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Title: Comptroller General Of The US: "We Face A Demographic Tsunami That Will Never Recede"
Source:
USA Today
URL Source: http://www.usatoday.com/news/washin ... 4-fiscal-hurricane-cover_x.htm
Published: Nov 14, 2005
Author: Richard Wolf
Post Date: 2005-11-15 13:38:21 by Uncle Bill
Keywords: Comptroller, Demographic, General
Views: 291
Comments: 32
USA Today The comptroller general of the United States is explaining over eggs how the nation's finances are going to hell. "We face a demographic tsunami" that "will never recede," David Walker tells a group of reporters. He runs through a long list of fiscal challenges, led by the imminent retirement of the baby boomers, whose promised Medicare and Social Security benefits will swamp the federal budget in coming decades. The breakfast conversation remains somber for most of an hour. Then one reporter smiles and asks, "Aren't you depressed in the morning?" Sadly, it's no laughing matter. To hear Walker, the nation's top auditor, tell it, the United States can be likened to Rome before the fall of the empire. Its financial condition is "worse than advertised," he says. It has a "broken business model." It faces deficits in its budget, its balance of payments, its savings — and its leadership. Walker's not the only one saying it. As Congress and the White House struggle to trim up to $50 billion from the federal budget over five years — just 3% of the $1.6 trillion in deficits projected for that period — budget experts say the nation soon could face its worst fiscal crisis since at least 1983, when Social Security bordered on bankruptcy. Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion — nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010, the same as the Pentagon. From the political left and right, budget watchdogs are warning of fiscal trouble: •Douglas Holtz-Eakin, director of the non-partisan Congressional Budget Office, dispassionately arms 535 members of Congress with his agency's stark projections. Barring action, he admits to being "terrified" about the budget deficit in coming decades. That's when an aging population, health care inflation and advanced medical technology will create a perfect storm of spiraling costs. •Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, sees a future of unfunded promises, trade imbalances, too few workers and too many retirees. She envisions a stock market dive, lost assets and a lower standard of living. •Kent Conrad, a Democratic senator from North Dakota, points to the nation's $7.9 trillion debt, rising by about $600 billion a year. That, he notes, is before the baby boom retires. "We're not preparing for what we all know is to come," he says. "We're all sleepwalking through this period." •Stuart Butler of the conservative Heritage Foundation projects a period from now until 2050 in which tax revenue stays stable as a share of the economy but Medicare, Medicaid and Social Security spending soars. To avoid big tax increases, he says the government has to "renegotiate" the social contracts it made with its citizens. •Alice Rivlin and Isabel Sawhill of the centrist Brookings Institution put their pessimism into a book titled Restoring Fiscal Sanity. Rivlin, who became the first director of the Congressional Budget Office in 1974, says it will take an "economic scare" such as the 1987 stock market crash to spur action. Sawhill likens the growing gulf between what the government spends and takes in to a "Category 6 fiscal hurricane." 'The Fiscal Wake-Up Tour' They are the preachers of doom and gloom. Liberals and conservatives, Democrats and Republicans, they are trying to be heard above the ka-ching of the cash register as it tallies the cost of government benefits and tax cuts, Iraq and Hurricane Katrina. To raise their profile in recent months, several have traveled together to places such as Richmond, Va., and Minneapolis for what they call a "Fiscal Wake-Up Tour." Leon Panetta, former White House budget director and chief of staff to President Clinton, calls them "disciples of balanced budgets. ... And at some point, they'll be proven right." The White House and Congress are trying to address the nation's short-term budget deficits, but their response pales against the size of the long-term problem. President Bush proposed nearly $90 billion in savings over five years in his 2006 budget. He also tried to trim future Social Security benefits for wealthier recipients. The Senate this month approved $35 billion in savings over five years. House Republicans tried to save more than $50 billion last week, but objections from moderates stalled action. Either way, the savings could be wiped out by $70 billion in proposed tax cuts. The budget-cutting effort is being led by conservatives, who recoiled when Congress quickly voted to spend $62 billion after Hurricane Katrina struck New Orleans and the Gulf Coast. "Katrina served as a wake-up call," Walker says. In prior years, facing a less imminent demographic explosion, Congress cut in politically agonizing increments of $500 billion over five years. Bush's father gave up his "no new taxes" campaign pledge in 1990. After Ross Perot focused attention on the deficit in his 1992 presidential