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

USAPonzi is Tilting the Playing Field
Sep 2, 2014
By John W. White
As posted on

USAPonzi has enabled the U.S. Government to implement a "Tilted Playing Field" for the global economy and the global financial system.  Lyndon Baines Johnson may or may not have known exactly what he was doing by setting up the "Unified Budget" for FY1969 but it has proven to be a massive, but illusionary, asset to the U.S. Government and especially to the "ruling class" and the wealthy (the 1%ers) in America.  This simple little accounting trick of continuing to use Cash Accounting for the U.S. Budget after adopting the "Unified Budget" has allowed the U.S. Government to covertly print $97.5 Trillion of phantom money over the last 46 years.  The media pundits think that it is a big deal that The Federal Reserve Bank has printed $3.5 Trillion since 2008, and that is a lot of money, but the Fed is a piker compared to the U.S. Government which is now printing $535 Billion a month ($6.4 Trillion in FY2014) of phantom money as a result of their GAAP basis deficit spending.

The money printed by the Federal Reserve is funny money that helps cover up for the overspending that the U.S. Government has already done, while the money that the U.S. Government is printing is phantom money that is backed only the expectation that future taxpayer will eventually come up with the money to pay our debt owed to the public ($12.7 Trillion) and to pay the social benefits commitments ($84.8 Trillion) that the U.S. Government has made.  And this public liability, our GAAP Obligation of now $97.5 Trillion, is growing daily, growing dramatically, and growing exponentially.

Lyndon B. Johnson was a shrewd politician that in all likelihood had a good idea of what he was doing when he established the "Unified Budget" in FY1969.  He was setting up an accounting system that would allow the U.S. Government to systematically release U.S. Dollars into the U.S. and global economy in the form of "unpaid taxes" that as it turned out, over the last 46 years, to be a rate of nominally 5% of our U.S. Total Assets every year.  The U.S. Dollar had already been established as the "reserve currency" for the global economy, so people outside the United States had to earn their money in their currency and then effectively convert it to U.S. Dollars when they executed a global trade transaction.  Meanwhile the U.S. citizens and businesses were getting nominally 5% more dollars stuffed into their pockets, every year, in the form of "unpaid taxes", by the U.S. Government and they did not have to do a thing except keep quiet about this corrupt and fraudulent accounting.

While this corrupt and fraudulent accounting system has dramatically "tilted the playing field" in favor of the United States of America, it has also "tilted the playing field" in favor of the "ruling class" and the wealthy within The United States of America.  Since this money is being systematically released as "unpaid taxes", it is the people that pay most of the taxes that get most of the tax relief and therefore most of the benefit, i.e. the wealthiest people get most of the benefit.  The "ruling class" also gets a benefit by running the Government's financial system that is now "spending" three times as much as the Government is collecting each year in taxes.  The "ruling class'" can then direct this dramatic overspending toward projects, programs, jobs, salaries, pensions, benefits, etc. that "polish their apple".

So right now things look quite promising for the "ruling class" and the wealthy (the 1%ers) but this is phantom money that will largely evaporate when USAPonzi implodes.  The 1%ers will not look nearly as wealthy and prosperous when USAPonzi implodes but the elderly and the underprivileged will be devastated!!!  Many of the elderly are highly dependent on social benefits from the U.S. Government for Social Security and healthcare and many of the underprivileged do not now have jobs and are totally dependent on social benefits from the U.S. Government.  But the U.S. Government has been lying for years by promising to pay these social benefits but has not budgeted even one penny in the last 46 years to pay for these future social benefits.  They are concealing this with corrupt and fraudulent accounting and pretending that they only have a $0.5-1.4 Trillion Cash basis budget deficit per year over the last 6 years when it was really a $4.3-6.6 Trillion GAAP basis budget deficit per year over that time period.  The U.S. Government is making social benefit promises that it has no intention or financial capability to keep.

As I have said repeatedly on this website; the phantom money that is being created every year ($6.4 Trillion in FY2014 and a total of $97.5 Trillion since FY1969) by USAPonzi will buy a lot of stuff, buy a lot of favor, and has made a lot of people (largely the 1%ers) appear to be very, very rich.

I have felt, for many years, that the U.S. Government was not running a proper financial system and it just did not feel right.  It was not until I started to dig into the details that I realized just how corrupt and fraudulent our fiscal and financial system really is.  We are now so deeply invested in this corrupt and fraudulent system that it will not likely be possible to exit from this Ponzi scheme without dramatic trauma for the U.S. and global economy and the U.S. and global financial system.  Some grownups some place on the planet will have to design a process for extricating ourselves from what is a very distorted and biased fiscal and monetary system.  I just hope that somewhere on the planet some cool and wise heads are working on a plan to minimize the trauma that will inevitably occur when USAPonzi implodes.  If this plan is developed and implemented without direct involvement by the United States it could be even more disruptive and catastrophic for the United States than what I predict in The Anatomy of USAPonzi.

It is very difficult to change the way things work when the people that set the rules are gaining such a massive personal financial advantage because of the way things are currently working.  USAPonzi has been a bonanza for the politicians and the direct and indirect government workers as well as for the wealthy.  All gamblers that go to the casinos should know that in the long run the house will win because the rules are set by the house in a way to ensure that the house wins.  In the case of USAPonzi, the U.S. Government is the house and they are setting the rules.  The rules right now are clearly set to favor the "ruling class" and the wealthy in the United States of America and not enough people in that group are prepared to establish a level playing field for the rest of the world and for the 99%ers within the United States.  LBJ tilted the playing field and the winning team (the "ruling class" and the 1%ers) likes it so much that they are prepared to keep it tilted.

For the rest of the world, the last 46 years have been like playing poker against an opponent that periodically get 5% more chips slipped onto his stack from "under the table"  The "under the table" chips are counterfeit, but for now they appear to be real money.

As of May 9, 2014, Warren Buffett had $65.2 Billion in his personal stack and $55.9 Billion of it came from the chips that were passed "under the table" by the U.S. Government (see The Buffett Investing Genius Magnified).  Warren Buffett is a really, really good "economic poker" player, maybe the best ever at his kind of poker, but a little assist periodically from your friends in Washington can still help your game.

But what price did Washington pay to make Warren Buffett rich?  Now the 150 million or so people that are expecting to get social benefit payments have ZERO dollars in their trust funds that should have $84.8 Trillion in them to finance these current social benefit commitments.  That is why I say that the elderly and the underprivileged will be devastated when USAPonzi implodes.  And remember the U.S. Government also still owes $12.7 Trillion to the public investors in U.S. Treasury Bonds.

So that is why I say that because of USAPonzi the Rich get Richer and the Poor get Poorer!!!

So that is why I say that USAPonzi has "Tilted the Playing Field"!!!

Every day that USAPonzi continues, the current U.S. citizens and the U.S. businesses get gifted another $17.6 Billion, the elderly and the underprivileged get NOTHING added to their social benefit trust funds, and the future taxpayers owe another $17.6 Billion!!!.  That is why the stock market is continuing to set new records quite frequently.  With current U.S. Government fiscal policy, the Stock Market Averages will go to the moon (see Assets Prices to Infinity).

Until USAPonzi implodes, and then I predict that the financial markets will crash like we have never seen before!  It is different this time...... 

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