Federal U.S. Debt Has Ballooned to Over $100 Trillion! 60 comments
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Currently, the US federal debt stands at more than $100 trillion. According to the recent US stock market rally, the fact that the US government is not only bankrupt but has put every four-person family in America on the hook for more than $1.45 million does not merit concern. Of course, in reality, the US economy and the US stock market are two entirely different creatures. Perhaps, if the Plunge Protection Team took a prolonged vacation, US stock market behavior would begin to reflect the fundamentals of the US economy again.
However, it is important for an investor to understand that due to the not-so-invisible hands of Goldman Sachs (GS), JP Morgan (JPM) and the Plunge Protection Team, quite often, the US market can move higher for sustained periods of time even when the fundamentals of the US economy at large are atrocious. This is the fiat money-induced phenomena otherwise known as irrational exuberance. In the long run, the fundamentals of the economy at large will catch up and drive US stock market behavior once again.
Despite the recent stock market rally, the fundamentals of the US economy are downright scary. According to the figures released by the US government, as of May 25, 2009, the US federal debt stood at $11.3 trillion, about $37,000 for every man, woman and child in the US (we’ll get to the real federal debt figure soon). To accommodate this growing debt, the US government merely raises its debt ceiling every so often to avoid default in the US Treasury market. Currently this debt ceiling stands at $12.104 trillion.
Recently foreign appetite for Treasury auctions has dried up and the US Federal Reserve has resorted to buying US Treasuries in the absence of foreign demand to keep the US Treasury market from collapsing. However, what if the largest foreign holders of US Treasuries realized that the current US federal debt already exceeded the national debt ceiling by $98 trillion? How would they feel about keeping the US Treasuries they currently hold?
According to Richard W. Fisher, the president and CEO of the Federal Reserve Bank of Dallas, the unfunded liabilities of the US Social Security and Medicare system stand at $99.2 trillion today. That figure is not a misprint. If the US government plans to keep operating the Social Security system and the Medicare system, then the official federal debt really is $11.3 trillion plus $99.2 trillion, or $110.5 trillion. Why does our government state that its federal deficit is only slightly north of $11 trillion (with the term “only” a relative term, given that the true US deficit is about ten times greater than the “official” government figure)? Over the years, the US government has stated several reasons why they don’t include unfunded obligations in their official debt figures, with one of the most common reasons being that these programs are optional and can be cut at any time.
However, this practice is tantamount to a corporation omitting the cost of its health benefits program from its operational expenses even though it has promised its employees health care benefits. If the government is omitting the expense of the nationwide Social Security and Medicare programs from its budget, is this an admission that these programs will soon be history? Given the fact that a $110.5 trillion deficit puts every American family of four on the hook for more than $1.45 million, it seems unlikely that those of us that have paid a lifetime of Social Security taxes but are still many years away from eligibility will actually live to see the benefits of doing so.
Or maybe I am being too hasty. Richard Fisher explains that mechanisms that can fund the currently unfunded obligations of the Social Security system ($13.6 trillion) and the Medicare system ($85.6 trillion) do exist. For example, “a permanent 68 percent increase in federal income tax revenue, from individual and corporate taxpayers, would suffice to fully fund our entitlement programs.”
Other than that, the only other mechanism to keep the nationwide Social Security and Medicare programs afloat in the future, according to Fisher, would be to cut discretionary spending by 97%, thus eliminating the majority portions of the national budget for defense, security, education, and the environment. Of course, this solution is not viable, so we are left to explore the alternative permanent 68% increase in taxes. Or perhaps the solution is to devalue the dollar until it takes $1 trillion to purchase a single loaf of bread. Then, the sale of 100 loaves of bread could solve this nasty shortfall. Sarcasm aside, I make this point to illustrate the severity of this problem.
The government may attempt to implement the tax solution but it is probably more likely that when push comes to shove in the political arena, they will have to axe either the Social Security and Medicare programs, or maybe even both. If you think this outcome is unfathomable, consider that for these two programs and their associate benefits to survive, $99.2 trillion either has to be raised through taxation or cut from programs that have already promised funds. There is no other solution to this problem, other than to attempt to inflate the $110 trillion deficit away.