campaign, Clinton and the Democratic-run Congress raised taxes even more in 1993. Clinton and the Republican-run Congress forced two government shutdowns before agreeing on a deficit-reduction package in 1997. In each case, cutting the deficit backfired at the polls. The elder Bush lost re-election, the Democrats lost Congress, and Republicans' obstinacy helped Clinton win a second term. "The choices you have to make are almost exactly the opposite of what wins political elections," Panetta says. The problem is also easy for Congress to postpone because the day of reckoning is years away. This year's deficit was $319 billion, down $94 billion from the year before. That's 2.6% of the nation's economy, an amount easily borrowed from foreign investors. From 'Grenada' to 'Vietnam' But there is every reason to act — and soon. Budget watchdogs cite these looming problems: •Prescription-drug coverage under Medicare takes effect Jan. 1. Its projected cost, advertised at $400 billion over 10 years when it passed in 2003, has risen to at least $720 billion. "We couldn't afford" it, Walker says of the new law. •The leading edge of the baby boom hits age 62 in 2008 and can take early retirement. The number of people covered by Social Security is expected to grow from 47 million today to 69 million in 2020. By 2030, the Congressional Budget Office projects, Social Security spending as a share of the U.S. economy will rise by 40%. •The bulk of Bush's 10-year, $1.35 trillion tax-cut program is set to expire at the end of 2010. But Congress is moving to make the reductions permanent. That would keep tax revenue at roughly 18% of the economy, where it's been for the past half-century — too low to support even current spending levels. "We can't afford to make all the tax cuts permanent," Walker says. •Baby boomers begin to reach age 65 in 2011 and go on Medicare. Of all the nation's fiscal problems, this is by far the biggest. If it grows 1% faster than the economy — a conservative estimate — Medicare would cost $2.6 trillion in 2050, after adjusting for inflation. That's the size of the entire federal budget today. "Social Security is Grenada," Holtz-Eakin says. "Medicare is Vietnam." Inaction could have these consequences, experts say: Higher interest rates. Lower wages. Shrinking pensions. Slower economic growth. A lesser standard of living. Higher taxes in the future for today's younger generation. Less savings. More consumption. Plunging stock and bond prices. Recession. Some veterans of the deficit-cutting wars are pessimistic about avoiding disaster. "In the end, CBO and others are no more than speed bumps on the highway of fiscal irresponsibility," says Robert Reischauer, former Congressional Budget Office director and now president of the non-partisan Urban Institute. 'Where's Ross Perot?' The gloom-and-doom crowd hopes to avoid that fate. Increasingly in recent months, they are traveling the country, writing and speaking out about the need to cut spending, raise taxes — or both. The most outspoken is Walker, an impeccably dressed CPA whose 15-year term as head of the Government Accountability Office runs through 2013. He was a conservative Democrat, then a moderate Republican, and is now an independent. He's also a student of history, a Son of the American Revolution who lives on Virginia property once owned by George Washington. Walker's agency churns out reports with titles such as "Human Capital: Selected Agencies Have Opportunities to Enhance Existing Succession Planning and Management Efforts." But he knows he must try to humanize the numbers, and his rhetoric on the nation's fiscal course has become more acerbic. "Anybody who says you're going to grow your way out of this problem," Walker says, "would probably not pass math." Holtz-Eakin, a soft-spoken economist who said Monday he will leave CBO at the end of the year, takes a different approach. Less prone to giving speeches, he sees his role as a consultant and truth-sayer to Congress. "Numbers are the currency of the realm in Washington," he says, and most agree his agency has the best in town. But he concedes, "Sometimes it falls to the consultant to tell the client the bad news." Holtz-Eakin's father was in steel, a cyclical business rocked by strikes and shutdowns. "I thought, 'This is nuts. No one should live like this,' " he says. That explains why he wants the government to prepare for new demands on its New Deal and Great Society benefit programs. "The baby boom has been getting older one year at a time with a striking regularity," he says. MacGuineas is the outside agitator. An independent, she worked for Sen. John McCain's presidential campaign in 2000. She respects politicians who deliver bad news, as presidential candidate Walter Mondale did in 1984 when he said tax increases were inevitable — and then was defeated in 49 states. "I want to see a presidential election where the candidates are talking about what taxes they'll raise and what spending they'll cut," she says. "It's not always a winning campaign slogan." Conrad ran for the Senate in 1986 promising to reduce the budget deficit or quit after six years. By 1992, the deficit had hit an all-time high, and he said he would not seek re-election. Only the death of North