Yes, The US Government Really Is Bankrupt

Tyler Durden's picture

Submitted by Simon Black via,

I’ve long-stated that the government of the United States is completely insolvent.

And that is 100% true statement.

The government’s own numbers show that official liabilities, including debt held by the public and federal retirement benefits, total $20.7 trillion.

Yet the government’s assets, including the value of the entire federal highway system, the national parks, cash balances, etc. totals just over $3 trillion.

In total, their ‘net worth’ is NEGATIVE $17.7 TRILLION… a level that completely dwarfs the housing crisis.

If you include the government’s own estimates of the Social Security shortfall, this number declines to NEGATIVE $60 TRILLION.

And it gets worse every year.

Now, is this balance sheet an accurate reflection of reality? Do we really trust the bean counters to tell us what the United States of America is really worth?

Surely there must be significant intrinsic value to the United States military, for example.

Or the US government’s ability to collect taxes.

Or what about the value of all the natural resources underground?

These must all be HUGELY positive and would swing the government’s net worth back in the right direction.

Guess again.

The US military is certainly one of the best-trained and most effective forces in history.

But it’s difficult to place a substantial value on it when the government can no longer afford to use it.

And even when they do use it, the overall cost of doing so is negative.

The wars in Iraq and Afghanistan have cost the taxpayers $4 trillion. But where’s the financial benefit?

Aside from a few defense contractors profiting handsomely, the Chinese got most of the oil.

ISIS ended up with much of Iraq. And Iran made out like a bandit, with the US government taking out its most threatening neighbors free of charge.

Mission accomplished.

Bottom line, even the best asset in the world can end up being a big liability if it’s used improperly.

So what about the tax authority of the US government? If Uncle Sam can collect $3 trillion in tax revenue each year, surely that must count as a huge asset.

And it absolutely is. If you conduct a Present Value calculation of the future tax revenue of the US government discounted by the official 2% rate of inflation, the US government’s ability to tax its citizens is ‘worth’ $150 TRILLION.

But… if you’re going to count the government’s tax authority as an asset, you have to be intellectually honest and consider the expenses as liabilities.

Think about it: yes, the government brings in tax revenue every single year. But for nearly every year over the last seventy years, they’ve spent far more money to deliver on the promises they’ve made to their citizens.

Those promises are liabilities. And given the government’s spending history since the end of World War II, the liabilities far exceed the tax authority asset.

More importantly, though, isn’t it a little bit scary to consider that the government’s #1 asset is its ability to steal money from you?

Or that the only way the government can make its liabilities go away is by defaulting on the promises it has made to its citizens?

That’s their only way out: steal from you, and default on you.

*  *  *

Join me in today’s very sobering (and inspiring) podcast as we dive deep into the government’s own numbers and discover the truth… and what you can do about it.

(click image below for audio)

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Government needs you to pay taxes's picture

US citizen private assets valued @ $80 trillion.  Can you spell W-E-A-L-T-H tax?

Ballin D's picture

Good, nearly all of that belongs to the ultra-wealthy.  Take what theyve taken from the rest of us through a century of central bank manipulation.

NoDebt's picture

Please describe how, exactly, that little piece of "wealth removal only from the ultra-wealthy" surgery should be performed.

The ultra-wealthy have one thing going for them:  they are highly mobile.  They see it coming and they simply leave.  All taxes hit basically the same demographic they always have- the middle class and below, with the middle class supporting the VAST majority of the burden.

Ballin D's picture

If our leadership was capable of anything close to 'surgery' we wouldnt be sitting here talking about how are government is imploding. We both know it would never work out how I said above in the real world.

HardAssets's picture

"our leadership"

Peoples first mistake right there.

They don't give a damn about us. They only care about their egos, power, and enriching themselves. They see us as only pawns to be used.

Government needs you to pay taxes's picture

Tut tut.  If you a good worker, you might be promoted to (White) housenigger.

Dick Gazinia's picture

Just sell some more baby parts.  Problem solved.

