Open Letter to U.S. Citizens
May 11, 2015
Updated July 9, 2015 to correct Debt double count. After further research of the usdebtclock GAAP Unfunded Liabilities, I have determined that this number includes the National Debt. In my prior commentaries I had separated money spent (debt) from money promised to be spent (unfunded liabilities). I will maintain that terminology on this website but recognize that the usdebtclock Unfunded Liabilities = Debt + Unfunded Future Liabilities.
As Posted on www.usaponzi.com
The U.S. Government is operating a massive ($102.4 Trillion) Ponzi scheme (USAPonzi), by spending more than the U.S. taxpayer is paying in taxes, by committing to spend more for social benefits than the U.S. taxpayer can afford, and by deferring $102.4 Trillion of financial liabilities to the future U.S. taxpayer. The U.S. Government has overspent, creating $18.2 Trillion of Debt, and has overcommitted, creating $84.2 Trillion of Unfunded Liabilities, thereby producing this $102.4 Trillion of deferred Public Liabilities. The U.S. Government is also using a corrupt and fraudulent accounting system in an attempt to conceal this overcommitting by using Cash Accounting rather than the proper GAAP Accounting. On a GAAP basis the U.S. Government is inccuring a deficit of $6.5 Trillion in FY2015 which means that the Public Liabilities for the future U.S. taxpayer are continuing to increase by $17.8 Billion every day.
This means that the people that are expecting to get social benefits cannot be paid without the U.S. Government borrowing an ever increasing amount of money and of course the U.S. Government cannot borrow an unlimited amount of money. Therefore the people that are expecting to get paid social benefits cannot continue to be paid at the currently promised levels.
Because the upper class U.S. Citizens and business did not have to pay for either the overspending ($18.2 Trillion) or the overcommitting ($84.2 Trillion) they have appeared to have gotten richer by $102.4 Trillion while the future U.S. taxpayer now owes $102.4 Trillion which he can never pay. This is what makes our fiscal policy (USAPonzi) a Ponzi scheme. Our current fiscal policy, if continued, will create an infinite amount of Public Liabilities and an infinite amount of apparent Private Net Worth.
The U.S. Government is using a simple little accounting trick, Cash Accounting vs. GAAP Accounting, in an attempt to conceal this Ponzi scheme. The U.S. Government is just making it look like the upper class citizens and businesses are getting rich by deferring financial liabilities to the future U.S. taxpayer that is incapable of paying these Public Liabilities. Most (80+%) of the apparent Private Net Worth of the U.S. citizens and businesses is counterfeit money created by undertaxing the U.S. citizens on a GAAP basis.
The upper class U.S. citizens and businesses appear to be getting rich, the people that are in the U.S. Government or work for the U.S. Government are getting overpaid, and the people that are expecting to get paid social benefits are getting lied to and cheated because the U.S. Government is making social benefit commitments but is not collecting the tax revenue required to fund these commitments.
The U.S. Government has misappropriated $102.4 Trillion to appear to make Americans much richer and more prosperous than we really are. This overspending, overcommitting and undertaxing has caused a dramatically accelerated consumption rate for the U.S. consumer which has allowed us to live dramatically beyond our means and has caused our GDP to be nearly twice what it would be with honest accounting and a balanced budget (see U.S. "Real GDP" FY2015).
The ever expanding Public Liabilities that USAPonzi is producing can only lead to a technical bankruptcy of the U.S. Government (See Dealing with National Bankruptcy).
This situation can only be resolved by the U.S. Government adopting GAAP Accounting and committing to a balanced GAAP basis budget. This will ensure an equitable and sustainable Fiscal Policy.
Author's Note: It should also be noted that www.usdebtclock.org reports our total GAAP basis Unfunded Liabilities at $96.2 Trillion ( which includes Debt) as of May 11, 2015 which is somewhat lower than the USAPonzi estimate of $102.4 Trillion.