Dakota's other senator kept him in Congress. The former state tax commissioner has been doing this longer than other congressional budget officials — and he has the most charts. He's so numbers-oriented that at baseball games, he can instantly compute a hitter's average after each at-bat. "Numbers speak to me in a way that they don't speak to others," he says. "I guess it's the way my brain is wired." Sawhill and Butler, from opposite ends of the political spectrum, lead a group of about 15 budget experts at Washington think tanks who gather periodically to discuss their dour crusade. Aided by Walker and the non-partisan Concord Coalition, a fiscal watchdog group, they have taken their show on the road. Butler, a native of Britain, witnessed there in the 1960s and '70s the effects of slow growth and high unemployment, driven partly by generous government benefits. "We have a responsibility" to start the debate, he says, "because we don't have to get re-elected." But Sawhill says it's "an indictment of our political leadership that it is being left to outside groups such as ours to put these issues on the agenda." After three decades in the business, Rivlin is frustrated by lawmakers' inaction and blames balanced-budget advocates for not better articulating the problem. "There may be better ways to talk about it," she says. "I sometimes think, 'Where's Ross Perot when we need him?' "
A 'fiscal hurricane' on the horizon
By Richard Wolf
November 14, 2005
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#1. To: Uncle Bill (#0)
BUSH = NERO Death has a tendency to encourage a depressing view of war. – Donald Rumsfeld
Cripes!
Great Article on a very important subject. What I am interested in is how to position one's self to minimize the pain. The crashing market is thought to have to occur as Boomers liquidate stocks and move to fixed paying investments. Any ideas?
I think that I disagree with this assessment: the market is, and has been, so fundamentally, historically over-valued, and our dollar is so worthless, that it seems to me to be a self-correcting phenomenon. God wants the P/E ratio to be around 6 or so: not 25, 40, or 80. He really does, imo. My idea is to buy lead, silver, and gold. That and have zero debt.
Do you think that we may have just a bit of a problem in the country when the comptroller general of the United States states how the nation's finances are going to hell and says, "We face a demographic tsunami that will never recede," and the major media says nothing, the internet bloggers hardly talk about it, the print media, for the most part is silent, and Americans do not even have a clue, or care, or know what is going to happen. May God have mercy on us. And in His mercy may we hunt down these bastards responsible for it and cut their throats. Amen. "The burden of debt is as destructive to freedom as subjugation by conquest." "I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared." "No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable." Freeing the Nation from Debt "I consider the fortunes of our republic as depending in an eminent degree on the extinguishment of the public debt before we engage in any war; because that done, we shall have revenue enough to improve our country in peace and defend it in war without recurring either to new taxes or loans. But if the debt should once more be swelled to a formidable size, its entire discharge will be despaired of, and we shall be committed to the English career of debt, corruption and rottenness, closing with revolution. The discharge of public debt, therefore, is vital to the destinies of our government." "There is a measure which if not taken we are undone...It is to cease borrowing money and to pay off the national debt. If this cannot be done without dismissing the army and putting the ships out of commission, haul them up high and dry and reduce the army to the lowest point at which it was ever established. There does not exist an engine so corruptive of the government and so demoralizing of the nation as a public debt. It will bring on us more ruin at home than all the enemies from abroad against whom this army and navy are to protect us." "To preserve the independence of the people, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow- sufferers." "No earthly consideration could induce my consent to contract such a debt as England has by her wars for commerce, to reduce our citizens by taxes to such wretchedness, as that laboring sixteen of the twenty- four hours, they are still unable to afford themselves bread, or barely to earn as much oatmeal or potatoes as will keep soul and body together. And all this to feed the avidity of a few millionary merchants and to keep up one thousand ships of war for the protection of their commercial speculations." "Our distance from the wars of Europe, and our disposition to take no part in them, will, we hope, enable us to keep clear of the debts which they occasion to other powers." No Mention of Fiscal Gap Estimated As High as $72 Trillion - It's All Over Lessons in how to make $43 trillion disappear HOW BIG IS THE GOVERNMENT'S DEBT? - $33.1 trillion+ $3,400,000,000,000 Of Taxpayers' Money Is Missing THE WAR ON WASTE - Rumsfeld Says 2.3 Trillion Dollars Missing The Baby Boomer's Retirement Bubble Is About to Burst? - CNSNews