AE911Truth's picture

We have the authority to sieze the assets of the criminals, and return those assets to those from whom the assets were stoen:

The Lien

stacking12321's picture

nodebt is right, your suggestion to tax the ultra-rich is impractical, it wont work.

they are well connected, have lawyers and lobbyists, and will find a way around any taxation you try to impose, either by changing the law, or restructuring how or where they hold there assets

the taxes will instead fall on the middle and upper middle class, wrecking them.

instead of finding a way to prop up the morally and fiscally bankrupt us federal governemnt, let them collapse, we dont need them.

Lea's picture

"nodebt is right, your suggestion to tax the ultra-rich is impractical, it wont work.

they are well connected, have lawyers and lobbyists, and will find a way around any taxation you try to impose, either by changing the law, or restructuring how or where they hold there assets"

Yeap. But that is counting without the nuclear option, the one that works and therefore, will never be implemented in the USA: nationalize their asses.
You can't tax them, they evade taxes - nationalize.
They don't provide jobs anymore, since they outsource their production - nationalize and they'll go nowhere. All the $millions they make will go straight into the State coffers, which will be that much less debt for the citizens.
As a tool, nationalization has precisely been invented by people who knew full well the pack of sharks they were dealing with and their sneaky ways of evading all their social and economic responsibilities.

Of course, you can't do that in the USA, as dat would be so comminist or so cialist*, and 'Murikans, who are willing slaves, would fight to the death not to do anything that could sadden their Uber-rich.

(*Nationalizations ARE NOT socialist, let alone communist, they are only economic common sense. Even the British empire, which was as socialist as I am the Queen of England, had huge national assets, amongst which its central bank.)


stacking12321's picture

"All the $millions they make will go straight into the State coffers, which will be that much less debt for the citizens."

why do you want to support our oppressors (the state), by giving them more money, when you see what they do with it?

do you want more innocent people being killed around the world? do you want more crony corporations to be bailed out? do you want more spying and eavesdropping on us citizens? more persecution of whistleblowers?

as far as "less debt for the citizens", don't let them brainwash you like that - those who take on the debt are those who are obligated to repay it. the federal government's debt is not my debt, i did not agree to it. it is called "odious debt":

manofthenorth's picture

One Troy Ounce at a time ? ;-)

kappal_toba_dhurr_ne_thook's picture

MOBILE is right. Rich USA wallas (people) are all over here in Singapore.  They are increasing in Japan and other places in Asia as well.  

Mind you, they are NOT leaving for tax purposes but for safety (i.e. they are smart enough to know that when the shitake hits the fan there is going to be MASSIVE rioting and shooting and all other things that Americanos like to do) and so they are getting the hell out NOW.

But if taxes are raied that is only going to hasten more to leave.  As it is rich homes are lying vacant and it is funny that few people wonder where those inhabitants have gone to. They have GONE, SPLIT, HUSSELED THEIR BUTTS out the door already.  Many are in Europe, with London being an all-time  favorite. They are going to Spain, Portuga, etc. 

So YES!  Raise their taxes and see what happens.  


tarabel's picture



Singapore is a small, effectively defenceless city state situated at one of the major commercial choke points of the world. To suppose that it is a "safe" location, rather than an artificial construct of the current worldwide financial system that will be taken down in its collapse, seems rather unlikely to me.

In the event of a major war, there are a number of places on the planet that are all but guaranteed to be sucked into the conflagration and Singapore is certainly one of them. Indispensible geographic location and a metropolis stuffed full of loot makes it a doubly attractive objective for warring empires to control, or at least ravage and render useless to the opposing bloc.

But then I consider anyone who lives in any large city anywhere to be a ripe target and, frankly, out of their minds at least so far as moving to a safe location is concerned.

In the words of the Reverend Clarence Henry in "Alas, Babylon":

"... they is goin' to get it!"

angryBuddhist's picture

When the next war escalates it won't matter where you are. Your fate will be decided by trade-winds and the jet stream more than anything else.

FrankDrakman's picture

Er, the numbers don't agree with your narrative. The top 10% - surely they are the upper, not middle class, despite their protestations - pay ~70% of income tax. The bottom 50% pay nothing. The 40% remaining pay about 30%, so the middle class is not even paying its own share. 

taopraxis's picture
taopraxis (not verified) Oct 18, 2015 7:33 PM

Take SS @62. Bird in the hand...