Furthermore, when debating the realm of discretionary spending cuts to refill the government’s coffers, this avenue, in reality, is not viable either, simply because cuts from any other programs other than from those of national defense and national security won’t be large enough to make an impact. In the end, it seems as though most of us still believe that a bankrupt government can provide the backbone for an economic recovery.
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This article has 60 comments:
2. The $99 trillion is but the quantification of false promises, national delusions and a measure of political deception . It shows how vast the BIG LIE really is.The promises will not be kept, the delusions will dissolve and the decption will be unvelied. The governing elites have not only ravaged our present; they have systematically looted our future and dishonored all the sacrifices and heroism of our past. There never were the resources needed to redeem the promises, there are no resources today and there cannot be adequate resources in the future. The elites have consumed our substance.
I think many people cognitively know that SS and Med need to be overhauled to eliminate the unfunded liabilities - either through benefits reduction, or increases in taxes (and likely a combination of both). I think Obama is genuine in his willingness to tackle the problem.
I am not sure any of us can really handle the truth!
And has anyone ever really cared and bothered why and how the govt. could exclude all the expenses for the Iraq- and Afghanistan wars from their annual budget and budget deficit calculations? As if these hundreds of billions were sort of monopoly money that didn't count.
and, to manya05: you can either stop indexing, or you manipulate the indexes. It's being done already - just look what the CPI has become over time, which is the index for indexing living expenses. At one point you simply exclude all inflationary stuff from it by all sorts of hedonic factor crap and gone are the problems.
Again, you have the parallels to that in corporate America with all these 'pro forma earnings' (earnings before all bad stuff) and 'non-recurring items' that turn out to recur astonishingly regular
'Throughout history,' he says, 'what the political class has done is they have turned to the central bank to print their way out of an unfunded liability. We can't let that happen. That's when you open the floodgates.'
Given the facts of the current situation, the track record of fedgov, and the well-documented actions of governments throughout history, the future is clear. The US will default again, the only remaining question is what they will call it.
under the circumstances it would be wise to prepare to take care of yourself and those you care for. we are caught in a scam and we won't even be allowed to cut our losses and exit.
And guess what? When the financial crisis is finally over and banks have rebuilt their balance sheets with taxpayer money - the taxpayer will be on the hook - to these very bankers as they collect most of the interest on treasury bonds!!
IT's a shame and the biggest financial crime ever comitted.
On May 27 07:34 AM expatriot08 wrote:
> Sounds like we, the public need to step up and stop crying about
> paying taxes. We all want this idyllic lifestyle but we don't want
> to pay for anything. Being selfish isn't going to get us out of this
> mess that started in the Reagan years.
We are taxed already beyond any thing our founding fathers would have ever believed. It is time for a revolution to change our thieves in washington. We need term limits, strict controls on spending and an end to the socialization of america. SSI was a ponzi scheme for socialists from the get go. It has become a welfare program now. We could stop payments to ANYONE on the plan that has not contributed and has not reached the minimum age. No exceptions. Let the states provided for thier citizens in a manner they see fit.
The Federal govt needs to get out of our lives and return power to the states where the citizens can keep a closer eye on our govt and we can control spending.
This is coming to a head rapidly, either we are a patriot who wants to fix this country or we are a YOU. Expatriot willing to pay anything and become financial slaves. Simply an income stream for an out of control govt.
On May 27 07:34 AM expatriot08 wrote:
> Sounds like we, the public need to step up and stop crying about
> paying taxes. We all want this idyllic lifestyle but we don't want
> to pay for anything. Being selfish isn't going to get us out of this
> mess that started in the Reagan years.
I'm with everyone else that we need to do something about SS and medicare, but if you can count future earnings/losses on today's balance sheet, then I guess I was born a multimillionare. I wonder why my family of 5 lived in an 800 sqft house when we were so wealthy the day I was born?
On May 27 07:34 AM expatriot08 wrote:
> Sounds like we, the public need to step up and stop crying about
> paying taxes. We all want this idyllic lifestyle but we don't want
> to pay for anything. Being selfish isn't going to get us out of this
> mess that started in the Reagan years.
On May 27 10:59 AM Hari Swaminathan wrote:
> While I'm not disputing the fact that unfunded liabilities is probably
> very large, the article fails to provide details on these numbers.
> The 85T for Medicare is unfunded till what year - and is it discounted
> to present value ? I'm sure we can arrive at an even outrageous number
> if we consider unfunded obligations for the next 500 years.