From Workforce Management: Behind the Wal-Mart Memo Our health care system is at a crossroads, and it is hard to see how Corporate America can continue to foot so much of the bill. By John Hollon nly in America can a company be vilified for having the temerity to suggest that it would be a good thing if it hired healthy workers. But that’s what happens if the company in question is Wal-Mart, and when the point about healthier employees is just one suggestion in a larger discussion about how the company can cut rising employee benefit costs. It’s easy to beat up on Wal-Mart because it is big and successful, and has gotten that way in large part because of its hard-nosed business practices. As philosopher and basketball legend Wilt Chamberlain once observed, "Nobody roots for Goliath." Yes, sometimes it is hard to root for a giant like Wal-Mart, the biggest retailer on the planet, with $285 billion in annual revenue. One thing about having big revenue, however, is that operating costs are equally big. For example, Wal-Mart recently said that its operating costs in the second quarter rose 0.3 percent. That doesn’t sound like much until you realize that for Wal-Mart, a 0.3 percent increase translates into $230 million in additional operating costs. Hiring healthier workers is just one suggestion being offered by Susan Chambers, Wal-Mart’s executive vice president for risk management and benefits administration, in her well- publicized memo to the company’s board of directors on how to hold down the growing cost of employee benefits. If you haven’t read the entire memo, you should. The document (in two slightly different versions) is available online at http://WalMartWatch.com and on The New York Times’ Web site, as well as on Wal-Mart’s own site. It is a fascinating look into how even a company as large and successful as Wal-Mart struggles to control benefit costs. This is starting to sound like a broken record. Companies everywhere, from Delphi to Delta Airlines, are filing for bankruptcy, discarding pensions and paring benefits in a desperate attempt to try to keep costs down and remain more competitive. Some might pooh-pooh this notion as it applies to Wal-Mart, but if you manage a workforce and are concerned about the cost of benefits, it is sobering to read Chambers’ memo. At one point she says: "From 2002 to 2005, (Wal-Mart’s) benefit costs grew significantly faster than sales, rising from 1.5 percent of sales to 1.9 percent. Benefits spending grew from $2.8 billion to $4.2 billion during this period, at a rate of 15 percent per year. … A few benefits made up the bulk of this increase: health care ($1.5 billion) grew by 19 percent, paid time off ($1.4 billion) grew by 14 percent, and profit-sharing and the 401(k) program ($740 million) grew by 13 percent." And she adds: "Growth in benefits costs is unacceptable (15 percent per year). … Unabated, benefit costs could consume an incremental 12 percent of our profits in 2011,"equal to $39 billion to $35 billion in market capitalization. Wal-Mart’s efforts capture the struggle that all of Corporate America is having in trying to control fast-growing health and benefit costs. And the most frightening statistic in Chambers’ memo is this: Only 48 percent of all Wal-Mart employees are covered by the company health plan. That compares with 68 percent of employees who are covered by a health plan at similar national employers. If Wal-Mart even approached that percentage of health care coverage for its workforce, the huge costs highlighted in the Wal-Mart memo would be astronomical. "These are indications of the gaps in the health care system that are exposed by Wal-Mart," Len Nichols, a health economist at the New America Foundation, told The New York Times. "You can’t blame Wal-Mart." Nichols may be right. Wal-Mart is simply an indicator of a larger problem. Our health care system is at a crossroads, and it is hard to see how Corporate America can continue to foot so much of the bill. Workforce Management, November 7, 2005, p. 58 -- Subscribe Now! ............ Well it seems that people who are employed will be seeing their paychecks shrink.. for many reasons one being that employers will no longer 'foot the bill' for healthcare costs.. And that will include retirement plans..
"No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
Do not save green pieces of paper and don't invest in financial instruments (stocks, bonds or investments) Buy tangible items....guns/gold/land Silver is supposed to be a good buy due to the limited supply (less actual tons of silver than gold) and it's increasing use in electronics and elsewhere. Also, don't forget boats...great investment ;)
"Unthinking respect for authority is the greatest enemy of truth." - Albert Einstein
I have in front of me a 1954 Blue Cross health insurance policy, it's tax- exempt and free from the provisions of insurance statutes. The plan required free choice of physician. The plan offered medical and surgical benefits for hospitalized members, and also covered visits to doctors' offices. It was offered to employee groups for the fee of $1.70 per month. Then the government came "to help". Screw "progress." Let's go backwards.
