March 11, 2015 Copy of the Email sent to the SEC
TO: Mary Jo White Chairwoman
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
CC: The Wall Street Journal
The New York Times
The Dallas Morning News
FR: John W. White
I am a Whistleblower! This is my seventh letter to the U.S. Securities and Exchange Commission expressing this complaint.
I contend that the Fiscal Policy of the Government of the United States of America is corrupt and fraudulent!
1) The U.S. Government is using Cash Accounting rather than the proper GAAP Accounting.
2) The U.S. Government is dramatically overspending its income.
By not using GAAP Accounting the U.S. Government is not funding the social benefit trust fund which means that the U.S. Government is making false social benefit promises to U.S. citizens. The U.S. Government is making social benefit promises that it has no financial capability or intention to fulfill.
The U.S. Government routinely reports the financial impact of its overspending on a cash basis but does not report the impact of using Cash Accounting vs. proper GAAP Accounting. As a result of these two issues with current Fiscal Policy, the U.S. Government is operating a massive ($100.9 Trillion) Ponzi scheme which I have named USAPonzi. The U.S. Government has been incurring unreported but massive GAAP basis Deficit Spending since FY1969 when LBJ introduced the "Unified Budget".
This has had the effect of introducing $100.9 Trillion of counterfeit money into the U.S. and global financial system. This money is counterfeit because it is to be paid by the future U.S. taxpayer and of course can never be paid. The fact that these public liabilities can never be paid is what produces the Ponzi scheme. These public liabilities, which are passed forward to the future U.S. taxpayer, will continue to expand exponentially until the U.S. Government adopts a policy of a balanced GAAP basis budget.
USAPonzi makes the U.S. economy appear to be nearly twice as large as it would be with proper accounting (See U.S. "Real" GDP FY2015).
USAPonzi has created $18.1 Trillion of Debt and $82.8 Trillion of Unfunded Liabilities. Our GAAP Obligation (Debt + Unfunded Liabilities) quantifies the amount of counterfeit money that USAPonzi has introduced into the U.S. and global economy.
USAPonzi has produced a GAAP Deficit of $6.5 Trillion in FY2015 when the U.S. Government reports a Cash Deficit of $0.5 Trillion.
USAPonzi has produced a GAAP Obligation of $100.9 Trillion when the U.S. Government only reports a Cash Debt of $18.1 Trillion.
USAPonzi has paid U.S. Government direct and indirect employees and U.S. Government related businesses $18.1 Trillion more than the U.S. taxpayer can afford. This overpayment is actually much more than the $18.1 Trillion of Cash Debt since our economic activity is overstated by nearly 2X so our sustainable tax revenues are also dramatically overstated by the U.S. Government stimulus of USAPonzi.
USAPonzi has undertaxed the prosperous U.S. citizens and businesses by $100.9 Trillion making the upper class appear to be $100.9 Trillion richer.
USAPonzi has caused the Stock Market to go up dramatically because of this $100.9 Trillion of counterfeit money that USAPonzi has created out of "thin air".
USAPonzi has left those that are expecting to receive, in many cases relying on, social benefits in a desperate situation because the U.S. Government has nothing in the social benefit trust fund to pay $87.8 Trillion worth of social benefit promises.
This Fiscal Policy (USAPonzi) is grossly unfair to the middle and lower classes while dramatically favoring the ruling and upper classes (See Cheating the Common Man!).
Massive Civil Unrest
This will lead to massive civil unrest when the general populace realizes that they have been hornswoggled by the U.S. Government so that the ruling class can live comfortable to opulent lifestyles and so that the upper class can live opulent to super opulent lifestyles and can also become wealthy even super wealthy.
USAPonzi has given the upper class $100.9 Trillion of counterfeit money and as an example has given Warren Buffett $57 Billion. Warren Buffett gets paid $10 Million every day because of this Fiscal Policy (See Buffett makes $10M a day on U.S. Government Corruption). The upper class as a whole gets paid $17.8 Billion every day even though the counterfeit money passes through the U.S. and global economy producing the economic stimulus of the GAAP basis Deficit Spending but for the most part it comes to rest as increased but phantom wealth for the upper class U.S citizens and businesses.
USAPonzi simply appears to make the U.S. citizens and businesses wealthy, primarily the upper class, by assuming massive public liabilities.
USAPonzi simply appears to make the ruling class prosperous and the upper class prosperous and wealthy by Cheating the Common Man!
USAPonzi is a Ponzi scheme of the same ilk as Madoff Ponzi only 2000 times bigger but has the same result for its victims. The early participants get paid their social benefits as promised, the perpetrators and operators (the ruling class and the upper class) live opulent to super opulent lifestyles while it is operating, and the late participants get ripped off because the ruling class is not funding the social benefit trust fund.
The current Fiscal Policy is consciously and unfairly allocating $100 Trillion of counterfeit money to the ruling class and the upper class by a simple accounting trick and by openly spending money that we do not have to overpay government workers and government related businesses and taking this money away from social benefit promises to the middle and lower class citizens. It is unconscionable that the U.S. Government would collect employment taxes under the pretense that these funds will be used to pay current social benefits and fund future social benefits and then immediately spend every penny that is collected to help overpay the ruling class. It is unconscionable that the U.S. Government would purposefully under tax the upper class to avoid funding the social benefit trust fund so that the upper class can appear to become wealthier by $100 Trillion.
I realize that the upper class will quickly respond and say they cannot afford to pay that much in taxes to pay for those social benefit promises. And they of course are right but until the U.S. Government begins using an accounting system that systematically makes an accurate assessment of what is affordable and what is not we will have major inequities. Right now the U.S. Government is essentially flying blind with its current budgeting process and is erring on the side of dramatically favoring the upper class and the ruling class to the severe detriment of the middle and lower classes. Misallocation of $100 Trillion is a massive problem.
The current fiscal policy (USAPonzi) is creating the illusion of economy recovery and economic prosperity for the ruling class and the upper class by printing imaginary money (counterfeit money) that it is borrowing from the future U.S. taxpayer while setting the rest of the U.S. population on a path toward financial devastation.
The www.usaponzi.com website includes a series of commentaries that further explain the issues and distortions that this Ponzi scheme has created and is creating.
This situation can only be resolved by the U.S. Government adopting GAAP Accounting and committing to a nominally balanced GAAP basis budget. This will ensure an equitable and sustainable Fiscal Policy.
Footnote: Since the U.S. Government does not routinely report its financial results with GAAP Accounting I have created USAPonzi Fiscal Model that shows my estimates and projections of both Cash Accounting and GAAP Accounting financials. The actual data (expenditures and revenue for FY2008-2014) in this model were sourced from www.usgovernmentspending.com. The GAAP data for FY2008-2014 were sourced from www.shadowstats.com who sourced this data from U.S. Government reports. The FY2015-2023 data, both Cash and GAAP, are my own projections made by extending current trends. As a result, the GAAP numbers that I show in this letter and on my website are estimates and we will not know the official numbers until the U.S. Government starts reporting on a GAAP basis.
John W. White
Retired Information Technology Executive