Crocodile's picture

SHOCKING I TELLS YA; JUST SHOCKING.  Agenda21 is on schedule unlike Amtrak.

kappal_toba_dhurr_ne_thook's picture

Ahhh Amtrak!  I forget was a  crappy system that was!  They couldn't even get me from Newark to Penn Station in NYC (a 15 minute ride) on time.  



HowdyDoody's picture

That would have absolutely nothing to do with the rail freight companies that own the tracks giving priority to freight over passenger traffic, would it?

Jack Burton's picture

It all means nothing as long as all of the earth accepts printed green paper as the common currency. It may be printed from nothing, but everyone accepts it as stored value. The US prints and spends, the world goes along. This is the great mystery of modern times. "Why would people all over the world send resources, energy and value added products to the USA in return for nothing but green printed fiat"?

Government needs you to pay taxes's picture

I agree, nominally.  However, I suspect the world is in fact demanding we sacrifice our freedoms in exchange for letting us continue our profligacy.

Global Observer's picture

"Why would people all over the world send resources, energy and value added products to the USA in return for nothing but green printed fiat"?

Inertia in most cases and in some cases fear of being invaded and destroyed if they stopped doing it. But it is all coming to an end soon.

Countries will still need to trade and pay each other for the goods and services they import from each other and since there is no currency that doesn't suffer from the same drawbacks that the US$ suffers from while having the advantage of being transferable electronically, it hasn't happened yet. That will change when the New Development Bank (BRICS Bank) announces the issuance of its own 100% gold backed electronic currency for international trade and available only to Central Banks of participating countries. This will happen when the next financial crisis, due any time now, hits.

yagbols's picture

You can always leave the United States.

Nexus789's picture

They are making it harder to leave. Next thing will be to not allow you to leave and become a citizen of another  country.

HardAssets's picture

The bankster federal reserve act and income tax were put in operation in the same year - 1913. Co-incidence ?

You US Citizens are nothing but collateral.

Just like cattle are collateral for the farmer.

Just like the slave is the property of his master.

1033eruth's picture

100%  The liberal/statists say that building a wall on the Mexico border is to make the US a prison (as if this piece of flotsam has great wisdom) when you can't leave the US without a passport anyway.  A fancy piece of paper with your photo on it, is enough to prevent your escape.  

You can enter, but you can't leave.  Unless of course you want to brave the desert of soiled diapers through some unwalled portion of the border. 

Teh Finn's picture
Teh Finn (not verified) Oct 18, 2015 7:42 PM

NFL week 6 baby!  Gotta get in my DraftKings picks!  Wooo!

ersatz007's picture

The people that down voted you apparently don't understand the concept of sarcasm.

JustObserving's picture
Economist Tells Congress: U.S. May Be in ‘Worse Fiscal Shape’ Than Greece

The U.S. has a $210 trillion “fiscal gap” and “may well be in worse fiscal shape than any developed country, including Greece,” Boston University economist Laurence Kotlikoff told members of the Senate Budget Committee in written and oral testimony on Feb. 25.

“The first point I want to get across is that our nation is broke,” Kotlikoff testified. “Our nation’s broke, and it’s not broke in 75 years or 50 years or 25 years or 10 years. It’s broke today.

"Indeed, it may well be in worse fiscal shape than any developed country, including Greece," he said.


Chapter 11 bankruptcy = money for nothing, & chicks for free.

Chupacabra-322's picture

The Bankruptcy of The United States
United States Congressional Record, March 17, 1993 Vol. 33, page H-1303

Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:

"Mr. Speaker, we are here now in chapter 11.. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner’s report that will lead to our demise.

It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.

The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: "The U.S. Secretary of Treasury receives no compensation for representing the United States?’

