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

Fools and Foxes
Jan 21, 2015

As posted on

Since Fiscal Year 1969, the U.S. Government has been operating "The Biggest Ponzi Scheme on the Planet" (USAPonzi) by promising to pay social benefits that are unaffordable and not funding these promises thereby undertaxing the UPPER CLASS and since they don't have to pay for these promises making them super wealthy and leaving the common man and the underprivileged to face financial devastation since by not funding these social benefit promises they cannot possibly be paid.  The U.S. Government has also been dramatically overspending its "cash receipts" thereby overpaying itself and its direct and indirect employees.

The U.S. Government is attempting to conceal the magnitude of its overpromising and overspending by using Cash Accounting, which only comprehends current year receipts and expenditures, when it should be using GAAP Accounting that also comprehends the financial impact of the future year spending commitments.  By not funding the future year social benefit promises the U.S. Government has created $82 Trillion of Unfunded Liabilities.  By overspending its "cash receipts" the U.S. Government has created $18 Trillion of Debt.  This has created a GAAP Obligation (Debt plus Unfunded Liabilities) of $100 Trillion.

The U.S. citizens and businesses (primarily the UPPER CLASS) appear to be $100 Trillion richer because they did not have to pay this $100 Trillion of taxes.  The common man and the underprivileged get left holding an empty bag since the UPPER CLASS did not pay enough taxes to meet the promises of the U.S. Government.  The social benefit trust fund should have $87 Trillion in it ($82 Trillion of Unfunded Liabilities and $5 Trillion that the U.S. Government has borrowed and spent) if the U.S. Government was going to meet the current social benefit promises.

The current fiscal policy of the U.S. Government is taking care of the people within the Government (both direct and indirect employees) by spending more than the taxpayer can afford, is taking care of  the UPPER CLASS by making them appear to be $100 Trillion richer than they would be with honest accounting by undertaxing them, and is cheating the common man and the underprivileged by $87 Trillion by not funding the social benefit promises that the U.S. Government has made.

This fiscal policy is a Ponzi scheme (USAPonzi) since the U.S. Government is obviously promising to pay returns (social benefits) that it cannot possibly pay creating a balloon tax bill (our GAAP Obligation) for the future taxpayer of now $100 Trillion (over and above current year spending) that is increasing by $17.8 Billion every day (FY2015 GAAP Deficit of $6.5T/365=$17.8B).

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 46 years.


Fools and Foxes


Whenever I turn on CNBC, I try to determine whether each speaker is a "Fool" or a "Fox".  The Fools are those that are fooled by the U.S. Government's Ponzi scheme (USAPonzi), have no clue about what is going on with the U.S. Government fiscal policy, and are blindly talking their own book oblivious to the impending financial crisis that will occur when USAPonzi implodes.  The Foxes are those that clearly understand what is going on with the U.S. Government's corrupt and fraudulent fiscal policy and are "sly like a fox" calculating how long they should stay invested in this Ponzi scheme before they attempt to exit and try to preserve some of the $100 Trillion of counterfeit money that has been introduced into the global economy by the illusion of prosperity that USAPonzi creates.


And then we hear from the college professors that come on CNBC periodically that say the stock market is going to 17,000 and the next time they come on it is going to 18,000 and the next time they come on it is going to 20,000 etc. etc.  Yes they are right but frankly I don't think they know why they are right.  Ponzi schemes go up until they don't go up any more.  Then they crash.

And then we hear the constant drivel about when will the Fed begin to raise interest rates.  What month will it happen?  How large will the first rate increase be?  The answer is that the Fed cannot rationally raise interest rates until the U.S. Government starts using an honest accounting system.  We are on a path that will create an infinite amount of debt and the only interest rate that is workable in that scenario is zero or negative.

