It's official! U.S. government is bankrupt

[Confederate Kahanist]

yeah thanks Obongo, Bush and Pelosi!!

http://www.wnd.com/index.php?fa=PAGE.view&pageId=113366

It's official! U.S. government is bankrupt
'It's only a matter of time before the public realizes it'

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Posted: October 18, 2009
10:09 pm Eastern

© 2009 WorldNetDaily

Editor's Note: The following report is excerpted from Jerome Corsi's Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist. This week, he is including a Chapter One excerpt from his book, "America for Sale." Red Alert subscriptions are $99 a year or $9.95 per month for credit card users. Annual subscribers will receive a free autographed copy of "The Late Great USA," a book about the careful deceptions of a powerful elite who want to undermine our nation's sovereignty.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the 2008 Financial Report of the United States Government released by the U.S. Department of Treasury, Jerome Corsi's Red Alert reports.

The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit based on data reported in the 2008 financial report is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.

The calculations in the 2008 financial report are calculated on a GAAP basis ("Generally Accepted Accounting Practices") that includes year-for-year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare. Under cash accounting, the government makes no provision for future Social Security and Medicare benefits in the year in which those benefits accrue.

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Economist John Williams, who publishes the website Shadow Government Statistics, told Corsi, "As bad as 2008 was, the $455 billion budget deficit on a cash basis and the $5.1 trillion federal budget deficit on a GAAP accounting basis does reflect any significant money reflected to the financial bailout or Troubled Asset Relief Program, or TARP, which was approved after the close of the fiscal year."

He continued, "For 2009, the Congressional Budget Office estimated the fiscal year 2009 budget deficit as being $1.2 trillion on a cash basis, and that was before taking into consideration the full costs of the war in Iraq and Afghanistan, before the cost of the Obama nearly $800 billion economic stimulus plan, or the cost of the second $350 billion tranche in TARP funds, as well as all current bailouts being contemplated by the U.S. Treasury and Federal Reserve."

Williams told Corsi the federal government's deficit is hemorrhaging at a pace that threatens the viability of the financial system. He said the 2009 budget deficit will clearly exceed $2 trillion on a cash basis and the full amount must be funded by Treasury borrowing. He noted that it's not likely to happen without the Federal Reserve acting as lender of last resort by buying Treasury debt and monetizing the debt.

Corsi explained, "'Monetizing the debt' is a term used to signify that the U.S. Treasury will ultimately be required to print cash to meet Treasury debt obligations, acting in this capacity only because the Treasury cannot sell the huge amount of debt elsewhere, possibly not even to the Federal Reserve."

So far, the Treasury has been largely dependent upon foreign buyers, principally China and Japan and other major holders of U.S. dollar foreign exchange reserves, including Middle East oil-producing nations purchasing U.S. debt through their financial agents in London.

"The appetite of foreign buyers to purchase continued trillions of U.S. debt has become more questionable as the world has witnessed the rapid deterioration of the U.S. fiscal condition in the current financial crisis," Williams noted.

Corsi wrote, "The sad reality is that the U.S. Treasury has not reserved any funds to cover the future Social Security and Medicare obligations we are incurring today."

Williams said there are no funds held in reserve today for Social Security and Medicare obligations each year. He said it's only a matter of time until the public realizes that the government is truly bankrupt.

Corsi wrote that if President Obama adds universal health care to list of entitlement payments the federal government is obligated to pay, the negative net worth of the United States government will only get worse.

Calculations from the 2008 Financial Report of the United States Government show that the GAAP negative net worth of the federal government has increased to $59.3 trillion, while the total federal obligations under GAAP accounting now total $65.5 trillion.

Williams explained the federal government is truly bankrupt and argued that in a post-Enron world, if the federal government were a corporation such as General Motors, "the president and senior Treasury officers would be in federal penitentiary."

Red Alert's author, whose books "The Obama Nation" and "Unfit for Command" have topped the New York Times best-sellers list, received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financial services marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.

In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.

For financial guidance during difficult times, read Jerome Corsi's Red Alert, the premium, online intelligence news source by  the WND staff writer, columnist and author of the New York Times No. 1 best-seller, "The Obama Nation."

[~Hanna~]

Some of us in the public, realized it a long time ago.

 

[cjd]

America has been living like the guy that been in financial distress for some time. Each month the guy pays a bill that they didn't pay in the prior month. Each month the situation becomes  harder and harder to work because even though the guy has been making a payment here and there to keep his accounts going the interest on the accounts is becoming a bigger problem then the principal itself. The burning question is what chapter does America file when the gig is up? It seems like most of the other countries in the world are not in much better shape because they are playing the same shell game. Even China can't afford to kill the golden goose.....  2/3 of the factory jobs in China would evaporate overnight if America no longer was able to buy all the cr-p they produce. I honestly believe that the global monetary picture has become so complex and impossible to correct that none of the players want to be the one that brings down the house of cards. People are waiting  for the miracle that will never come that sets everything to right. I honestly believe that the picture is almost or might be past the point of no return. The big money people may have come to this conclusion already and are just waiting to see how it all shakes out.

[Mishmaat]

cjd's opinion is very worthy of consideration. And by the way, this is no laughing matter.

Social Security should be eliminated. It's nothing more than a Ponzi scheme. Medicare and Medicaid should be downsized rather than expanded through Obamacare. And while I certainly have empathy for people who are poverty stricken due to no fault of their own, I believe that these entitlement programs should all be eliminated. It's not the government's job to assist the unproductive people of society and punish those who are productive with burdensome taxes. We've also made loans and credit available too easily. And particularly to people who are grossly unqualified for it. Is it really much of a surprise that our economy is in the gutter?

Did I fail to mention the Federal Reserve? Forget about the wealth transfer to oil rich Islamic states and our lack of domestic production and our excessive imports. If we expanded domestic production/manufacturing and rendered crude oil a worthless commodity, we would still have tremendous problems.

[Mishmaat]

Oh, and we now have a "President" who has never held a job or managed a payroll, but yet he claims that he can solve our economic problems. God, we're in for a rough ride.