But all the hot air on earth wont make a 100 trillion dollar elephant fly.
1 trillion is a million million or,
1 followed by 12 zeroes.
Therefore, 100 trillion is 1 followed by 14 zeros.
300 million Americans is 3 followed by 8 zeros.
Doing the math:
A $100 trillion debt represents a debt of about $3,000,000 for every man, woman and child in the United States.
You are correct. The $100 trillion future debt is not "written in stone". The problem is that the avoidance of that outcome is only accomplished with painful decisions involving taxes, curtailment of entitlements (which are misnamed - no one is entitled, only indulged) and changing of American lifestyles. The political will to avoid the painful death may not exist. Can America "take the cure?" I do not want to give an answer to that question, because I fear it would be negative.
Looking at my parenthetical comment above, I have a proposition:
Let's change the name "entitlement" to a new word "indulgement".
Wm.
caribbeanrealty.ca
A revolution? No way you can rally up a substantial number of people. Plus the FBI will nail you faster than you can say "hi".
Talking is theraputic, but action is what's real. What action though?
BTW, I don't blame Reagan for the economic mess we're in, although his gutting of energy alternatives and conservation sure
hasn't helped. You have to go back to the Nixon administration:
Lack of a true energy plan, eliminating the gold standard, and the
resulting dollar devaluation are the culprits.
On May 27 07:34 AM expatriot08 wrote:
> Sounds like we, the public need to step up and stop crying about
> paying taxes. We all want this idyllic lifestyle but we don't want
> to pay for anything. Being selfish isn't going to get us out of this
> mess that started in the Reagan years.
heroin to put us budget sucking boomers away before we become too much of a burden. Euthanasia should be legal by the time I turn 67.
I'll see what's left of you on the other side.
It is kind of like feeding wild animals. If you do, they will forget how to hunt and will depend on you. It is time we taught our citizens "how to hunt" again. At the very least, our savings rate will go up. You know that social guarentees are the reason Americans don't save.
On May 27 01:39 PM WAKEUP wrote:
> If what you want, Mr. Kim, is revolution, the kind that leaves dead
> people lying around, then cut social security out, and you will get
> your wish. Almost EVERYBODY has somebody who depends on social security
> to keep them from starving, and yet some of you "enlightened" intellectuals
> seem unable to fathom this basic reality. Starving the old folks
> is the wrong way to fatten the pockets of well-fed, well-dressed,
> hipsters like yourself.
Not CAN be cut, WILL be cut.
Right after we either default on our debt and/or inflate like crazy to make all that debt meaningless.
Our economy is in terrible shape and we are a bankrupt nation but if we can get over this idea that our government is going to take care of us (cutting all the entitlement programs will take care of that) we will once again be a GREAT nation. Never underestimate the United States of America and its ability to screw up horribly and then get its act together like no other country.
> I think we have gotten where we are because we have forgotten something
> fundamental. Friedman used to say "There are no economic rights".
> I don't have a right to something that makes you have to pay for
> it. All this social security and medicaid is a gigantic economic
> right. Yet you never hear a politician talk about it that way. I
> don't think even Ron Paul has ever said "There are no economic rights".
> It needs to be understood that it's a serious thing if someone is
> demanding that someone else provide something of economic value for
> them. The society got so wealthy that economic rights seemed possible,
> everyone forgot basic economics, and now we are teetering on bankruptcy.
This is the best comment I have ever read. I just replied to it so that we would all have the opportunity to read it again.
> The US defaulted twice last century; once in 1933 when gold in circulation
> was seized and then "revalued" upwards by 70%, and again in 1971
> when Nixon ended convertibility. Both of these were undeniable and
> deliberate acts of monetary default by fedgov, and were done in response
> to economic conditions of the time. "Money for nothing" has always
> been government's response to the unsustainability of its own policies.
> Fisher said that also in his interview with WSJ:
>
> 'Throughout history,' he says, 'what the political class has done
> is they have turned to the central bank to print their way out of
> an unfunded liability. We can't let that happen. That's when you
> open the floodgates.'
>
> Given the facts of the current situation, the track record of fedgov,
> and the well-documented actions of governments throughout history,
> the future is clear. The US will default again, the only remaining
> question is what they will call it.
WWIII?
China's going to be pissed!