Good lord.. taking inflation into consideration, what would it be if just based on inflation?
"No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
Let's assume the baby boomers (like myself) succeed. At the age of 40 last summer I liquidated all my stocks and moved into fixed investments (short-term government bills, notes, bonds), physical gold and silver (treating me quite well so far), and continue moving into inflation protected (somewhat anyway) I-Bonds. Who is going to pay all that interest on the fixed paying investments to keep all of us happy? Just thought I'd offer yet another scary thought. I'd suggest buying the things you know you will need someday right now. I just bought a lot of t-shirts that I don't really need yet. Here's my thinking. China and India are not going to be able to make them much cheaper without sacrificing quality. What can they do at this point? Outsource the labor? That being said, I wouldn't be a buyer of high end apparel expecting it to hold its value. It will be next on the list of things for them to manufacture (especially since we now have textile quotas in place). Silver and gold have been on a tear lately. However, you can still buy them at a cheaper price than you could 25 years ago. Further, about the only way the government can pull more silver out of our coins is to do it on paper, using some sort of CPI hedonic adjustment, lol. Let's not forget China and India have a fondness for the metals. They do remember what it is like to have an untrustworthy currency. 20 years of economic prosperity was horrible for silver and gold but was great for stocks and bonds. What do you suppose the reverse would do? Keeps smelling like the early innings of a 1970s game to me. In the 1970s energy problems were political. What if they are geological this time around? What if we enter a 1970s style era but can't pull out of it? I wouldn't be quick to short the stock market. The 1970s were horrible but had one shorted in 1970 and covered in 1980 one would have seen the pain that shorting heavy inflation can be. Although the markets did not rise, they didn't fall either. Longs were screwed. Shorts were not only screwed, but had to pay dividend payments to the longs. It was a lose-lose situation. The people that best survived it were the ones simply looking for wealth preservation and safety. If you believe we live in an "overleveraged society", perhaps it is best to avoid leverage. Picture an ounce of silver. It is cheaper than a movie ticket to us. However, there is a factory worker in China working a long day to be able to buy it (or more if he wishes to eat too). Someday that guy in China might be us. What makes us so special except for our ability to spend? Wouldn't it be nice to spend an ounce of silver to not have to work that long day if push comes to shove? And if push comes to shove, I'd rather have silver in my hand than paper money in the face of a "demographic tsunami that will never recede". That just does not sound like a good scenario for having all of one's wealth stored in paper. Not hard to see what 10% interest earned in a 10% inflationary world would do to your savings in the form of taxes. You'd get 10%, but lose 3% in taxes, leaving you in the hole by 3% a year. Not saying it will happen, but it could. Just my opinions of course. Who knows? As for the t-shirts, I won't be crying if I'm wrong and prices do continue to drop in the face of inflation. I'll just be scratching my head a bit though, but I usually am these days so what's new?
When prosperity comes, do not use all of it. - Confucious What cost $1.70 in 1954 would cost $11.74 in 2005.
Good lord.. taking inflation into consideration, what would it be if just based on inflation prolly around $15.00
Sad to say you're probably right!
"No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
Whether you or tom007 are correct.. we're gettng majorly screwed.. sigh.. so many people are insurance and medical bill poor.
"No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
Don't forget toilet paper, feminine products, etc. What we take for granted everday, may not always be available to us...also aspirin, minerals, and vitamins - everything that we can drive to a store today and purchase with ease, may no longer on the shelves.
What we take for granted everday, may not always be available to us...also aspirin, minerals, and vitamins - everything that we can drive to a store today and purchase with ease, may no longer on the shelves. Costco October same-store sales up Pasta, beans, rice, toilet paper, paper towels, dishwashing detergent, laundry detergent, garbage bags, and the list goes on and on. I guess we're not the only ones thinking that way. Costco has become a wealth preserving strategy to me. Doh!
When prosperity comes, do not use all of it. - Confucious
Whether you or tom007 are correct.. we're gettng majorly screwed.. Sounds like esso looked it up in an inflation calculator. I SWAG'ed it.
Thanks.. What cost $1.70 in 1954 would cost $11.74 in 2005. Also, if you were to buy exactly the same products in 2005 and 1954, they would cost you $1.70 and $0.25 respectively.
