“The Federal Government Is Bankrupt. If The Federal Government Were a Corporation, the President and Senior Treasury Officers Would Be In [Jail]“

In the quote of the week, economist John Williams – who has been tracking the real fundamentals of the economy for many years at his website Shadow Statssaid:

“The Federal Government Is Bankrupt … If The Federal Government Were A Corporation … The President And Senior Treasury Officers Would Be In Federal Penitentiary.”

What’s Williams talking about?

He explains:

“The federal government’s deficit is hemorrhaging at a pace which threatens the viability of the financial system,” Williams added. “The popularly reported 2009 [deficit] will clearly exceed $2 trillion on a cash basis and that full amount has to be funded by Treasury borrowing. ***

“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. ***

“Truthfully,” Williams pointed out, “there is no Social Security ‘lock-box.’ There are no funds held in reserve today for Social Security and Medicare obligations that are earned each year. It’s 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.

Apparently, the $53 trillion dollars in total government liabilities as of July 2008 – $455,000 per American household – is now up to some $65.5 trillion. As the article quoting Williams points out, that is greater than the GDP of the entire world.

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  • http://www.blogger.com/profile/05678841372682695630 Joseph Hutchison

    Really? You’re quoting a WorldNetDaily article by that paragon of journalistic integrity, Jerome Corsi? And citing as an expert the right-wing partisan Williams, who sits on the Hoover Institution board of directors and advises both the Cato Institute and the Heritage Foundation? This isn’t to say he’s wrong, but a little disclosure would give his views context; and it would be more than a little interesting do track his record as a predictor of economic events over the past, oh, 15 or 20 years.

  • http://www.blogger.com/profile/15426920337506809987 Bill

    Regardless of the source, the only “assets” of the social security part of the Government are non-marketable debt obligations of another part of the government. Here’s how to fund your family retirement savings the same way. Borrow a couple of Mill. from the wife, write her a note. Spend all the money. Now your secure in retirement because your wife has a $2m note. Let me know how it goes.

  • http://www.blogger.com/profile/05680089965602433856 phishna

    Yes they are bankrupt and have been since they started running deficits yes they are all criminal because they allow the Federal Reserve to existyes they have sold out to foreign interests which is treasonand yes the US of A is the name of the federal corporation located in the District of Columbiasimilar essays found here:http://www.blogger.com/profile/16312560191165755438

  • http://www.blogger.com/profile/02975241234146573609 Democracy Lover

    Yes, the government has been raiding the Social Security cookie jar for sometime. What the SSA holds in the trust fund are IOU’s backed by the full faith and credit of the United States. While we can certainly question exactly what that “full faith and credit” means in real terms, it is a contractual obligation to pay – even when the payee is a part of the government itself.Although increased government spending is essential to get the economy to some sound position, we do need to deal with the extraordinary spending on the military, the extraordinary cuts in taxes on the wealthy and corporations over the last 30 years, and the extraordinary lack of enforcement of the tax laws except on the poorest Americans. What we do not need to do and what will be counterproductive (and cause the violence noted in the previous post) is to cut benefits to retirees, to make our health care system even worse, and to continue the obscene gap between rich and poor in this country.

  • http://Anonymousnoreply@blogger.com Anonymous

    Joseph:Read the budget reports to the President from earlier this decade. They quite clearly spell out at least a 44 trillion dollar shortage.And please, could you New York types stop saying, “really.” It’s starting to get moldy.

  • http://www.blogger.com/profile/05678841372682695630 Joseph Hutchison

    Anon.: You don’t answer my question about Corsi’s track record, but never mind. What really gets me—no, really—is your idiotic “New York types” comment. I was born and raised, and after a few brief side trips continue to reside, in the vicinity of Denver, Colorado. Both parents were Colorado natives, too. Guess you’ll have to scrape the mold off your peculiar little prejudice. But then you might have to start posting with a “real” name, instead of gutlessly as “Anonymous.”

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