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

The Federal Reserve IS NOT the Problem!
Aug 2013


The Federal Reserve Bank is not the cause of the financial situation in which we find ourselves.  The media pundits repeatedly point to the Federal Reserve QE action as causing uneasiness in the financial markets, possibly even creating an asset bubble in the equity market even as we see some less favorable economic data beginning to emerge.  It is my judgment that the Fed is taking monetary actions to hopefully stimulate the economy and reduce unemployment but these actions are primarily being taken just to mitigate the real problem.


The Federal Government IS the Problem!


I contend that the Federal Reserve actions to keep the Fed Funds rate low and to continue to buy assets at a rate of $85 Billion per month (QE) is actually a reaction to the real problem which is caused by the Federal Government's fiscal policy.   The Federal Government is overcommitting, overspending, undertaxing, lying, and bankrupt.   As a result of this policy the Federal Government is operating "The Biggest Ponzi Scheme on the Planet" (
USAPonzi ) and that is the cause of our current fiscal dilemma.  


Most people realize that the Federal Government is spending more than it's income, is having to borrow to cover the cash deficit, and as a result is having to continually raise the debt limit.


Most people do not realize that the Federal Government is not collecting enough tax revenue to pay for our social benefit commitments.


Most people do not realize that the Federal Government is spending what social benefit tax revenues they do collect that are in excess of our current year social benefit outlays on our general operating expenses.


Most people do not realize that the Federal Government is reporting our annual deficit using Cash-based accounting when it should be using GAAP-basis accounting.  


As a result the Federal Government is telling U.S. citizens and the world that we have a budget deficit of about $700 Billion when our GAAP-basis Deficit is on the order of $5-6 Trillion and is telling U.S. citizens and the world that we have a Federal Debt of $17 Trillion when our Federal Obligation (Federal Debt plus present value of Federal Unfunded Liabilities) is really on the order of $75-85 Trillion.


Yes the Federal Government has real (GAAP-basis) deficit spending on the order of $5-6 Trillion per year
!


A frequently discussed topic in the media these days is when will the Fed "take away the punchbowl" of $85 Trillion per month of Quantitative Easing.   I contend that there is no chance of the Fed "taking away it's QE punchbowl" UNTIL the Federal Government begins to "take away it's punchbarrel" of $5-6 Trillion per year of GAAP-basis Deficit spending.


The real question is:
 


Why is the Federal Government not reporting our Federal Government fiscal status using GAAP-basis accounting?


I contend that the Fed will not be able to "taper the QE" until the Federal Government takes significant action to balance our GAAP-basis budget but rather will have to significantly expand the rate at which they print money to compensate for what will be an every increasing Cash-based deficit that will be incurred due to the massive GAAP-basis Deficit spending.  


According to Shadowstats.com, we have incurred a total of $85 Trillion of GAAP-basis Deficit spending since 1969!!!


As a result of this fiscal policy by the Federal Government, they have been operating a Ponzi scheme (USAPonzi) since 1969.


I have created a website (
www.usaponzi.com) that presents a detailed analysis of this Ponzi scheme (USAPonzi) and an assessment of what will likely happen when USAPonzi implodes.


Next page:
Cooking the Books!