"No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
The funny thing about inflation calculators are that they don't necessarily account for inflation, lol. If the government printed up $100 trillion in cash and then dropped it from helicopters when would the inflation hit us? When they printed it? When they dropped it? Nah, that's not how it works according to our government. It might never hit us. What if it was all found up by an investor and he spent it on US treasuries, stocks, and housing? We'd all be so thankful that inflation never appeared. We could use cash out refinancing on our unprecedented housing appreciation. We'd see interest rates falling as more money poured into bonds. We'd see any stocks we own go up in price big time. We'd be so thankful that the economic prosperity is here to last we'd probably want to make Greenspan a king. What if it was found by a consumer though? Oh my, inflation would run rampant. Damn, he bought food and energy! Doh! What's left for me to buy with my measely $100!!! What if everyone found it? Stocks would go up! Bonds would go up! Housing would go up! Oil would go up! Silver would go up! Gold would go up! I'm telling you, it is a win-win for everybody! Well, until some people started to realize what really happened anyway. Isn't that odd. That's kind of what we have now. I better go into my backyard and just wait. I'm picturing Helicopter Ben Bernanke will be flying along soon with even more obvious shipments of paper prosperity.
When prosperity comes, do not use all of it. - Confucious Yes, lets cut spending and raise taxes so we can "attempt" to pay the criminals that make up the Federal Reserve their ill gotten loot. You might as well spend your dollars today, they soon won't be worth the paper they are printed on. Saving dollars is worth less than saving shit.
God is always good! "the criminals that make up the Federal Reserve" Shadow Government of the United States and the Decline of America Somebody has to pay for their modest possessions.
Thanks for the links. The people truly are dying from a lack of knowledge of the truth. Ignorance can be deadly and enslaving.
God is always good! that is a great link to the McFadden speech
they're trying to convince us that we must cut benefits for social security, medicare and other social spending. and all over the nation there is propaganda today on the front pages of newspapers to this end. But here's a fact they don't tell you - for all the money collected by the payroll tax that used to be dedicated to paying for social security - only 75% of that money is actually spent on social security or medicare. The other 25% of the money is taken and put into the general revenue pile. Meaning it is spent on the bureaucracy and the war. Rather than on social security. If they used 100% of the money collected through the payroll tax for what that tax was originally intended for - social security & medicare, then we'd have no problem whatsoever making payments to these people. Keep in mind they've been taking from this fund for almost 20 years. If they had instead invested this money, then think how much would be available. Instead it is squandered by politicians who spend freely. and they say the only possible answer is to cut benefits & raise taxes.
The following excerpt is from the 1998 Senate Budget Committee session. Note the underlined portions. BEGIN EXCERPT U.S. FEDERAL RESERVE BOARD CHAIRMAN ALAN GREENSPAN: .....making sure that surplus is there. U.S. SENATOR ERNEST F. HOLLINGS (D-SC): Yeah, making sure that surplus is there. I'm telling you, Dr. Greenspan, that's music to my ears. GREENSPAN: Well, I remember you taking this song a long way over recent years, and I must say, Senator, a number of us were skeptical that was even discussable, figuring we would never get to unified surplus that we said which you were preaching was very interesting, scientifically sound, but unrealistic. I apologize. HOLLINGS: Well that's all right, because your Greenspan Commission report in section 21 says just exactly what you're saying here. That was in 1983; here now, in 1999, on page two, "simply put, enough resources must be set aside over a lifetime of work to fund retirement consumption." Now that section 21 said set it aside. President Bush, in section 13 3 01 on November the 5th, 1990 signed that into law. And we making headway. Let's understand, though, that we're still running deficits. 'Cause I'm not going along with this monkeyshine about unified. 'Cause unified is not net, the debt still goes up, is that correct? GREENSPAN: If you're...it depends on whether or not you wish to create the savings... HOLLINGS: I'm not asking what you're trying to create. The simple fact is the debt has been going up at least $100 billion for the last several years. GREENSPAN: Outside, on budget, that is correct. HOLLINGS: That's right, on budget, you're spending a hundred billion more than you're taking in. GREENSPAN: Correct. HOLLINGS: And this president's budget spends another hundred billion more than we take in. GREENSPAN: I haven't seen it yet. HOLLINGS: You haven't seen it? You're testifying about it now. GREENSPAN: I haven't seen the budget. You haven't seen it either. HOLLINGS: Well, you know his plan. Look you think he's going to spend less than a hundred billion more? GREENSPAN: I will wait to see what the numbers look