“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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