USAPonzi-The Great American Fraud

                                                 Copyright Declaration       PEMMA-Planet Earth Man-Made Apocalypse    John W. White   March 29, 2013


December 13, 2013

Open Letter to:
     The President of the United States of America  
     The Congress of the United States of America
     Harry Reid                Senate Majority Leader
     John Boehner           Speaker of the House
     Ben Bernanke           Outgoing Federal Reserve Chair
     Janet Yellen              Incoming Federal Reserve Chair            
     Paul Ryan                 House Budget Committee Chair
     Patty Murray             Senate Budget Committee Chair
     Tom Coburn              U.S. Senator (R) Oklahoma
     Erskine Bowles         Co-Chair, National Commission on Fiscal Responsibility and Reform
     Alan Simpson           Co-Chair, National Commission on Fiscal Responsibility and Reform
     David A. Vaudt          Chairman Government Accounting Standards Board
     Jim Cramer               Television Personality-CNBC
     David Faber              Television Personality-CNBC
     Joe Kernen               Television Personality-CNBC
     Larry Kudlow             Television Personality-CNBC
     Steve Liesman          Television Personality-CNBC
     Rick Santelli              Television Personality-CNBC
     Andrew Ross Sorkin Television Personality-CNBC
     Neil Cavuto               Television Personality-FOX Business
     Lou Dobbs                Television Personality-FOX Business
     Rush Limbaugh         Radio Personality
     Doug Casey               Economic
     George Friedman      Global Intelligence
     Michael Tanner         Senior Fellow-Cato Institute
     John Mauldin             Financial
     John Williams            Financial
     Robert Shiller             Nobel Laureate in Economics
     Paul Krugman            Nobel Laureate in Economics
     Jeremy Siegel            Economics Professor-Wharton
     Laurence Kotlikoff      Economics Professor-Boston University
     Gerard Baker              Editor-in-Chief Wall Street Journal    
     Scott Burns                 Newspaper Columnist-Dallas Morning News
     Will Deener                 Newspaper Columnist-Dallas Morning News

The action taken this week by Congress to address our fiscal deficit and debt was a positive but minuscule step in resolving our fiscal dilemma.   By my calculation it addressed about 1/100th of 1% of the problem.   It will, as I understand it, reduce our Cash-based deficit by about $22 Billion this fiscal year when our Fiscal Gap is $205 Trillion.  I too am encouraged that we got bipartisan agreement but it was essentially an agreement to do nothing right now but just delay the decision for 2 more years.   Meanwhile we have a Cash-based debt of $17.2 Trillion, a GAAP-basis Obligation of $91 Trillion and a Fiscal Gap of $205 Trillion.   Because we are using Cash-based financial assessment and reporting we do not appreciate just how serious the fiscal situation really is.

I feel that this problem is so severe that it must be addressed as soon as possible by the Congress.   I realize that the actions that we will be required to take to resolve it will be very difficult politically and will have major impact on the U.S. and global economy but I also feel that we have no choice but to face both of these challenges.  I have been analyzing this problem (via by looking at our fiscal status through the lens of GAAP-basis accounting and have been able to assess the dramatic distortion that Cash-based accounting is causing for our economy.   However I feel that we can gain even more insight into the financial commitments that we have made by adopting fiscal gap accounting as it gives an even more complete and comprehensive assessment of our financial health.

The website includes a downloadable interactive spreadsheet fiscal model that projects our financials for the next 10 years. This model shows projections for our Cash-based Deficit, our GAAP-basis Deficit, our Federal Debt, and our Federal Obligation.  This website also includes a page that gives a very basic description of the differences between Cash-based accounting, GAAP-basis accounting, and Fiscal Gap accounting.   

There is now an effort underway to bring a bipartisan bill (the INFORM ACT) to Congress that proposes the use of fiscal gap and generational accounting for assessing and reporting our fiscal health.  

The INFORM ACT is a bipartisan bill introduced, in the Senate, by Senator Kaine (Democrat from Virginia) and Senator Thune (Republican from South Dakota) and co-sponsored by Senator Coons (Democrat from Delaware) and Senator Portman (Republican from Ohio). Congressman Cooper (Democrat from Tennessee) and Congressman Shock (Republican from Illinois) have introduced the bill in the House.

The INFORM ACT requires the Congressional Budget Office (CBO), the General Accountability Office (GAO), and the Office of Management and Budget (OMB) to do fiscal gap and generational accounting on an annual basis to assess the sustainability of fiscal policy and measure, on a comprehensive basis, the fiscal obligations facing our children and future generations. The ACT also permits Congress to request fiscal gap accounting and generational accounting to evaluate major proposed changes to fiscal policy.

This website ( provides information regarding this act.

Making a change of this magnitude in our financial reporting will require significant endorsement of the need for the change by distinguished stakeholders and thorough education of the citizenry.  This website has already started that process by getting the endorsement of over 1000 economists including 15 Nobel Laureates in Economics.

We have a U.S. Economy that is riding on the full faith and credit of the Federal Government and we are essentially in debt by $205 Trillion with an income stream of currently about $2.8 Trillion per year to both pay our current bills and to service that debt.  Our current Cash Accounting methodology does not appropriately reflect the magnitude of this current liability.  As is evident by this assessment the "virtual interest" on our "virtual debt" is more than twice as big as our "real" income.  

The further complication will be that by taking the actions necessary to resolve this issue we will dramatically reduce that real income stream.  But we really have no choice as we must assess and report properly before we can truly fix the problem.

This problem must be communally accepted by Congress and the U.S. citizenry but prompt action by Congress to consider and approve the INFORM ACT is essential to getting the United States of America on a sustainable fiscal path.

John W. White
Retired Information Technology Executive
Plano, TX