Op-Ed to the New York Times
USAPonzi-The Ponzi Economy of the USA
Aug 24, 2015 Emailed to NYT on August 24, 2015
As posted on www.usaponzi.com
To: The Opinion Desk of The New York Times
The Fiscal Policy of the U.S. Government is corrupt and fraudulent!
The Fiscal Policy of the U.S. Government is a classic Ponzi scheme!
The U.S. Government is filled with "Scoundrels, Liars, and Cheaters" that are willing to continue this corrupt and fraudulent Fiscal Policy!
The U.S. Government is using a corrupt and fraudulent Fiscal Policy so that they can overpay themselves and so they can appear to make their rich friends really rich, by cheating the common man, the underprivileged, and the rest of the Planet. The U.S. Government does this by using a corrupt and fraudulent Fiscal Policy which is a Ponzi scheme that is creating an infinite supply of counterfeit money.
The U.S. Government is dramatically overspending, is dramatically overcommitting to pay social benefits, and is dramatically undertaxing the U.S. citizens and businesses. The U.S. Government attempts to conceal just how much it is overspending, overcommiting, and undertaxing by using Cash Accounting vs. the proper GAAP Accounting.
This Fiscal Policy is a Ponzi scheme because the current U.S. taxpayers are not paying for the full cost of operating the U.S. Government and, as a result, $97.4 Trillion of Public Liabilities have now been deferred to the future U.S. taxpayer (see US Unfunded Liabilities (GAAP) on www.usdebtclock.org) which of course can never be paid.
Each and every dollar that is deferred to the future U.S. taxpayer becomes a counterfeit dollar in the U.S. and global economy and financial system. It is backed only by the future U.S. taxpayer and he/she now owes $97.4 Trillion and tomorrow will owe another $15.1 Billion. Of course the future U.S. taxpayer will never pay that money so it is totally counterfeit. This is an absolutely absurd Fiscal Policy. This is no different than the U.S. Government printing 15,100,000,000 counterfeit dollar bills every day and dropping them from a helicopter except that technique would seem to be fairer than the way the U.S. Government is currently distributing these counterfeit dollars.
The U.S. Government today gives the social benefit recipients a programmed amount (little bucks), overpays the ruling class as much as they feel like they can get away with (big bucks), but leaves most of these counterfeit dollars for the U.S. upper class (gigantic bucks). We now have $97.4 Trillion of these counterfeit dollars in the global economy and most of them are held by the elite population of the world. These counterfeit dollars will evaporate when USAPonzi implodes.
The United States of America looks wealthy, prosperous, and productive because the U.S. Government has a giant digital printing press (USAPonzi) that is making new and counterfeit money every day and giving it to its favorite people. No wonder people are clambering to get into the United States. They want to get access to some of this counterfeit money.
This Fiscal Policy operates under the fundamental assumption that the future U.S. taxpayer will be able to pay an exponentially increasing tax bill, that currently stands at $97.4 Trillion while the Fiscal Policy itself encourages more and more people to not work and collect the social benefit promises which will cause a reduction in future tax revenues. One would think that a reasonable person would understand that we have a basic flaw in this Fiscal Policy. We are making more social benefit promises because people are quitting work so that they can collect these social benefits and our tax revenues will decline because people are quitting work so that they can collect these social benefits. And we already have $79 Trillion of Unfunded Future Liabilities! And we have $18.4 Trillion of financial liabilities that the U.S. Government has already incurred. The U.S. Government and the entire Planet have their heads in the sand! Another day older and deeper in debt!
The U.S. Government is lying and cheating so that they can feather their own nest and can dramatically feather the nest of the most prosperous U.S. citizens and businesses.
This Fiscal Policy has produced "The Biggest Ponzi Scheme on the Planet", which I have named USAPonzi, that was launched by the introduction of the "Unified Budget" by LBJ and the 90th Congress for FY1969. The "Unified Budget" borrowed the money from the social benefit trust funds to pay for the Vietnam War and stopped "funding" the future social benefit promises. LBJ and the 90th Congress concluded that the U.S. Government and the U.S. citizens would both have a lot more money to spend if Government did not assess the taxes required to balance the budget. The U.S. Government has been operating USAPonzi for now more than 46 years.
This Fiscal Policy is causing the following issues:
USAPonzi is overpaying the direct and indirect Government employees and the Government related businesses, creating National Debt of $18.4 Trillion.
USAPonzi is committing to pay social benefits to U.S. residents that greatly exceed the U.S. taxpayer's financial capability.
USAPonzi is not funding these social benefit promises because the U.S. Government is not using GAAP Accounting that would recognize the financial liabilities for the future social benefit commitments. By not funding these social benfit promises and undertaxing the current taxpayers this has created Unfunded Future Liabilities of $79.0 Trillion.
USAPonzi is intentionally and dramatically undertaxing the current U.S. taxpayer on a GAAP basis by $5.5 Trillion in FY2015.
USAPonzi has been undertaxing the U.S. citizens and businesses for the last 46 years for now a total of $97.4 Trillion in Public Liabilities. This has the same effect as giving the U.S. citizens and businesses $97.4 Trillion but it is counterfeit money because the future U.S. taxpayer will never be able to pay these deferred Public Liabilities.
USAPonzi therefore makes the U.S. citizens and businesses, primarily the upper class, appear to be $97.4 Trillion richer.
