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

"The Haves" vs. "The Havenots"!
Jan 27, 2105
As posted on www.usaponzi.com


In 1935, the U.S. Government put in place a compassionate policy that it would pay social benefits to the poor, the elderly, the disabled, and the underprivileged that included 7 defined groups of citizens that would receive these social benefits.  This policy has been expanded over the years to include many more benefiting groups of U.S. citizens (and now U.S. residents) which some say now pays federal benefits to nearly half of the U.S. population.  Some of these are lifetime benefits such as Social Security and Medicare.  The working and prosperous U.S. citizens ("The Haves") pay taxes to finance these social benefit programs through what were intended to be trust funds for these programs that were established to help the less fortunate, "The Havenots".


In FY1969, LBJ proposed a "Unified Budget" that consolidated all of these social benefit programs into the general operating budget of the U.S. Government which used Cash Accounting.  This established a fiscal policy that did not prefund these benefit progams, i.e. did not fund the social benefit trust funds, for new participants as they were added to be the benefit rolls as would be required by proper GAAP Accounting (Generally Accepted Accounting Principles).  This had the effect of switching the primary benefit of these social benefit programs from "The Havenots" to "The Haves".  "The Havenots" no longer have any money (not one penny) in the trust funds to give assurance that these social benefits can be paid and "The Haves" get to keep the "should be taxed" money making them very rich since these Unfunded Liabilities are now estimated to be $82.1 Trillion as of this writing. 


"The Havenots" are spending their social benefit money now like it will last forever even though it cannot because the U.S. Government is not funding these promises.  The people that are still working but expecting future social benefits are spending their current income with the expectation that they will have social security and medicare in their retirement years but these social benefits cannot be paid because the U.S. Government is not funding these promises.  The people that are still working or earning from investments are also able to spend some of their "should be taxed" money and can invest the remainder in the Ponzi economy of the USA (USAPonzi).  These actions all contribute to an apparent stronger economy than an equitable and sustainable fiscal policy would dictate.  I estimate that the GAAP basis Deficit Spending that results from this corrupt and fraudulent fiscal policy nearly doubles our economic activity (see "Real" U.S. GDP FY2015).


Corrupt and Fraudulent Accounting is not our only Problem!


But using a corrupt and fraudulent accounting system is not our only problem.  The U.S. Government has also been consistently spending more money than we have Cash receipts thereby incurring federal debt of now $18.1 Trillion.  This also shows up as a benefit to the private U.S. citizens and businesses since they did not have to pay these taxes either.  So the private U.S. citizens and businesses (primarily the UPPER CLASS) appear to be richer by $100.2 Trillion (debt of $18.1 Trillion and Unfunded Liabilities of $82.1 Trillion) than they would be with proper GAAP Accounting and a balanced GAAP basis budget.  This $100.2 Trillion is now to be paid by the future U.S. taxpayer that has no possiblity of ever paying it since it is increasing exponentially ($17.8 Billion a day in FY2015) and the U.S. Government is already spending more on a Cash basis than the U.S. taxpayer is paying in taxes.


By spending and promising to spend more than the U.S. taxpayer pays, the U.S. Government is cheating the middle and lower classes ("The Havenots") and is making the UPPER CLASS ("The Haves") appear to be 10X richer than a fair and equitable fiscal policy would dictate.  The UPPER CLASS is sometimes thought of as the 1%ers but it extends much further than just the top 1% of earners since anybody that works for the U.S. Government either directly or indirectly (defense and healthcare workers being the most obvious) is also a major benificiary of this corrupt and fraudulent fiscal policy.


$100 Trillion of Counterfeit money


While the current fiscal policy is making "The Haves" super rich and cheating the "The Havenots", it is in fact all an illusion since the $100 Trillion of unpaid taxes is now floating around in the global economy as counterfeit money since it is backed only by the future U.S. taxpayer and he/she will never be able to pay it.  In fact the future U.S. taxpayer contributions are actually diminishing since more and more people are retiring or choosing to stop working, thereby shrinking the work force, because the Government promises to pay them enough that it appears to them that they do not need to work.


But as proper accounting clearly shows, the U.S. Government is lying to the people by telling them that it can make these social benefit payments when these benefits when added to our other government spending are clearly unaffordable.  A major reason that our tax revenues are even as high as they are today is because the super prosperous U.S. citizens and businesses are (sometimes) paying taxes on capital gains, profits, and dividends artificially created by USAPonzi, the Ponzi Economy of the United States of America;

 "The Biggest Ponzi Scheme on the Planet".

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.


This equitable and sustainable fiscal policy (GAAP basis and balanced) will dramatically reduce the social benefit promises to "The Havenots" but will assure that the promises made can be promises kept.  It will also cause "The Haves" to be less wealthy than they appear to be now by nominally a factor of ten.

See www.usaponzi.com for more information about this Ponzi scheme.