Enquiries
The Federal Governments Debts Exceed Total World GDP
"The federal government is bankrupt," said economist John Williams in a recent interview. "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." As the Obama administration pushes through its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government is already measured in trillions of dollars, and its $65.5 trillion in total obligations exceeds the gross domestic product of the world. Total obligations, including Social Security and Medicare benefits to be paid in the future, effectively place the US government into bankruptcy, even without considering the new social welfare obligations included in the massive spending plan. The official federal budget deficit, calculated according to GAAP principles, is $5.1 trillion, and not the widely reported $455 billion. Neither number reflects any significant money from the financial bailout or TARP. The deficit is hemorrhaging at a pace that threatens the viability of the financial system, according to Williams. He says that the 2009 deficit will clearly exceed $2 trillion on a cash basis and that full amount must be funded by Treasury borrowing. It is unlikely this will happen without the Federal Reserve acting as lender of last resort. To date, the Treasury has been largely dependent on foreign buyers, but their desire to continue purchasing trillions in US debt has dwindled alongside the rapidly deteriorating US fiscal condition. It is only a matter of time until the public realizes that the government is truly bankrupt and no taxes are being held in reserve to pay in the future the Social Security and Medicare benefits taxpayers are earning today. The public has a right to know just how bad off the federal government budget deficit situation really is, especially since the situation is rapidly spinning out of control.
