U.S. Fiscal Policy is Absolutely Absurd!
What am I missing?
Mar 5, 2015
As posted on www.usaponzi.com
The current Fiscal Policy of the U.S. Government is ABSURD! Or is it VIRTUALLY ABSURD? Or is it ABSOLUTELY ABSURD? I think it is the latter!
As LBJ was finishing up his term as president in 1968, he wanted to "balance the budget" and "pay for" the cost of the Vietnam war. To do this he set up, what is now USAPonzi, by deciding that the U.S. Government and the U.S. citizens would both have a lot more money to spend if he did not tax the U.S. citizens and businesses to pay for the social benefit promises. He used what is one of the oldest and simplest tricks in the accounting world, make future financial commitments and not make any provision for how to pay for them by using Cash Accounting vs. GAAP (accrual) Accounting. This is the old "get something for nothing" trick.
After 46 years of this ruse, nearly everybody is still falling for this con game. What am I missing? We are running the U.S. economy and the global economy based solely on the trust that the U.S. Government will pull a rabbit out of the hat and eventually start paying an exponentially increasing public liability. Our public liability is our GAAP Obligation that is now $100.9 Trillion and growing by $17.8 Billion a day.
This is a classic Ponzi scheme! And yet the stock market and our financial system in general still thinks that the counterfeit money that is being created by our GAAP basis deficit spending is somehow of value because it is backed by the "full faith and credit of the U.S. Government". What am I missing?
The U.S. Government's Fiscal Policy is creating private wealth by assuming public liabilities. The ruling and upper classes get this counterfeit wealth and the middle and lower classes get ripped off. The ruling and upper classes get paid today and the middle and lower classes are the ones left holding the bag when it becomes evident that the U.S. Government was just kidding about being able to pay those social benefit promises.
By my estimates, and yes they are estimates, we now have about $100 Trillion of public liabilities and $111 Trillion of private assets based on GAAP Accounting. According to Fiscal Gap Accounting our public liabilities already exceed our private assets but that is another story for another time. Our public liabilities will soon exceed our private assets on a GAAP basis with current Fiscal Policy.
This is Absurd! This is Insane? What am I missing?
The more the U.S. Government falsely promises the better off we think we are! What am I missing?
The Stock Market continues to go up as the U.S. Government creates more counterfeit money. What am I missing?
The global economy continues to let us buy stuff with this counterfeit money. What am I missing?
But not to worry; we will have more counterfeit money tomorrow as the U.S. Government creates $17.8 Billion of the stuff every day!
The ruling class and the upper class get that counterfeit money today. The middle class and the lower class get the empty promises that they will get paid tomorrow. What am I missing?
This is an intoxicating Ponzi scheme and we all want it to be real. But it is not real. It is ABSOULTELY and VIRTUALLY ABSURD!