Economic Outlook for 2013Jeff Berwick, Contributor This is how systems fail. Especially, violent, thieving systems that are based on confidence. As we look forward, in this January issue of TDV, to the year ahead we will start with some charts from the past that still hold true today and update a few charts to show the continuing death spiral that the US and most Western governments are in. First, a chart we have used in the past but it needs to be re-asserted. This chart, all by itself, all but explains how out of control are the US governments financial affairs. Things appear to have gotten a little bit out of control since August 15, 1971 when the last vestige of gold backing was removed from the dollar and the US government defaulted on its obligations. When done by the government, however, it is fine. It does many things like this. If the US government were to actually properly account for its criminal activities and adhere to Generally Accepted Accounting Principles (GAAP), something that every company in the US must adhere to, then the fiscal situation looks much worse. We updated this chart this year, which weve been doing since 2009 and total GAAP debt and obligations in 2011 added up to approximately $5 trillion (data provided by Shadowstats.com). Divided by the population of 305 million, that is $278,688 for every US subject or well over $1 million per family of four in money that has already been borrowed and spent by the US government. And, even that is in doubt and likely higher as once again, the Government Accounting Office (GAO) stated in 2011 that they could not render an opinion on the consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations. To quote the GAO: As was the case in 2010, the main obstacles to a GAO opinion on the accrual- based consolidated financial statements were: (1) serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable, (2) the federal governments inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal governments ineffective process for preparing the consolidated financial statements. Forgetting for the moment whether or not the US governments financial statements are even real or not, and assuming they are, the recent fiscal cliff debacle shows that the US government is working itself into a corner more by the day. [Editors Note: In order to read the rest of Jeff Berwicks investing advice for 2013 and beyond, please subscribe to TDV here.] linkwithin_text=Related Articles: 