The True Cause of America’s Troubles


Are you wondering why the U.S. economy has now stagnated — despite the largest government stimulus, bailouts, and money printing of all time?

Are you puzzled why the real income of American households has just suffered its worst plunge in recorded history — despite the so-called “recovery” of 2009-2011?

Do you want to know why it now takes 40.5 weeks for the average unemployed worker to find a new job — also the worst in recorded history?

And are you flabbergasted by the utter failure of the U.S. Congress to do anything about trillion-dollar federal deficits for years to come?

Then, let me tell you precisely what’s causing this mess.

The fundamental source of the nation’s troubles is DEBTS that are far larger and more destructive than Washington admits.

Indeed, the U.S. government is covering up the magnitude of the nation’s debt disasters with three major deceptions:

Debt Deception #1
Washington Excludes the Massive
Debts of Federal Government Agencies

“As long as the government’s debt burden is under 100 percent of GDP,” they say, “we can handle it. It’s only when it surpasses the 100 percent threshold that we’ll be in danger.”

True or false?

Let’s look at the numbers:

• U.S. GDP is $14.6 trillion. And …

• According to the Federal Reserve’s Flow of Funds, U.S. Treasury debts outstanding are $9.7 trillion.

• So that means the debts are well under the 100 percent danger threshold, right?

Wrong! The authorities conveniently ignore a massive $7.6 trillion of additional government debts that have piled up on the books of U.S. government agencies, such as Fannie Mae and Freddie Mac.

These agencies were created by the U.S. government, have always been controlled by the U.S. government, and now, after the federal bailouts of the last debt crisis, are even owned by the U.S. government.

How in the world anyone could possibly exclude their debts from the U.S. government’s books is beyond me. And yet that’s precisely what Washington does.

Add those debts to the government’s total burden … and guess what! Instead of $9.7 trillion in federal government debts outstanding, the actual total comes to $17.3 trillion — a whopping 118.3 percent of GDP!