like. HOLLINGS: Well, the truth is...ah, shoot, well, we all know there's Washington's math problem. Alan Sloan in this past week's Newsweek says he spends 150%. What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in. That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It's projected to have this year a 117 million surplus. I've got the schedule, I'll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem, we planned against that baby boomer problem. Our problem is we've been spending that particular reserve, that set-aside that you testify to that is so necessary. That's what I'm trying to get this government back to reality, if we can do that. We owe Social Security 736 billion right this minute. If we saved 117 billion, we could pay that debt down, and have the wonderful effect on the capital markets and savings rate. Isn't that correct? Thank you very much, Sir. Thank you, Mr. Chairman. END EXCERPT
The crashing market is thought to have to occur as Boomers liquidate stocks and move to fixed paying investments. Any ideas? Well for starters I think you can forget about seeing any meaningful money from Social Security and Medicare--I don't think that's a new concept to anyone here. I expect the feds to play accounting games like inflating the currency, rather than just saying "we give up" or "we can't pay you what we promised". Being honest and prudent doesn't fill the ballot box. I expect the lies to increase in number and shrillness until the whole system goes down like Flight 93. Given that the average American's actual tax rate from all sources is about 50% right now, I don't expect any huge tax increases. There's a limit to how much straw the camel can carry, and we're very close to that limit right now. I also don't expect anything in the way of spending cuts until at least 2009, if then. I'd say the key thing to keep in mind is that you want to be liquid enough so you can swoop down on the plethora of deals that are sure to come your way when the sad sacks start losing it. Fact: There are always going to be people richer than you who need to buy stuff. Fact: There are always going to be people poorer than you who need to sell stuff. Fact: If a guy knows the right place to sell the rich people the stuff he bought from the sad sacks, then he can make some phenomenal returns on his money and render gov't money policy more or less irrelevant. So like someone else said, we're looking at short-term deals in tangible goods. Ideally, you'd want to trade in things which don't depreciate, or which you've bought cheap enough so that there's no real way you'll lose value due to depreciation. You could deal in cars, precious metals, used jewelry bought "for scrap", real estate, guns, or a thousand other things. Nothing wrong with buying gold or silver bullion as long as you get it "bought right". Bought right, IMHO, means $325 or less for gold and maybe $4.25 or less for silver. I would definitely NOT "buy and hold" PMs at this time. If you can get 'em bought right, turn right around and sell 'em for profit, then reinvest your profits. I would definitely learn how to trade commodities, since the contracts are backed by tangible goods, and the profit potential is just mindblowing. I wouldn't worry about paying off debt--inflation is the debtor's friend, as you borrow valuable dollars and pay back worthless ones. That is, as long as you take out debt to buy things that APpreciate in value, rather than things like vacations and a new plasma TV. I would stay away from savings accounts and whatnot denominated in greenbacks. Dollar devaluation aside, there's just nobody out there right now offering guaranteed returns that will even keep up to inflation. Perhaps a currency from a country more fiscally prudent, like the Swiss Franc, would appeal to you. You can trade the Swiss Franc on the currency markets, or you can open up one of a number of overseas bank accounts denominated in the Franc. You're in the liquor business, which I've got to think would be largely recession proof, so that's not bad. Pretty lousy markup, though, compared to what a good bottom feeder can make. I imagine you'll want to stick with what you know until such time as you can make better profits doing something else. If I wanted to be in the ultimate recession proof business, I think I'd start a junkyard. Those guys make money six ways from Sunday.
Spoon!
I've said this a billion times. Boomers are the deathknell of America, and Freedom As soon as they can cash out, they will, and not only leave a huge mess for my generation, BUT... BE DEMANDING MORE AND MORE OF OUR TAX DOLLARS TO SUBSIDIZE THEIR ASSES. So not only have boomers worked diligently to make sure America isn't America for My generation, they will deliberately fuck my generation out of every damned dollar they can get, because after all, they're old, and they need medicine and social security, and aren't willing to pay their own fucking way. Now this isn't a condemnation of all boomers, just the fucking liberal boomers who have destroyed what freedom we've had in this country.
To hear Walker, the nation's top auditor, tell it, the United States can be likened to Rome before the fall of the empire. Its financial condition is "worse than advertised," he says. It has a "broken business model." It faces deficits in its budget, its balance of payments, its savings — and its leadership.