Gold and silver were such a powerful money during the founding of the united states of America, that the founding fathers declared that only gold or silver coins can be "money" in America. Since gold and silver coinage were heavy and inconvenient for a lot of transactions, they were stored in banks and a claim check was issued as a money substitute. People traded their coupons as money, or "currency." Currency is not money, but a money substitute. Redeemable currency must promise to pay a dollar equivalent in gold or silver money. Federal Reserve Notes (FRNs) make no such promises, and are not "money." A Federal Reserve Note is a debt obligation of the federal United States government, not "money?’ The federal United States government and the U.S. Congress were not and have never been authorized by the Constitution for the united states of America to issue currency of any kind, but only lawful money, -gold and silver coin.

It is essential that we comprehend the distinction between real money and paper money substitute. One cannot get rich by accumulating money substitutes, one can only get deeper into debt. We the People no longer have any "money." Most Americans have not been paid any "money" for a very long time, perhaps not in their entire life. Now do you comprehend why you feel broke? Now, do you understand why you are "bankrupt," along with the rest of the country?

Federal Reserve Notes (FRNs) are unsigned checks written on a closed account. FRNs are an inflatable paper system designed to create debt through inflation (devaluation of currency). when ever there is an increase of the supply of a money substitute in the economy without a corresponding increase in the gold and silver backing, inflation occurs.

Inflation is an invisible form of taxation that irresponsible governments inflict on their citizens. The Federal Reserve Bank who controls the supply and movement of FRNs has everybody fooled. They have access to an unlimited supply of FRNs, paying only for the printing costs of what they need. FRNs are nothing more than promissory notes for U.S. Treasury securities (T-Bills) - a promise to pay the debt to the Federal Reserve Bank.

There is a fundamental difference between "paying" and "discharging" a debt. To pay a debt, you must pay with value or substance (i.e. gold, silver, barter or a commodity). With FRNs, you can only discharge a debt. You cannot pay a debt with a debt currency system. You cannot service a debt with a currency that has no backing in value or substance. No contract in Common law is valid unless it involves an exchange of "good & valuable consideration." Unpayable debt transfers power and control to the sovereign power structure that has no interest in money, law, equity or justice because they have so much wealth already.

Their lust is for power and control. Since the inception of central banking, they have controlled the fates of nations.

The Federal Reserve System is based on the Canon law and the principles of sovereignty protected in the Constitution and the Bill of Rights. In fact, the international bankers used a "Canon Law Trust" as their model, adding stock and naming it a "Joint Stock Trust." The U.S. Congress had passed a law making it illegal for any legal "person" to duplicate a "Joint Stock Trust" in 1873. The Federal Reserve Act was legislated post-facto (to 1870), although post-facto laws are strictly forbidden by the Constitution. [1:9:3]

The Federal Reserve System is a sovereign power structure separate and distinct from the federal United States government. The Federal Reserve is a maritime lender, and/or maritime insurance underwriter to the federal United States operating exclusively under Admiralty/Maritime law. The lender or underwriter bears the risks, and the Maritime law compelling specific performance in paying the interest, or premiums are the same.

Assets of the debtor can also be hypothecated (to pledge something as a security without taking possession of it.) as security by the lender or underwriter. The Federal Reserve Act stipulated that the interest on the debt was to be paid in gold. There was no stipulation in the Federal Reserve Act for ever paying the principle.

Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until the Federal Reserve Act (1913)

"Hypothecated" all property within the federal United States to the Board of Governors of the Federal Reserve, -in which the Trustees (stockholders) held legal title. The U.S. citizen (tenant, franchisee) was registered as a "beneficiary" of the trust via his/her birth certificate. In 1933, the federal United States hypothecated all of the present and future properties, assets and labor of their "subjects," the 14th Amendment U.S. citizen, to the Federal Reserve System.

In return, the Federal Reserve System agreed to extend the federal United States corporation all the credit "money substitute" it needed. Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the federal United States didn’t have any assets, they assigned the private property of their "economic slaves", the U.S. citizens as collateral against the unpayable federal debt. They also pledged the unincorporated federal territories, national parks forests, birth certificates, and nonprofit organizations, as collateral against the federal debt. All has already been transferred as payment to the international bankers.

Unwittingly, America has returned to its pre-American Revolution, feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, We the People are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. We the people have exchanged one master for another.