China is pissed already. North Korea's "underground test" is an above-ground testament to China's contempt for our "profligacy." China is hoarding gold; I suggest doing the same.
Wash continues to get us to fight amongst ourselves and send them dollars to get elected. They play us like fools. Get out of the trap and realized that both parties are playing the same game with us. Take our money and spend it.
We need a third party. We need personal responsibility, we need to govern our own lives with out California telling Texas what its laws will be or taking Texas money to bail our California since they could not control thier spending. Get the Federal government out of our states rights and that problem would be solved.
Repeal the 17th amendment. Support the 10th. Give states back thier rights.
On May 27 02:39 PM pockyclips 2020 wrote:
> I agree. I still chuckle when folks say we should go back to Reaganomics,
> forgetting about the $1.6 trillion that comes due in 2012. In today's
> dollars, that's about $4.5 trillion, about what the Obama administration
> will rack up. Not saying that's good, but somehow Reagan is still
> thought of as being a fiscal conservative.
>
> BTW, I don't blame Reagan for the economic mess we're in, although
> his gutting of energy alternatives and conservation sure
> hasn't helped. You have to go back to the Nixon administration:
>
> Lack of a true energy plan, eliminating the gold standard, and the
>
> resulting dollar devaluation are the culprits.
BTW, just for your information, I'm a medicinal chemist at a biotech company where I've worked for 10 years. I am young by the standard that I don't believe the AARP propaganda that resembles your ill-conceived notions about SS.
And, yes, people would ABSOLUTELY do better investing their money elsewhere than the less than inflation growth that SS provides. There isn't a single US index that has performed worse than inflation over any 40 year time period like SS has.
On May 27 09:05 PM WAKEUP wrote:
> "Probably half the people receiving SS don't need it..." Are you
> even aware that people receiving social security benefits paid into
> a fund, much like an annuity, for a long time? Do you know how annuities
> work? Are you even dimly aware that the money being paid to social
> security recipients is money OWED these recipients, by the United
> States government, the same government which withheld the taxes to
> fund this program, from the recipients' paychecks, for years, and
> years, and years? Who made YOU the person-in-charge-of-wh... security?
> As for your "thought," "...almost no one would need it if they had
> put as much money into a retirement account as they had spent on
> SS", have you been paying ANY attention to what is and has been happening
> to "standard" retirement accounts, of the type you apparently think
> of, so highly? Where is your mind? One more thing, "thiazole," it
> is young (yes, I can tell that you are young, most likely a college
> undergraduate, likely a chemistry major, by the choice of "thiazole"
> as an alias) people like yourself who, by their youth and inexperience
> in this world, cause the largest percentage of trouble, by the very
> inexperience you so proudly wear as a badge. Do yourself a major
> favor; make a determined effort to grow up, and see things beyond
> the tunnel-vision view you now have as a college student.
>
On May 27 08:49 AM fireball wrote:
> social security is not in the bill of rights, nor is medicare. we
> all no the contract that has coerced us to pay is broken, soon to
> be defaulted. the country was founded on the idea that we should
> have the liberty to pursue the life and property that gave us happiness.
> the govt. largesse was never constitutional. it was government pursuing
> power and politicians pursueing office. i would rather have kept
> my assets that were confiscated for the good of the collective. i
> have never believed that my retirement was something to trust government
> with. because i was raised by parents who knew the largesse was far
> to extravagent i made the best preparations i could under the handicap.
> they could have been much better. i would like to simply stop pouring
> money into the perpetual bailout of government. i have managed to
> stop most of it by decreasing income. there will be more and more
> coercive taxation as the bloated beast fails. that is the sad truth.
>
> under the circumstances it would be wise to prepare to take care
> of yourself and those you care for. we are caught in a scam and we
> won't even be allowed to cut our losses and exit.
99% of the FDA approved drugs in your medicine cabinet were designed and synthesized by medicinal chemists.
On May 28 12:13 AM WAKEUP wrote:
> You asked, "Are you high?" No, I'm not "high." I have never been
> interested in things that make one "high." Interesting that YOU should
> choose a question relating to being "high," though, what with your
> being a " medicinal chemist," and all that sort of thing. "Medicinal,"
> huh? Yeah, right.
