Stephen Moore-Heritage Foundation Letter
July 24, 2016
Distinguished Visiting Fellow
The Heritage Foundation
214 Massachusetts Ave NE
Washington DC 20002-4999
I am greatly concerned about the current condition of the global economy and the implications that a meltdown of the economy could have on the social, financial, and geo-political stability of the entire planet.
I know that you are an economic advisor to several of our politicians and I hope that you will read my book that explains my thoughts on the social, financial, economic, and geo-political crisis that the entire planet is about to endure. In my view, this crisis will be so massive that it will require a total reformation of the U.S. Government, our financial system, and our banking system.
I feel that it is imperative that we begin openly discussing this coming crisis and how we plan to resolve it. Your voice in presenting this issue to the officials within the U.S. Government would help immensely in dealing with this problem. Two other powerful voices that can help with this discussion are David Walker, former U.S. Comptroller General and Dr. Laurence Kotlikoff, Economics Professor at Boston University.
The primary source of my concern is the fiscal policy of the U.S. Government. Since FY1969 the U.S. Government has been operating its budgeting and financial planning processes with Cash Accounting rather than the proper GAAP Accounting and therefore has been deferring massive public liabilities to the future U.S. taxpayers.
This fiscal policy has fraudulently produced an artificially and dramatically elevated standard of living for all Americans, an opulent standard of living for the U.S. ruling class, and a super opulent standard of living for the U.S. upper class.
Because the U.S. Government is operating with Cash Accounting to assess its financial condition, it has deferred $102.9 Trillion of public liabilities to the future U.S. taxpayers. Because the U.S. upper class has not paid the taxes to cover the U.S. Government's spending and committing to spend, the U.S. upper class has gained faux wealth of $102.9 Trillion. Further, the U.S. Government is overpaying Government employees and overpaying social benefit recipients so the entire U.S. citizenry is spending much much more than our U.S. earning power can support.
It is my assessment that because of the current fiscal policy, we have a dramatically accelerated rate of consumption that is filling the planet with junk (cars, planes, houses, office buildings, malls, cities, airports etc. etc..) that we are paying for with the imaginary-counterfeit money produced by this Ponzi scheme (See Filling the Planet with Junk!). The current fiscal policy is borrowing more money from the future U.S. taxpayers every day ($15.7 Billion a day) and giving it to the U.S. citizenry so that we can buy things we cannot afford.
GAAP basis deficit spending creates what I call imaginary-counterfeit money. The U.S. Government imagines that the future U.S. taxpayers will eventually be able to pay these deferred public liabilities so this is imaginary money but the future U.S. taxpayers can never pay these deferred public liabilities so this is counterfeit money (See The Theory of Imaginary Money).
The U.S. upper class is getting faux rich because the U.S. Government is borrowing faux money from the future U.S. taxpayers to give to the U.S. upper class.
I am also convinced that the artificially and dramatically elevated lifestyle in the United States, produced by this Ponzi scheme, is a major contributor to global terrorism (See Why "Radical Islamists" hate the Western World!).
The U.S. fiscal policy is a classic Ponzi scheme that is systematically deferring public liabilities to the future Americans. When this Ponzi scheme implodes, I predict that we will experience a global depression that will be even more severe than "The Great Depression". My analysis indicates that our current ratio of U.S. total liabilities to GDP is today 4X greater than what it was in 1929 (See U.S. Total Financial Leverage is 4.2X 1929).
My financial analysis is based on the data presented by www.usdebtclock.org which is summarized below comparing Cash and GAAP deficits and comparing the National Debt to US Unfunded Liabilities on a GAAP basis.
According to Generally Accepted Accounting Principles (GAAP), the U.S. Government has a Deficit in FY2016 of $5.74 Trillion and Unfunded Liabilities of $102.9 Trillion. Our current fiscal policy is patently absurd and it is making the U.S. upper class appear to be filthy rich and is filling the United States and even the entire planet with massively unaffordable physical assets.
|Cash Deficit in FY2016
|GAAP Deficit in FY2016
|Unfunded Future Liabilities
|US Unfunded Liabilities (GAAP)
|Total National Assets
Source: www.usdebtclock.org Jul 21, 2016
The U.S. Government is committing fiscal and accounting fraud to enhance the lifestyle of current Americans but is setting up the entire planet for a massive financial system and economic crisis of epic proportions.
I have tried to encourage the U.S. Government to address this U.S. Government fraud by sending 12 Whistleblower letters to the SEC and a Whistleblower letter to each member of Congress and to each member of the Supreme Court (these letters are posted on my website www.usaponzi.com).
This problem can only be equitably resolved by the adoption of GAAP Accounting and a commitment to a balanced GAAP basis budget by the U.S. Government.
This change to GAAP Accounting will be very, very traumatic for the entire planet. This imaginary-counterfeit money, currently $102.9 Trillion, will evaporate into the "thin air" from whence it came when USAPonzi implodes (See The Implosion of USAPonzi).
In order to create a level economic playing field that is sustainable over time and equitable throughout the planet, the U.S. Government must eliminate this fraud and corruption. The U.S. Government must stop cheating the future Americans and the rest of the planet just so it can dramatically enhance the lifestyle of current Americans (See Getting Rich on Borrowed Money)!
USAPonzi is explained in much more detail on my website www.usaponzi.com and in my book "USAPonzi" which is available on Amazon in Kindle and paperback format and on www.usaponzi.com in PDF format.
I will send you a copy of my book "USAPonzi" but as I say my website presents the latest update of my book in PDF format.
This is the biggest ($102.9 Trillion) financial fraud ever perpetrated, I call it "USAPonzi: The Ultimate Government Fraud" and "The Biggest Ponzi Scheme on the Planet".
John W White