This has been going on for over eighty years without the "informed knowledge" of the American people, without a voice protesting loud enough. Now it’s easy to grasp why America is fundamentally bankrupt.

Why don’t more people own their properties outright?

Why are 90% of Americans mortgaged to the hilt and have little or no assets after all debts and liabilities have been paid? Why does it feel like you are working harder and harder and getting less and less?

We are reaping what has been sown, and the results of our harvest is a painful bankruptcy, and a foreclosure on American property, precious liberties, and a way of life. Few of our elected representatives in Washington, D.C. have dared to tell the truth. The federal United States is bankrupt. Our children will inherit this unpayable debt, and the tyranny to enforce paying it.

America has become completely bankrupt in world leadership, financial credit and its reputation for courage, vision and human rights. This is an undeclared economic war, bankruptcy, and economic slavery of the most corrupt order! Wake up America! Take back your Country."

OldPhart's picture

He's lucky to just have been sent to prison rather than the usual assassination. (Which may still come.)

Chupacabra-322's picture

Can't kill something that already dead. Trafficant died a few years ago.

FlacoGee's picture

I was not aware he died!

Thanks for the heads up.


May 8, 1941 – September 27, 2014

FiatFapper's picture

Why do sovereign governments borrow money from central banks and pay interest?

Why don't they print their own fiat?

Bradbury pound

Nexus789's picture

Then how would the bankers steal from us.

FiatFapper's picture

The fiat must be fapped...

Jack's Raging Bile Duct's picture

It maintains the illusion in order to enable greater profligacy. Going Wiemar or Zimbabwe is too honest and ends quickly because of that honesty. Possess a central bank to obfuscate the ordeal, and people are baffled by the bullshit to think counterfieting writ large is actually beneficial! It certainly appears to have fooled you.

FiatFapper's picture

"It certainly appears to have fooled you"

My questions were rhetorical.

Jack's Raging Bile Duct's picture

Then cheers, Mate. Or Tears. It's difficult to know which is appropriate these days.

Global Observer's picture

It is simply an accounting trick. All the interest paid (or most of it, in cases where private entities are shareholders of the Central Bank) is remitted to the government by the Central Bank, so it is no different from printing their own fiat. But having to borrow and pay interest means the interest payments show up in the annual budget and helps to keep exceesive borrowing (printing) in check and thus keeping inflation in check.

bunnyswanson's picture

"The Federal Reserve, after operational costs, is earning double the profits of Exxon Mobil ($44 billion) and Apple ($41 billion), and those two companies are doing a combined $600 billion in global revenues!"

The Federal Reserve sent about $77.7 billion in profits to the Treasury Department in 2013.

The Fed in a statement released Friday said it made an estimated $79.5 billion in net interest income, a total largely driven by the $90.4 billion in interest income it made on its portfolio of Treasurys, mortgage bonds and other securities."

HowdyDoody's picture

They used to. That was until the banksters came up with the scam of loaning kings/government money for war (at interest of course) in return for the right to print money.

No wars, no banksters. Or is it no banksters, no wars?

FrankDrakman's picture

It's a sad commentary on the human condition, and I am NOT AT ALL a bankster fan, but war existed as a human reality thousands of years before banks.

Banksters exacerbate wars, though. 

SillySalesmanQuestion's picture

They have already stolen the Social Security, and as soon as they steal the last of the commoners money, 401k's, trusts, retirement funds and private investment, the great heist will be over, for there will be nothing left to steal...
Liquidation Sale! Coming soon to a neighborhood near you.
Starve the beast by not feeding it!

Chupacabra-322's picture

"Starve the beast by not feeding it."

Exactly! Peaceful Non - Compliance / Non - Participation into theor Criminal Fraud System of Devt Bondafe & Enslavement.

Pack a Fun & Pay NO Tax.

kappal_toba_dhurr_ne_thook's picture

Better yet just go to a better country. USA is not as high up on the score as their propaganda media make them out to be.  Life there for most is hard if not horrid.  We picked up and left and so are many others. It is time to get out of Dodge!