Government Manipulation and Interference:
It’s sad that the average American is totally unaware of the deceit, fraud and chicanery of our government. Using their “agents” (i.e. JPM and GS), our government entities (in particular, Geithner, his PPT, and the FED) have been manipulating everything (stocks, bonds, commodities, gold/ silver, etc.). In the end, their manipulation will only serve to exacerbate the severity of the nation’s financial chaos.
Congress is Incapable of “Rational Thought”:
I believe Bill Bonner said it best, when describing, to his amazement, how “out of touch” the average politician is during these critical times. Bonner was in DC recently, to meet/ discuss our nation’s problems with elected officials during an “off-the-record” meeting. Here’s an small snippet of what he heard:
'We were there to talk, of course, but we were more interested in listening.
"You don't understand," said a Senate functionary we met later, "these people live in Bubble World. They're protected from the real world by their staffs and by the system itself. You imagine that they would know what is going on. But they don't. They know less than we do. And they'll be the last to find out. They are so busy meeting constituents...dealing with donors...working out deals with their political parties and supporters...and feeling like big shots...they don't really have any time to study the issues. So they count on staff and party committees to tell them what to say, how to vote...and what to think." '
In brief, our elected officials, for the most part, are feathering their own nests, and are a disgrace to the values that America “used to” stand for.
Wakeup: is that a directive, or something you hope for, like the concept of fairness? You'd make a shitty king, even though you are smart as hell, because you consistently fail to see the points that you BOTH decry as outlandish but have a different way of writing about. I was gonna say "take a pill ferchrissake" but that was handled before I got my post out.
Thiazole: This is no forum to flaunt your doctorness. Dont toss the value of your very apt: > "Probably half the people receiving SS don't need it, half of the people who do need it wouldn't have needed it had they not expected to receive it, and almost no one would need it if they had put as much money into a retirement account as they had spent on SS" < simply because someone reacts in a non-understanding you-hit-my-hotbutton way.
Oh yes we all paid dearly for this program, and yes, fairness would dictate that we, at very least, receive inflation adjusted value for those blood monies-- maybe even in the form of tax credits?? but to end the argument on a relative knowledge of pharmaceuticals is a disservice to yourselves AND us.
Meanwhile, Mr Kim's accounting principals aside, it was clearly a valuable and thought provoking article for which he should be proud. And I found incredible value in MOST of the thoughtful and learned response.
God, I love it that there are so many smart and patriotic minds at work on these problems. A fact that will sadly eliminate you from government participation....thanks for reading.
Ok, so the smart and quick learning among us who have some concept of what the future may be like, would prosper and/ or dare I say? survive!
The others? well if they are cute or entertaining, or have some ineffable quality that makes those who pay the bills want to keep them, in other words some intrinsic value other than being able to utter the phrase, "but what about mmeeee..., how come HE gets all the stuff?" well then you're all set. Otherwise please shut t f up and help pull on this rope.
Had our society not consistently squandered its riches and pandered to those least able, this boat would floating in rose water with puhlenty room for all.
This is what terrifies me the most. When the "WAKEUP"s and "expatriot08"s make policy, as they have since Teddy Roosevelt and Woodrow Wilson took office, it is only a matter of time before the flipside of the coin becomes Reality. When government bureaucrats determine the Fitness of an individual. This is not an argument about entitlement programs and unfunded mandates- it is an argument over LIBERTY. If they can take as much of your paycheck as they want, tell you what level of healthcare you WON'T receive, and devalue your money as much as they desire because it is THEIRS not yours, your liberty is gone. Think I'm crazy? Read the history of the National Socialist party. The Bolshevik revolution. Don't think it can happen here? Don't be so naive. Problems of this proportion, unfortunately, have never resolved themselves peacefully in human history. If you're concerned about people dying in the streets, we need to Starve the Tapeworms NOW, not later.
On May 28 01:09 PM jambo wrote:
> What exactly, in a Darwinian sense, would be wrong with letting folks
> manage their own retirement portfolio?
> Ok, so the smart and quick learning among us who have some concept
> of what the future may be like, would prosper and/ or dare I say?
> survive!
>
> The others? well if they are cute or entertaining, or have some
> ineffable quality that makes those who pay the bills want to keep
> them, in other words some intrinsic value other than being able to
> utter the phrase, "but what about mmeeee..., how come HE gets all
> the stuff?" well then you're all set. Otherwise please shut t f
> up and help pull on this rope.
