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

Wealth Gap-A Byproduct of USAPonzi
Dec 18, 2014
As posted on www.usaponzi.com


In recent years there has been a common observation that there is a widening "wealth gap" between middle-income and upper-income households in the United States.  This article in the Dec 17, 2014 LA Times describes this wealth gap.  I contend that this "wealth gap" is caused by the U.S. Government's fiscal policy and the resulting Ponzi scheme.  As this website has repeatedly stated, the U.S. Government is using corrupt and fraudulent accounting by using Cash Accounting rather than the appropriate GAAP Accounting.


By using Cash Accounting, the U.S. Government has undertaxed the U.S. citizens and U.S. businesses by $99.3 Trillion over the last 46 years.  This undertaxing has caused the U.S. citizens and U.S. businesses to appear to be $99.3 Trillion more wealthy than they would be with proper accounting.  The most prosperous citizens and businesses gain the most benefit of this undertaxing and as a result they appear to be 8X richer than they would be with proper GAAP Accounting. (see Why the Stock Market is Overvalued!)


The following table demonstrates the degree to which the U.S. Government is undertaxing the U.S. citizens and U.S. businesses (see USAPonzi Fiscal Model).


                                                   Cash Accounting       GAAP Accounting

Deficit FY2015                                  $0.5 Trillion               $6.5 Trillion
Debt/Obligation Dec 1, 2014         
$18.0 Trillion             $99.3 Trillion


The U.S. Government has undertaxed the U.S. citizens and U.S. businesses by $18.0 Trillion on a Cash basis but by $99.3 Trillion on a GAAP basis over the last 46 years.


As of Dec 1, 2014, the value of U.S. Total Assets (the private net worth of all U.S. Households, Corporations, and Small Businesses) was $113.4 Trillion as reported by the Federal Reserve Bank.   If the U.S. Government was operating with proper GAAP Accounting and a balanced GAAP basis Budget, the "Real" Net Worth of all U.S. Households, Corporations and Small Businesses would be $14.1 Trillion.   By undertaxing the U.S. citizens and businesses the U.S. Government is stuffing counterfeit money into their pockets at the rate of our GAAP basis Deficit Spending. 


Perceived Net Worth  $113.4 Trillion (source www.usdebtclock.org)
          - Federal Debt    $18.0 Trillion
- Unfunded Liabilities    $81.3 Trillion
   = "Real" Net Worth    $14.1 Trillion
 


Ratio of Perceived Net Worth to "Real" Net Worth = $113.4T/$14.1T = 8.04  which means that the "real" private net worth is only about 12.5 cents on the perceived dollar. 


Bottom line is that the U.S. Government is making U.S. citizens and businesses appear to be 8 times as rich as they really are by undertaxing the U.S. citizens and U.S. businesses by $99.3 Trillion due to our GAAP basis Deficit Spending over the last 46 years.


As my Open Letter to U.S. Citizens Dec 15, 2014 states:


By using a corrupt and fraudulent accounting system and by overspending its cash budget, the U.S. Government is


making the rich appear 8 times richer than they really are,
overpaying the direct and indirect government employees,
and cheating the underprivileged by not funding the social benefit promises.


By using a corrupt and fraudulent accounting system, the U.S. Government is dramatically favoring the wealthy while dramatically cheating the underprivileged by not funding the social benefit trust fund.


And in doing so is causing the "wealth gap" to widen between the upper income households and the middle and lower income households.


It should not be a mystery why this "wealth gap" is widening!


This "Wealth Gap" will widen further in FY2015


The U.S. Government just approved a fiscal budget for FY2015 that will continue this use of corrupt and fraudulent accounting.  While this plan is purported to lower our deficit from $483 Billion in FY2014 to $469 Billion in FY2015, this does not tell the true story.  This deficit is the net "cash deficit".  With current fiscal policy the U.S. Government is not funding the social benefit trust fund and in fact is spending all of the social benefit tax revenue each year by borrowing and spending the "new" trust fund money as soon as it arrives.  This means that our cash debt increases by nominally twice what the government is reporting as our cash deficit.  In addition, the social benefit trust fund will be underfunded by another $5.5 Trillion for a projected GAAP deficit of nominally $6.5 Trillion in FY2015.


This means that U.S. public liabilities will increase in FY2015 by this $6.5 Trillion (our GAAP Deficit) to $104.6 Trillion (our GAAP Obligation) and the "apparent net worth" of the U.S. citizens and U.S. businesses will "auto-magically" increase by this same $6.5 Trillion since they do not have to pay for the gross cash deficit or for the funding of the social benefit trust fund. What a deal!!!!!


The public liabilities go up so the private assets (for the rich) can go up. 

Socialize the losses and Privatize the gains!!!!!!

The Corruption of the U.S. Government CONTINUES in FY2015!


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