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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Wednesday, March 7, 2012

Say Again: What Do the People Owe Goldman Sachs?

Debt service as a "top claim on government resources?" Man, the world is upside down when and if the government of, by and for the people places paying debt to banks above paying for the services of its most vulnerable people. We can see how perverted the political and financial systems have become.

In reality, the government does not owe anything to the banks. If the government had not been hijacked by corporations and banks in the past few years, we would not hear such ridiculous claims by the banks (and repeated by the media in this article). If the government were not already captured by the banks, it could do away with investment banks altogether and charter a bank that services the need of its people and not the debt of the banks.

It is the investment banks like Goldman Sachs that are superfluous to the benefits of the community rather than Social Security and Medicare. It would be interesting to see Goldman's off-the-balance-sheet liabilities before it borrowed $800 billion from the Federal Reserve. Debt holders should have shared all the pain when they brought down the financial system in 2008 instead of being bailed out by taxpayers. Where is the humility, banking industry?

Watch what you say to the people, Mr. Goldman Sachs!

Goldman Sachs: Social Security and Medicare Are 'Weaker' Promises Than Debt
By Peter Coy - BloombergBusinessweek

A report released today by Goldman Sachs says that if push comes to shove, the federal government will pay its lenders before it pays Social Security and Medicare beneficiaries. Debt service “should be seen as the top claim on government resources in most cases,” says the Goldman analysis.

On one hand, the idea that lenders come first is blindingly obvious. Just look at what happened last summer, when the government tied itself in knots to make sure it didn’t default on bond payments. Of course lenders stand at the head of the line for taxpayers’ money. On the other hand, if things got really bad in the U.S.—as in Greek bad—the priority of payments could start to flip. At some point, as we have seen in Athens, citizens rise up against lenders and insist that the country protect its own ill and elderly before it pays faceless creditors at home and abroad.

So it’s interesting for all concerned—creditors and beneficiaries of the federal government alike—to understand how much the government owes to whom.

One number soars scarily above all others. It’s the burden of Social Security, Medicare, and other entitlements in excess of money set aside for them, otherwise known as “unfunded entitlement payments.” Their net present value is 188 percent of gross domestic product. By contrast, debt held by the public—which got all the attention last summer—has a net present value of 54 percent of GDP. The federal government’s total on- and off-balance-sheet net liabilities, present and future, have a net present value of 299 percent of gross domestic product, Goldman calculates.

Read the entire article here


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