>
> Had our society not consistently squandered its riches and pandered
> to those least able, this boat would floating in rose water with
> puhlenty room for all.
But nobody wants to pay for what they've 'always' wanted. This time in 2011, I'm wondering how many of those historic advocates for the disable among us, you know, the ones who have put wheelchair ramps on every corner in America, TWICE, how many would want some of those billions back to help pay for a damn sandwich.
Its not that we should ignore the plight of those less able but my god folks, this was a situation in need of an ENGINEERING SOLUTION to sub-ambulatory devices, not a wholesale remaking of our infrastructure to suit the few.
And of course that is just a visible tip of the massive iceberg of government.
Speaking of irony (and you did) I find the handle whippet a bit so. I know a whippet as a dog with its tail between its legs, a style, to your credit, not characterized in your ideas and writing!
What I want to know is where do I go in society to be in the company of the type of minds I enjoy on this site? At long last, I dont feel so all alone.
On May 27 06:52 AM User 353732 wrote:
> 1. The deficit cannot be inflated away as long as there is inflation
> indexing of benefits.
> 2. The $99 trillion is but the quantification of false promises,
> national delusions and a measure of political deception . It shows
> how vast the BIG LIE really is.The promises will not be kept, the
> delusions will dissolve and the decption will be unvelied. The governing
> elites have not only ravaged our present; they have systematically
> looted our future and dishonored all the sacrifices and heroism
> of our past. There never were the resources needed to redeem the
> promises, there are no resources today and there cannot be adequate
> resources in the future. The elites have consumed our substance.
>
On May 28 06:21 PM WAKEUP wrote:
> I learn something every day. Yesterday, for example, I learned that
> there is at least one more arrogant "know-it-all," in the world than
> I knew of, the day before. If you don't know what that means, I am
> referring to you. And, by the way, you and the guys down at the
> "biotech company" (read: your basement) where you have "worked"
> for 10 years ought to back off some of that methamphetamine crap
> you're taking, before it finishes off what's left of your minds.
>
>
> On May 28 10:59 AM thiazole wrote:
www.fundmymutualfund.c...
In the past year that has increased 55,000 per household
but other than that everything is fine, the stock market is up and therefore all is right in the world.
On May 29 10:22 AM WAKEUP wrote:
> Empathy, for what? Oh, you mean the a--holes who want to deprive
> people of earned social security benefits? No, I don't have any empathy
> for them, at all. They're nothing but a bunch of self-important,
> puffed-up bloodsuckers, who would let YOU starve, puppy-picture,
> and all, if they made a dollar by so doing.
The unfunded liabilities of the US Social Security and Medicare system stand at $99.2 trillion today. THAT would be over a lifetime!!!!!. 78 years on average of the US population. US citizens overwhelmingly have private health insurance and will continue to do so, over 80%, the other 20% unlucky fellows might in the future under a reasonable regime recieve Healthcare for the first time.
Just like every decent westernized European country!
1) Where were all of you over the past 20 years? Where was the outrage then? Politicians are ELECTED - which means we are all to blame (and anyone who didn't vote should drink a tall glass of shut the f*ck up).
2) Absent the recent reflatoin actions of the US Treasury and Fed, where exactly do you think we'd be right now? Sitting at the bottom of the abyss perhaps? And I'm sure the same folks here would be screaming about how the gov't could be so stupid as to not do anything.
3) The massive leverage and monetary velocity of the past decade served to mask the massive transfer of wealth that has taken place, but everyone was complicit,... no one wanted the gravy train to end.
4) The way out of this is, at least theoretically, simple - a) scale back social security b) nationalize healthcare c) re-instate the estate tax d) increase the top tax bracket by 10% e) raise taxes on gasoline and institute a reasonable national sales tax e) use tax incentives to drive energy indepence f) let the dollar fall to a more natural level to help exports e) cut wasteful spending. In the short term, we need to reflate till the systemic risk subsides, and then cautiously raise rates once we start to come through the other side. 4%-6% inflation for a few years would be the worst thing in the world. Ok, maybe it's not simple, but it's doable. Maybe instead of coming on here to whine, you should be writing your representatives.
I'm very cynical right now but all signs lead to ruin. People only care about poltics when they are uncomfortable. When that happens they are usually not educated enough to know black from blue.
