Madoff fraud.
When Enron management used fraudulent accounting to make their company appear to be highly successful and the fraud was exposed our "Government" was righteously (and properly) enraged that a company would conduct such a despicable act but when the Government pulls a stunt that is 1000X more egregious it is considered to be okay. Our "Government" quickly convicted and imprisoned the key conspirators in the Enron fraud.
Why is it acceptable for the Government to run a Ponzi scheme when the Government frowns upon the idea for private sector people and businesses?
Why is it acceptable for politicians, business people, financial people, media pundits, and the general public to remain silent about what is almost universally known to be "The Big Lie"?
Politicians, business people, financial people, media pundits, and the general public are willing to take advantage of the money that is being thrown off by "The Big Lie" (USAPonzi) since they can claim that it is not their "doings", it is the Government that is running this fraud.
The shrewd politicians, business people, and financial people have been getting rich and powerful off of USAPonzi so there is no way they want it to stop. But a Ponzi scheme is a Ponzi scheme is a Ponzi scheme.
And the only way a Ponzi scheme can end is with an implosion.
But no one in a position of authority or respect is prepared to state what everyone knows or should know, i.e. that we are living in a Ponzi economy and concealing it by using a fraudulent accounting methodology, so we will continue to let USAPonzi spew off $535 Billion of phantom money every month which is $17.6 Billion every day and $12.2 Million every minute.
It is not the Federal Reserve's Quantitative Easing that is causing our fiscal and financial crisis. It is the U.S. Government's GAAP basis deficit spending (and committing) of $6.4 Trillion a year that is causing the crisis. And since the Government claims that our deficit (FY2014 on a cash basis) is "only" $514 Billion, that difference ($5.9 Trillion) is the current period (FY2014) measure of "The Big Lie".
So the Government has lied to us by a total of $78 Trillion since 1969, is increasing the amount of this lie by $5.9 Trillion in FY2014, and this annual change in these Unfunded Liabilities is increasing exponentially; all because they are using corrupt and fraudulent accounting.
That is not "a little white lie". That is "The Big Lie"
Next Page: Tax Rate Absurdity