2011 - Final Days of the American Empire:

The definition of insolvency is having liabilities or debts in excess of their assets and being unable to service payments on the debt with existing income. The US Government certainly qualifies in terms of having much more debt than assets. As for being able to service the debt, the time when they cannot is now drawing clear.

The US government released their "official" numbers for 2010 recently and so we can update our chart of total US government debt as calculated by GAAP (Generally Accepted Accounting Principles) - the same accounting principles to which all US companies must comply.

Total GAAP federal obligations rose to $76.3 trillion in 2010, up an astonishing $5.8 trillion since 2009. That is an increase of federal debt of $18,709 for every man, woman and child in the US. In one year.

Versus liabilities, the US government,

Here is the 2010 income for the United States government:

· $1.061 trillion - Individual income taxes
· $940 billion - Social Security and other payroll tax
· $222 billion - Corporation income taxes
· $77 billion - Excise taxes
· $23 billion - Customs duties
· $20 billion - Estate and gift taxes
· $22 billion - Deposits of earnings
· $16 billion - Other

Note that they include Social Security payroll tax as "income". This is highly fraudulent. Quite theoretically, these payments are supposed to be held and/or invested on behalf of the payee. But the US government just includes it as revenue and immediately spends it (which is why, under GAAP, the US now has such a massive unfunded liability).

So, if the $940 billion in Social Security payments are, rightfully, taken out of "revenue" then the actual income of the US government was $1.44 trillion in 2010.

Mandatory Spending: $2.184 trillion

· $677.95 billion - Social Security
· $571 billion - Other mandatory programs
· $453 billion - Medicare
· $290 billion - Medicaid
· $164 billion - Interest on National Debt
· $11 billion - Potential disaster costs

Non-Mandatory Spending: $1.368 trillion
· $663.7 billion - Department of Defense (including Overseas Contingency Operations)
· $78.7 billion - Department of Health and Human Services
· $72.5 billion - Department of Transportation
· $52.5 billion - Department of Veterans Affairs
· $51.7 billion - Department of State and Other International Programs
· $47.5 billion - Department of Housing and Urban Development
· $46.7 billion - Department of Education
· $42.7 billion - Department of Homeland Security
· $26.3 billion - Department of Energy
· $26.0 billion - Department of Agriculture
· $23.9 billion - Department of Justice
· $18.7 billion - National Aeronautics and Space Administration
· $13.8 billion - Department of Commerce
· $13.3 billion - Department of Labor
· $13.3 billion - Department of the Treasury
· $12.0 billion - Department of the Interior
· $10.5 billion - Environmental Protection Agency
· $9.7 billion - Social Security Administration
· $7.0 billion - National Science Foundation
· $5.1 billion - Corps of Engineers
· $5.0 billion - National Infrastructure Bank
· $1.1 billion - Corporation for National and Community Service
· $0.7 billion - Small Business Administration
· $0.6 billion - General Services Administration
· $19.8 billion - Other Agencies
· $105 billion - Other

The numbers are pretty simple. The US government had total real tax receipts of $1.44 trillion in 2010. This only pays for 66% of the Mandatory Spending, even if you got rid of 100% of the "Non-Mandatory" spending.

In other words, in order to balance the budget the government would have to cut 100% of Discretionary Spending and 34% of Mandatory Spending. What would that look like?

To do this, they would have to close every military base and lay-off every serviceman in the Armed Forces, shut down the Department of Transportation, the Department of Homeland Security and every other government agency and, as well, cut all Social Security, Medicare and Medicaid spending by 34%.

And that is just to balance the government deficit. To actually start to pay off the government debt they would have to cut 100% of the government and 100% of all Social Security and Medicaid spending.

To summarize, in order for the US government to even have any chance of paying off any of its debt it would have to completely disappear! We could only wish.

And even that doesn't take into account the possibility of greatly increasing interest expense. In 2010 the US government paid $414 billion in interest expenses. But that was at historically low interest rates. Considering the US had approximately $13 trillion in "official" debt in 2010 that implies a 3.1% interest rate. At what interest rate would interest payments on current debt outstrip the current government income (minus social security taxes) of $1.44 trillion? 11.1%.

... The report continues on for some length - the complete January issue rang in at a total of 19 pages including a junior gold stock pick that we believe has 20 bagger potential.

Other topics covered include:

• Awakening Thomas Jefferson
• Every major event in our lifetimes has been a lie, propaganda or misinformation and the one chance we have for truth, liberty, freedom and justice is now being attacked by the government
• 1984 & Brave New World were both right
• Numerical proof that the US Government is on the verge of complete insolvency
• What rate of interest would make the US Government insolvent right now? We have the answer
• You'll never guess who is now the largest holder of US Government debt
• Why you can't trust the ratings agencies on sovereign debt
• The top 20 performing cities in the world since the financial crisis started
• Why Chinese price controls on food & energy may end the "Chinese economic miracle"
• We re-rate Gold this month and show why Gold Stocks are still highly undervalued
• In the TDV Portfolio we add a gold mining junior in Mali with 20-bagger potential
• In our expatriation section we feature a country which is home to the "nicest, most unknown place in the world"
• Private Parts has some truly heartbreaking stories and always fascinating information from Inside the Belly of the Beast in Afghanistan
• In Survival & Health we feature two new ways to get in better shape, in less time and without even going to a gym.