An Absurd Situation
By operating a Ponzi economy for now nearly half a century we find ourselves in an absurd situation.
We like to think of America as the shining example of liberty, freedom, constitutional conviction, and economic success but now we must face the fact that we, as a country, have been living a lie since 1968.
One reason the situation is absurd is because the Government is arguing over how to resolve the Cash-based Deficit of $700 Billion and the Federal debt of $17 Trillion when they should be focused on the GAAP-basis Deficit of $5-6 Trillion and the Federal Obligation of $75-85 Trillion.
We are in a stalemate in congress trying to resolve the Cash-based deficit and debt while essentially ignoring the real problem which is five times more serious.
The U.S. Federal Government is overcommitting by making entitlement promises that cannot be kept, is overspending because we want to and do spend more than we can afford, is undertaxing because we would kill the economy if we taxed enough to pay our bills, is lying so that our budget imbalance won't look as bad as it really is, and as a result we are bankrupt but do not want to admit it.
The Budget Impasse
The Federal Government has essentially abdicated its fiscal responsibility by not preparing a budget for now more than 5 years and for the last 45 years (since 1968) has been using fraudulent accounting techniques to mislead the U.S. citizenry and the world. If the Government were to prepare an accurate budget and financial statement it would clearly expose the fraud that they have been perpetrating for nearly half a century.
The impasse over the debt limit and the continuing resolution is quite understandable since the Federal Government is bankrupt and we have no rational way out of the problem that has been created by USAPonzi. The Democrats say that they will not cut one penny out of our entitlement benefits and in fact congress has continued to pass legislation that increases our spending on entitlements with the Medicare Prescription Drug Act and the Affordable Care Act. I find this Democrat position ridiculous since our current entitlement commitments are clearly unsustainable. The Republicans say that they will not approve a penny more in taxes and in fact they are pushing for tax cuts that they claim will stimulate the economy. I find this Republican position ridiculous since the USAPonzi scheme has provided $85 Trillion of stimulus over the last 45 years and is continuing to provide $5-6 Trillion of stimulus each year with our GAAP-basis Deficit spending. And both the Democrats and the Republicans say we cannot take action to close our fiscal gap right now as it would cripple the economy. And they are right, if we were to stop the massive GAAP-basis Deficit spending our economy would contract dramatically. But then, that is the nature of a Ponzi scheme; there is no graceful exit. Once you start down the slippery slope of a Ponzi scheme it is difficult to step back. As soon as the Government fesses up (or the financial market does it for them) to the fact that they are misleading the U.S citizenry (and the world), USAPonzi will implode and we will experience a catastrophe of epic proportions.
The fact is; we are living in a Ponzi economy and we must face the music. We are clearly bankrupt (see Detroit-A lesson in Bankruptcy) but have just not been able to come to grips with the gravity of the situation.
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