#2. To: Uncle Bill (#0)
Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion — nearly $38,000 for every man, woman and child.
#3. To: Uncle Bill, arete, arator, tommythemadartist, robin, diana, indrid cold (#0)
#4. To: tom007 (#3)
The crashing market is thought to have to occur as Boomers liquidate stocks and move to fixed paying investments.
#5. To: Fred Mertz (#2)
Benjamin Franklin
Thomas Jefferson - letter to William Plumer, July 21, 1816.
George Washington, Message to the House of Representatives, December 3, 1793.
Thomas Jefferson to Albert Gallatin, 1809. FE 9:264.
Thomas Jefferson to Nathaniel Macon, 1821. (*) FE 10:193.
Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39.
Thomas Jefferson to William H. Crawford, 1816. ME 15:29.
Thomas Jefferson to C. W. F. Dumas, 1790. ME 8:47.
#6. To: Uncle Bill (#5)
#7. To: tom007 (#3)
Great Article on a very important subject. What I am interested in is how to position one's self to minimize the pain.
#8. To: Zipporah (#6)
#9. To: Uncle Bill (#8)
It was offered to employee groups for the fee of $1.70 per month.
#10. To: tom007 (#3)
The crashing market is thought to have to occur as Boomers liquidate stocks and move to fixed paying investments.
The nation is prosperous on the whole, but how much prosperity is there in a hole? - Will Rogers
There are 9,000 hedge funds out there. There aren't that many smart people in the world. - Michael Driscoll, a trader at Bear Stearns & Co. in New York
Some days you just want to pull out the Bonehead Stick and beat people senseless. - mirage
#11. To: Zipporah (#9)
Good lord.. taking inflation into consideration, what would it be if just based on inflation?
#12. To: Zipporah (#9)
was offered to employee groups for the fee of $1.70 per month.
#13. To: tom007 (#12)
prolly around $15.00
#14. To: Esso (#11)
What cost $1.70 in 1954 would cost $11.74 in 2005.
#15. To: markm0722 (#10)
#16. To: lodwick (#15)
Don't forget toilet paper, feminine products, etc.
CHICAGO (Reuters) - Costco Wholesale Corp. (NasdaqNM:COST - News) on Thursday said worldwide sales rose 10 percent in October at stores open at least a year, helped by strong demand for food and pricey gasoline.
The nation is prosperous on the whole, but how much prosperity is there in a hole? - Will Rogers
There are 9,000 hedge funds out there. There aren't that many smart people in the world. - Michael Driscoll, a trader at Bear Stearns & Co. in New York
Some days you just want to pull out the Bonehead Stick and beat people senseless. - mirage
#17. To: Zipporah (#6)
My son will make a good president some day
#18. To: Zipporah (#14)
What cost $1.70 in 1954 would cost $11.74 in 2005.
#19. To: tom007, Zipporah (#18)
#20. To: Esso (#19)
#21. To: tom007 (#18)
Sounds like esso looked it up in an inflation calculator. I SWAG'ed it.
The nation is prosperous on the whole, but how much prosperity is there in a hole? - Will Rogers
There are 9,000 hedge funds out there. There aren't that many smart people in the world. - Michael Driscoll, a trader at Bear Stearns & Co. in New York
Some days you just want to pull out the Bonehead Stick and beat people senseless. - mirage
#22. To: Uncle Bill (#0)
The gloom-and-doom crowd hopes to avoid that fate. Increasingly in recent months, they are traveling the country, writing and speaking out about the need to cut spending, raise taxes — or both.
"It was an interesting day." - President Bush, recalling 9/11 [White House, 1/5/02]
#23. To: RickyJ (#22)
#24. To: Uncle Bill (#23)
"It was an interesting day." - President Bush, recalling 9/11 [White House, 1/5/02]
#25. To: Uncle Bill (#23)
#26. To: Uncle Bill (#0)
#27. To: Red Jones (#26)
#28. To: tom007, lodwick, timetobuildaboat (#3)
What I am interested in is how to position one's self to minimize the pain.
#29. To: tom007 (#3)
 | So many morons, so few bullets. |
#30. To: OKCSubmariner (#29)
BTTT
#31. To: RickyJ (#24)
BTTT
#32. To: RickyJ (#31)
BTTT
Press 1 for English, Press 2 for English, Press 3 for deportation
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