USAPonzi makes the United States appear to be much more prosperous because the U.S. Government is giving out counterfeit money to the U.S. citizens and businesses each year with GAAP basis Deficit Spending, which is a GAAP Deficit of $5.5 Trillion in FY2015 (see The U.S. Government is "Juicing the Economy"). About 37% of our GDP in FY2015 is counterfeit, i.e. is caused by the Deficit Spending of USAPonzi (see U.S "Real" GDP FY2015 with $5.5T Deficit).
USAPonzi has, on average, given each U.S. citizen $17,134 of counterfeit money in FY2015 (GAAP Deficit of $5.5T/321m citizens = $17,134).
USAPonzi has, on average, given each U.S. citizen $303,427 of counterfeit money since FY1969 (US Unfunded Liabilities (GAAP) of $97.4T/321m citizens = $303,427). Unfortunately, almost all of this counterfeit money has been collected by the top 1% of the U.S. population because of the way the USAPonzi undertaxing works. This is what is causing the "Wealth Gap".
USAPonzi has given the United States of America the false appearance of economic, political, and military dominance over the rest of the Planet.
USAPonzi has given the current generation(s) (1969-present) of U.S. citizens an artificially high standard of living, that cannot be sustained, by accelerating the consumption rate for the U.S. consumer. The U.S. Government has been giving counterfeit money ($97.4 Trillion of GAAP basis Unfunded Liabilities) to essentially all U.S. citizens and businesses for the last 46 years by either overpaying them or undertaxing them.
USAPonzi has set the stage for what will have to be a much lower standard of living for the next generation(s) of U.S. citizens since we have been borrowing from the future to finance the current economic activity.
USAPonzi has set the stage for a devastating economic and social catastrophe that will occur when USAPonzi implodes.
USAPonzi has not funded the social benefit promises so many of the middle and lower class U.S. citizens are headed for the same social and economic turmoil, even financial devastation, that the people in Greece are now experiencing, that will occur when USAPonzi implodes. The U.S. Government has made social benefit, pension, and veterans' benefits promises of $79.0 Trillion and has not one penny to its name to pay these promises and in fact has National Debt of another $18.4 Trillion.
USAPonzi has dramatically undertaxed the U.S. upper class allowing them to live opulent even super opulent lifestyles and causing them to appear to be wealthy even super wealthy but with $97.4 Trillion of counterfeit money that will evaporate when USAPonzi implodes (see Creating Counterfeit Wealth and The Infinite Counterfeit Money Machine!). About 81% of our Private Net Worth is counterfeit money.
USAPonzi has dramatically overpaid the U.S. ruling class, the direct and indirect Government employees, and the Government related and supported businesses giving the ruling class an opulent lifestyle and making many of them wealthy but with counterfeit money that will evaporate when USAPonzi implodes.
The U.S. Government is corrupt and fraudulent by using an improper accounting system to make the United States appear to be much more wealthy, prosperous, and successful than it really is. The U.S. Government is lying to the U.S. Citizens by promising them that it will pay social benefits, pensions and veteran's benefits that it cannot afford and then making no attempt to fund the social benefit promises. The U.S. Government is cheating the common man and the underprivileged by dramatically undertaxing the upper class to make them super wealthy and by paying themselves and the direct and indirect employees of the Government much more than the taxpayer can afford rather than funding these social benefit promises.
The upper class has been willing and eager for the U.S. Government to continue to use this corrupt and fraudulent accounting system because they have benefited massively ($97.4 Trillion is a lot of money for them to share even though it is counterfeit money) by this Ponzi scheme. LBJ was the scoundrel that set up this scheme by introducing the "Unified Budget" in FY1969 but the ruling class (Scoundrels, Liars, and Cheaters!) liked it so much that they have agreed among themselves to let it continue for now more than 46 years.
The U.S. Government's Ponzi scheme (USAPonzi) is systematically creating counterfeit money out of "thin air" at the rate of our unreported, but real, GAAP basis Deficit Spending and stuffing it into the pockets of the upper class U.S. citizens and businesses.
The U.S. Government is systematically taking from the poor and giving to the rich and has been doing so for now more than 46 years.
By continuing with the current fiscal policy, the U.S. Government would, in theory, create infinite Public Liabilities (US Unfunded Liabilities (GAAP)) and infinite Private Assets (US Total Assets our private net worth). Both US Unfunded Liabilities (GAAP) and US Total Assets are posted on www.usdebtclock.org. This is why the stock market keeps setting new records! This is why we have such a "wealth gap"! This is why the rich are getting richer and the poor are getting poorer!
This is why the United States of America appears to be the most dominant economic, political, and military power the Planet has ever known!
And all because Lee Harvey Oswald assassinated JFK (See The Oswald Financial Bubble!).
The U.S. citizenry must demand that the U.S. Government adopt GAAP Accounting and commit to a balanced GAAP basis budget in order to establish an equitable and sustainable fiscal policy for the Government of the United States of America.
See The Distortions of USAPonzi for more information about this Ponzi scheme.
See The Implosion of USAPonzi for my prediction of what will happen when USAPonzi implodes.
Financial data presented in this Op-Ed was sourced from www.usdebtclock.org as of August 24, 2015.
John W White
Retired Information Technology Executive