US Budget Deficit: The Biggest Scam in History

Everyday in newspapers or television we read or see that the US government is bringing out some bailout plan or the other. But most us (at least me) wonder as to where can it bring such large amounts of money. One very obvious answer would be,"Well, the U.S. governement owns the Fed and the mint, so they print more money." Those who give this answer should realize that printing more money leads us to one of economics most basic principles,"Too much money chasing too few goods." The natural corollary of this would be inflation and in some cases even hyperinflation. 

This is what happened in Germany after the World War, Argentina and more recently Zimbabwe. Germany after the World War was bogged down by the enormous amount of debt levied upon it by the victors. The result was that three years after the World War, one dollar was equivalent to 2.5trillion marks (I took the e.g. from a documentary called The Crash The Coming Financial Collapse of America)

1$=2,500,000,000,000 marks

After the Oct bailout the US budget deficit has ballooned to $11.3 trillion. The following graph show the burgeoning US budget deficits over the years and the projected numbers. 

So what does the U.S. government do to mange the the same. The following are the points that were shown in the video mentioned before:

1. Temporary Budget Extensions
2. Use funds from the Social Security Trust
3. Transfer budget overuns into the next fiscal year
4. Shift budgets like the Gulf war off budget

All these methods do not lead to reducing the deficit rather they are used to show smaller numbers in the country's accounts so as to maintain investor faith. A point that can now be raised is can't the other major financial powerhouses (read countries) bring this out. Well why should they? Almost all of the foreign exchange reserves of the various countries is held in dollars. So if even let's say Japan wakes up one fine day and suddenly decides to convert all its reserves into some other currency, it would lead to such a hue and cry across the globe that in the end even before Japan converts all its reserves anything in dollar would be worthless. And that is why we find investors and countries alike running to invest in US T bills even after the US markets tanked.

And that is why I term the US budget deficit as the biggest fraud ever.