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

The Ponzi Economy
May 25, 2014

Dr. Kaushik Basu, Cornell University Economics Professor and Senior Vice President and Chief Economist for the World Bank, penned a very informative article entitled "The Ponzi Economy" in the June 2014 publication of the Scientific American.  This article explains how Ponzi schemes can take various forms and as a result are often difficult to detect and can emerge from what are perfectly legitimate business practices.  Likewise what might initially appear to have characteristics of a Ponzi scheme can turn out to be a viable business model.

It is my contention that the U.S. Government is operating a massive Ponzi scheme (USAPonzi) and as a result the U.S. and global economy is operating as a Ponzi Economy.  As a result U.S. (and global) businesses are surfing on USAPonzi and are by induction "Ponzi businesses" since they are benefitting from the massive artificial economic stimulus of USAPonzi.   When USAPonzi implodes, I predict that the U.S. and global economic activity will contract by one third to one half or even more.

I would encourage my readers to read this article by Dr. Basu for a better understanding of how Ponzi schemes can operate.

"The Ponzi Economy"
by Dr Kaushik Basu  Chief Economist at the World Bank

 

Since Dr. Basu is a renowned expert in Ponzi Schemes, I sent him the following email as an introduction to my USAPonzi thesis and received the associated response from him.

 

5/24/14

To: John White
From:  Kaushik Basu (kb40@cornell.edu) This sender is in your contact list.
Sent: Sat 5/24/14 2:42 PM
To: John White (jwwhite38@outlook.com)
John,
That's very interesting. I will later check out your letters. Thanks.
Kaushik

Sent from my iPad

On May 24, 2014, at 11:16, "John White" <jwwhite38@outlook.com> wrote:

I read your article "The Ponzi Economy" in the Scientific American with great interest and I feel that it does a fine job of explaining how Ponzi schemes operate and how they are sometimes difficult to detect.   It is also often difficult to convince the victims that they are in fact victims of such schemes.
 
While I agree with you that the Madoff scheme was a huge Ponzi scheme it is in my mind dwarfed by what I call USAPonzi "The Biggest Ponzi Scheme on the Planet".   The U.S. Government, by not taxing the U.S. citizenry sufficiently to finance their future social benefit commitments, has created a Ponzi liability that is by my calculation now on the order of $95 Trillion or over one thousand times larger than the Madoff Ponzi or the Enron Fraud.   I also calculate that this scheme is currently dropping $6.4 Trillion a year ($535B a month and $17.6B a day) of phantom money into the U.S. and global economy.
 
As a result every business in the U.S. (and to some extent every business in the world) is surfing on USAPonzi and as a result essentially every business is a Ponzi scheme by induction. 
 
This scheme has caused asset price inflation of about 5% per year since FY1969 when USAPonzi was launched by LBJ with the Unified Budget and the continued use of Cash Accounting.   This asset price inflation now makes the rich people feel that they are about 7 times as wealthy as they really would be if the Government was properly funding these future liabilities.
 
I have created a website that analyzes this Ponzi Scheme (www.usaponzi.com) and predicts what will happen when USAPonzi implodes.
 
As you will see I have submitted several letters to the Securities and Exchange Commission as a "Whistlerblower" noting this use of a corrupt and fraudulent accounting methodology by the U.S. Government.
 
I would encourage you to read my fifth letter (April 14, 2014) to the SEC as I feel that it best explains in a relatively short document why this Ponzi scheme should be exposed and corrected.

Again thanks for publishing this fine article on "The Ponzi Economy".

John W White