Keeping a "Non-Secret" Secret
Feb 14, 2014
The Federal Government has been running this USAPonzi scheme for now 46 years (since FY1969) but everyone that could say something to expose this scheme has been willing to kept quiet and allow it to continue. This was clearly a problem from the day that LBJ convinced Congress to go along with his ruse to coverup the cost of the Vietnam war. But it has also been in the best "personal" interest of everyone in Washington to let the Ponzi scheme run since everyone in Washington is directly on the take from USAPonzi. It is also in the best "personal" interest of most people on Wall Street to let the Ponzi scheme run since everyone that invests in the financial markets has the opportunity to reap the benefits of the exponentially increasing amount of new dollars that the Federal Government pumps into the economy every day. It is in the best "personal" interest of anybody that owns, runs, or works for any business entity to let the Ponzi scheme run because USAPonzi is putting artificial stimulus into the U.S. economy every day ($17.6B a day during FY2014). It really helps those people that work for the Government or for businesses that provide products and services to the Government since they have an open tap into the stream of money coming out of Washington courtesy of USAPonzi so it is in their best interest to let the Ponzi scheme run. It is in the best "personal" interest of the nearly 150 million people that are getting payments from Washington "paid for" by USAPonzi to let the Ponzi scheme run. So not many people are prepared to declare just how serious the problem is and thereby cause it to implode. As a result almost everyone is willing to stay silent about what by now is surely a well known problem.
The answer seems to be that if we all lie together maybe it is not a lie.
Which is worse?: Not knowing or knowing and not telling.
This problem is surely well known by most everyone of any stature in Government, on Wall Street, or in a major business. In fact, most of the U.S. citizenry is well aware that we have too large a "deficit" and too much debt. But it could be that even a lot of the people that I give credit for knowing just how serious and absurd our fiscal crisis is may in fact not really understand. But when the fiscal crisis becomes broadly exposed what will be the excuse that each person will give for why they did not say something. Can they say "I didn't know it was a problem". Can they say "I didn't think it was that bad a problem"? Can they say "I knew it was a problem but I didn't know it was this bad"? Can they say "I knew it was a problem but I didn't think is was my responsibility since I knew it would create an untenable situation when it is exposed"? So which is worse? Not knowing or knowing and not telling.
I would expect almost everyone will take the line; "I knew it was a problem but I didn't know it was this bad"? That way they can claim to know about the problem but have an excuse for keeping quiet. I contend that this is like a Nancy Pelosi moment when she said "we need to pass the Affordable Care Act to find out what is really in it." In this case we will need to balance the GAAP basis budget to find out how serious the problem really is. But no one in Washington, and I mean no one, will agree to go there. They started to ease their way toward this end with the "Two Sequester" gap closing action at the start of 2013 (the Sequester and the tax increases) and then they backed off of some of the Sequester with the Ryan/Murrary budget deal in Dec 2013. But I contend that we need to implement 65 Sequesters (see Sequester-Another Absurdity) to balance the GAAP basis budget! No one is prepared to touch that one with a ten foot pole. I would guess that there a lot of people in Washington that do not know that the problem is that serious!
I'll keep quiet if you'll keep quiet.
As a result every one that could do something about the problem is willing to let things run along trying not to cause any big ripples. Congress came to a two year budget agreement (Dec 2013) that seems to assure that USAPonzi will operate for another couple of years. Congress this week (Feb 10, 2014) agreed to raise the debt limit one more time but they must know that with current policy they might as well raise the debt limit to $94 Trillion since that is the current Federal Obligation. No one wants to be the first one to speak up about the true severity of the problem plus most people seem to benefit from USAPonzi so no one is prepared to speak up. But this is a problem with our form of Government, when more than half of the voting population, whether it is the general population or the Congress, wants something to happen it can get voted into policy independent of whether or not it is affordable.
If that many people are in favor of letting USAPonzi continue, who could possibly be against.
Well not many in the near term and that is why almost everybody is willing to keep quiet for right now. Don't upset the apple cart! The only people that have a real ax to grind on this issue appear to be the "future taxpayers" since they are the ones that are now stuck with a $94 Trillion bill for this outrageous spending by Washington and many of them can't vote yet and some of them are not born yet. That makes it very easy for Congress to send them the bill for what seems to be an unlimited amount of money. Congress does not have to look these people in the eye and tell them that Congress has already spent most of their money.
The problem is that the U.S. Financial System is in a massive squeeze play. Our fraudulent accounting system is allowing the Government to spend an exponentially increasing amount of taxpayer money every year without telling the U.S. citizens and the World just how wildly they are spending. This future taxpayer money is in the end going to people and businesses that own assets. Yes some of the money goes first to the people that get social benefits. Some of the money goes first to people that work for the Government or people that work for businesses that work for the Government. Some of the money stays with taxpayers (since the Government is not taxing enough to pay our bills) and it is then spent back into the economy. But each of these paths is just a necessary and convenient way to get the money thru the economy so that asset owners wind up with the value of most of these GAAP basis deficit dollars in their portfoilios. (see Wealth Transfer).
Why is this a problem for asset owners? First of all these GAAP basis deficit spending dollars are phantom from the start since there is no way the future taxpayers can come up the money that Washington is promising. These dollars are increasing at an exponential rate so by the time these phantom dollars get thru the economy and on the portfolios of these asset owners they are still phantom. When USAPonzi implodes most of these assets will evaporate just like the assets in the portfolios of Madoff investors evaporated.
Why is USAPonzi a problem for people that are receiving social benefits? First of all the benefits that are currently being paid are unaffordable and thus will have to be reduced in almost all cases and will have to be eliminated all together in many cases. But also because USAPonzi is creating inflation at a rate of 5% per year and hence the purchasing power of the currently paid benefits will be cut in half every 14 years unless they are properly adjusted for inflation. Also, the way USAPonzi works, the GAAP basis deficit spending will increase faster than the economy will grow and therefore our GAAP basis deficit spending will become a larger portion of total private U.S. assets which will in turn cause the rate of inflation to increase from the current nominal rate of 5%. (see Financial System Chaos Jan 26. 2014 and Inflation-A Byproduct of USAPonzi )
Why is USAPonzi a problem for people that work for the Government and for people that work for businesses that get a significant amount of their business from the Government? When the Government finally realizes that they are spending and committing three times as much as the current taxpayers are paying in taxes, the Government will have to reduce spending and reduce our Government payroll. These people are making financial commitments assuming that the Government will continue pay their salaries but many people will lose what now appear to be very good jobs.
Why is this a problem for business owners and business employees? The general economic activity in the U.S. is getting an annual stimulus of about 37.6% of GDP this year (FY2014) caused by the GAAP basis deficit spending by the Government. The FY2014 GAAP Deficit is, according to my current estimate, $6.4T and FY2014 GDP is $17.0T according to the Congressional Budget Office (CBO) ($6.4T/$17T = 0.376). When this stimulus stops (or when USAPonzi implodes) essentially all businesses will see a similar drop in their level of business and surely many of them will go out of business.
So the bottom line is that no one is willing to speak up and expose the fraud that Washington is perpetrating on the world. So the biggest fraud ever committed ("The Biggest Ponzi Scheme on the Planet") has now become a "non- secret" secret. Everyone of any stature in Government, business, or the media has apparently taken a vow of silence; I won't tell if you won't tell.
Next page: Rich get Richer/Poor get Poorer