And then we hear from the Fed governors that say that they do not see any asset bubbles forming and that they understand how to accurately manage monetary policy with actions that are "data dependent".  These are the folks that did not see the internet bubble inflating.  These are the folks that did not see the housing bubble inflating.  These are the folks that still claim that they do not see the granddaddy of all bubbles inflating, the asset price bubble created by USAPonzi.  By my calculation, the financial assets of the UPPER CLASS are already artificially inflated by 10X because of the $100 Trillion of undertaxing.  The Fed governors either do not see what is happening or they are willing to "carry the water" for the folks in the U.S. Government that are running this Ponzi scheme.  

And then we hear from the business leaders that say every looks great and that they will beat their projections.  Things look really good for next quarter and next year.   Well things should look very good for most businesses because the U.S. Government is giving them a head start every year by creating counterfeit money with GAAP basis Deficit Spending ($6.5 Trillion in FY2015) that they can drop to their bottom line as apparent profit or to pay themselves and their employees.  I just wonder what the contingency plan is for these businesses when this "honey hole" in Washington DC dries up.  You talk about leverage; when you are being dramatically undertaxed to make you artificially profitable with counterfeit money and then you are borrowing more counterfeit money to buy back your own stock to raise the stock price so you can sell your personal holdings, that is leverage.

And then we hear from the bankers that they are making huge profits from their trading desks, from their investment banking operations, from their fixed income operations etc. etc.   When banks are making money by trading in the Ponzi economy and on the commissions and transaction fees created by an exponentially increasing base of counterfeit capital (now $100 Trillion) they should be making money hand over fist.  My concern is that most of the deposits in our real banking system are ultimately backed by the expectation that the future taxpayer is going to make good on the $100 Trillion GAAP Obligation that the U.S. Government has created and we all know that this cannot happen.  This will likely lead to the failure of many banks.

And then we hear from the hedge fund managers, financial advisers, and financial engineers.  These are the folks that in my judgment have the best deal in town.  They are, in the most lucrative models, making "two and twenty" on an exponentially increasing amount of counterfeit money.  In these  lucrative models, they get paid 2% of their managed assets each year and 20% of the profit they can return to their investors.  When they are operating with a $100 Trillion Ponzi scheme as a tail wind they can become very, very wealthy and many of them have done so.   Warren Buffett is the poster child for this crowd having appeared to have made $63.3 Billion but $57 Billion of that is counterfeit money given to him by the U.S. Government by using corrupt and fraudulent accounting.  Warren Buffett appears to be making $10,153,320 every day because of this massive Ponzi scheme.  (see Buffett makes $10M a day on U.S. Government Corruption).

And then we hear from the U.S. senators and congresspersons.  They all say that we must reduce the deficit, do something about the debt, and do something to assure that the social benefits are sustainable in the long run.  They say these things but that they have no interest, motivation, or intention of doing anything that would negatively impact the "gravy train" that they enjoy by being part of the ruling class.  These folks are easier to figure out.  Some of them are fools but for the most part they are foxes that want to extend USAPonzi as long as they can.  They are dramatically overpaying themselves and enjoying significant perks as a side benefit from the $17.8 Billion of counterfeit money that U.S. Government creates every day.

And then we hear from the group of people that know that something is not quite right but can't figure out what it is but since everything seems to be going so well in the USA it must be that the rest of the world just cannot compete with "American Exceptionalism".  They are the ones that say the only place to invest right now is in the U.S. and the only place to put your money is in the stock market and investing in U.S. stocks.  These are the ones that typically say that any pull back is a buying opportunity.  These are the ones that would be favored clients of Bernie Madoff since they are prepared to invest in a Ponzi scheme.  The only reason that the U.S. economy looks so much better than the rest of the world is because we have "the best and biggest ($100 Trillion) Ponzi Scheme" of the many national Ponzi schemes that are operating on the planet today.


These differing views presented by the differing perspectives of the various speakers makes it very difficult to tell whether these talking heads are fools or foxes?


The current corrupt and fraudulent fiscal policy is appearing to make the UPPER CLASS very rich, is overpaying government employees, and is cheating the common man and the underprivileged by not funding the social benefit promises.  By continuing with the current fiscal policy, the U.S. Government would, in theory, create infinite public liabilities (GAAP Obligation) and infinite private assets (private net worth).  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!

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 for more information about this Ponzi scheme.