HAS THE FEDERAL GOVT. REALLY EVER CUT SPENDING? THE ANSWER IS NO. IT WILL NEVER HAPPEN IN MY LIFETIME. Social Security and Medicare all but guareentee that. The free ride is over. The next 30 years is going to be much tougher.
So where is the trade here? Buy gold and minerals :) ?
I have no desire to starve seniors, but I also don't expect my government to wipe my ass for me when I'm old. Can you reconcile those two facts in your narrow minded, bitter little brain?
On May 30 02:28 AM stopwhining wrote:
> Whippet - your comment on Kim's last post regarding how employment
> arb replaces currency arb was one of the more interesting insights
> I've read in a while. That said, one could look at it from another
> angle - the UK can QE to save jobs (while Spain cannot) but the resulting
> inflation makes this is essentially the same as reducing all your
> employees' salaries (in real value) by 20% instead of firing 20%
> of them. For the purposes of maintaining social order, the latter
> is certainly preferred, but as any good manager can tell you, sometimes
> cutting heads is the right thing to do.
In an age where style triumphs over substance, and rhetoric over truth, these details do matter. The perception of Social Security as an ENTITLEMENT is part of the problem- words matter. I do not consider it one; I consider it a wealth redistribution Ponzi scheme. The numbers bear that out. You were taxed to redistribute to your parents/grandparents, as am I. I do not consider this to be "my money". I accept that my generation will never receive a "benefit;" I support fixing the system by 1) capping my tax rate and 2) stripping me of any future payment. I would do this so my young children will have to pay no tax when they are wage earners. A closed system like this is not a Ponzi scheme; it is a defined government liability with an end in sight.
What's your idea?
On May 30 01:43 AM WAKEUP wrote:
> "I'm in my early 30s..." Why am I not surprised, to learn this?
> When I was in MY early thirties, my age-peers at the time were grousing
> about the same things you are grousing about, now. Guess what? That's
> RIGHT, those same mavens are now drawing social security payments
> (yes, yes, yes, you are correct, in your little schoolteacherish
> tirade about my choice of terms, earlier, so-hooray for you, and
> the rest of the seventh grade.) When YOU have earned and largely
> PAID FOR (no, the G.I. Bill does not even come close to covering
> everything) two college degrees, fought in a vicious war (yes, decorated
> for combat actions), managed multiple state territories for some
> of the largest companies on this planet, and grown new businesses
> out of nothing, to the point that they are sought after by those
> same large companies referred to, above, perhaps you, too, will come
> to a point at which you expect persons with a truly sincere interest
> in a subject not to bog down into picayune nitpicking. Maybe you
> should lose the dog.
Assuming the population has an average population double today's over that time period, that makes a mere $1.5 million each. Far more affordable. ;-)
On May 27 12:55 PM carey_jim wrote:
> We need to keep looking at the facts and talking rationally because
> we are facing a massive advertising-propaganda attempt to hide the
> obvious.
>
> But all the hot air on earth wont make a 100 trillion dollar elephant
> fly.
>
> 1 trillion is a million million or,
>
> 1 followed by 12 zeroes.
>
> Therefore, 100 trillion is 1 followed by 14 zeros.
>
> 300 million Americans is 3 followed by 8 zeros.
>
> Doing the math:
>
> A $100 trillion debt represents a debt of about $3,000,000 for every
> man, woman and child in the United States.
I wish you and other right-wing terrorists would stop scaring people with lies about Social Security and Medicare.
(1) Since 1939, Social security has always been a pay-as-you go. In other words, it's always been an inter-generational transfer of wealth, from the younger to the older.
(2) This is fair, as long as no one believes your lies and thinks that we need to cut prospective benefits. (Actually, we need to raise benefits by adjusting Soc Sec Cost of LIving Index, which grossly understates inflation.)
(3) Think of all the new inventions created during merely the past 30 years. And productivity has also been exploding and soaring, partly as a result of better machinery. Thus has become and will continued to become EASIER over time to pay promised benefits.
(4) Finally, if needed, all that has to be done is to do away with the cut-off (which now is at 100,000 a year, I think--or somewhere around there). At present, those with the top 5% of income pay an effective tax rate of about 20%-25%. Raising there taxes by one or two percent won't harm either the rich or the over-all economy. The plutocrats merely will have to settle for $200 million yachts instead of $300 million dollar yachts.