The Biggest Ponzi Scheme on the Planet-The U.S. Government
"American Economic Exceptionalism Explained"                     USAPonzi                                      by John W. White   Mar 29, 2013

Deficit Spending, Money Supply, and Counterfeit Money
Aug 20, 2015
As posted on www.usaponzi.com


In this commentary I will explain how the Deficit Spending of the current Fiscal Policy of the U.S. Government is expanding the "Money Supply" with Counterfeit Money.


The Fiscal Policy of the U.S. Government has created a Ponzi economy for the United States of America by dramatically overspending, dramatically overcommitting to spend on social benefits, and dramatically undertaxing the U.S. citizens and businesses.


The Fiscal Policy of the U.S. Government 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 (US Unfunded Liabilities (GAAP) as reported on www.usdebtclock.org), while the Fiscal Policy itself encourages more and more people to not work and collect the social benefit promises from the U.S. Government which of course will cause a reduction in future tax revenues.  I would think that a reasonable person would understand that we have a basic flaw in this Fiscal Policy.  We do have a fundamental flaw in this Fiscal Policy, it is a Ponzi scheme.


The U.S. Government is overpaying the direct and indirect Government employees and the Government related businesses, is committing to pay social benefits to U.S. residents that greatly exceed the U.S. taxpayer's financial capability, is not funding these social benefit promises, and is intentionally and dramatically undertaxing the current U.S. taxpayer.  The U.S. Government is attempting to conceal this overspending, overcommitting, and undertaxing by using an improper accounting methodology by using Cash Accounting vs. the proper GAAP Accounting.  This Fiscal Policy is creating a massive and exponentially increasing amount of public liabilities (currently $97.4 Trillion of GAAP basis Unfunded Liabilities) for the future U.S. taxpayer that can never be paid.


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 U.S. Government has been operating USAPonzi for now more than 46 years.


See Op-Ed to the Wall Street Journal August 15, 2015 for more detail on this Fraud.


Deficit Spending, Money Supply, and Counterfeit Money


In this commentary I will further explain how this Corrupt and Fraudulent Fiscal Policy is introducing an infinite supply of counterfeit money into the U.S. and global economy.


First of all, deficit spending means spending money that you do not have and in the case of USAPonzi we are spending money we do not have and will never have.  Since FY1969, when USAPonzi was launched, the U.S. Government has "spent" $97.4 Trillion that we do not have and will never have and is "spending" $15.1 Billion more every day.  The U.S. Government tells us that they have created National Debt of $18.4 Trillion by their "Cash basis" deficit spending.  The U.S. Government does not openly expose to us the fact they have "spent" another $79.0
Trillion on a "GAAP basis" by committing to pay social benefit promises to U.S. residents but not funding these social benefit promises creating what we now refer to as Unfunded Future Liabilities.


This of course means that the U.S. Government is lying to the general population by promising to pay social benefits that the U.S. taxpayer cannot afford and is not paying in the tax revenue to "fund" these promises.  These are empty promises made by politicians so that they can get elected and so that they can overpay themselves and the people that work in and for the U.S. Government.


The Fiscal Policy of the U.S. Government is also making the upper class really wealthy because they do not have to pay the $97.4 Trillion in taxes that would be required to pay for the cost of running the U.S. Government and to "fund" these social benefit promises.


Deficit Spending means that we are counting on the future U.S. taxpayer to eventually pay this ever expanding tax bill that is now $97.4 Trillion and increasing $15.1 Billion every day.  This is a "pipe dream" and everybody in the U.S. Government knows or should know that it is a "pipe dream"!


Deficit Spending means that since the current U.S. taxpayer did not have to pay these taxes they now have $97.4 Trillion of money that just shows up in their pockets because of these unpaid taxes.  The good news is that we have just magically increased our "Money Supply" by $97.4 Trillion.  The bad news is that this is counterfeit money since the upper class U.S. citizens and businesses got this money because they did not have to pay these taxes but deferred them to the future U.S. taxpayer that can never pay them.


This is just how Ponzi schemes work, Ponzi schemes pay the promised returns to the early participants with new money that is coming in from future participants.


The U.S. Government is filled with scoundrels, liars and cheaters so that they can overpay themselves and can make their rich friends really rich while Cheating the Common Man!.


Deficit Spending creates a new supply of money but it is counterfeit money that will evaporate when the U.S. Government starts telling the truth about our Fiscal Policy or when USAPonzi implodes on an involuntary basis.  Every dollar deferred to the future U.S. taxpayer is a counterfeit dollar that is introduced into the U.S. and global economy and financial system.


The current Fiscal Policy of the U.S. Government (USAPonzi), if it allowed to continue, will create an infinite supply of dollars for U.S. citizens and businesses to spend but we have to recognize that this is counterfeit money that will evaporate when USAPonzi implodes.


This is why the U.S. upper class appears to be getting rich!  The U.S Government is giving them counterfeit money every day.


This is why U.S. businesses appear to be so profitable!   The U.S. Government is giving them counterfeit money every day.


This is why the stock market has been the best place to invest for the last 46 years.  This is how Warren Buffett got rich, the U.S. Government gives Warren Buffett about $10 Million of counterfeit money every day.   But I am not just picking on Warren Buffett, everybody that makes a lot of money gets to keep a lot of money because they do not have to pay the taxes to pay for the U.S. Government spending but yet the economy gets the benefit of the Deficit Spending by the U.S. Government.


As of today, August 20, 2015, 81.4% of our Private Net Worth is counterfeit money that was produced by the Deficit Spending of USAPonzi (see Creating Counterfeit Wealth for an explanation of how I make this determination).


This is what caused the Internet Bubble!  If we do not pay the input cost of running the U.S. Government but get the benefit of the output that it produces, a lot of businesses can appear to be highly profitable when with honest accounting by the U.S. Government they would be much less profitable or possibly not even exist.


This is what caused the Housing Bubble!   We have a lot more counterfeit money that USAPonzi is producing and it tends to chase the "valuable" assets.  The U.S. Government has produced $97.4 Trillion of counterfeit money and we need to spend it on something or invest it in something.  That is why we have so many expensive houses and apartments all over the world.  We are using counterfeit money to build and buy these houses and apartments.


USAPonzi is creating a massive financial bubble (see The Oswald Financial Bubble!) of counterfeit money that will evaporate when USAPonzi implodes.


See The Distortions of USAPonzi for more information on the impact of USAPonzi on the U.S. and global economy.


See The Implosion of USAPonzi for what I predict will happen when USAPonzi implodes.


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.


Financial data presented in this commentary was sourced from www.usdebtclock.org as of August 20, 2015.


John W White
Retired Information Technology Executive
Plano, TX