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Treasury Flooded Consumers With Money In December, Just In Time To Unleash Holiday Shopping "Animal Spirits"
When you have your back against the wall, and the only thing at your disposal is the Fed's money printer on loan, what do you do? Well, if you are the Treasury, you let money rain. Literally. In December, according to the Financial Management Service, the US Treasury dispensed a stunning 69.5% more in Social Security Outlays and Unemployment Insurance on a year over year basis: the administration knew all too well it could not afford to let this holiday season go to waste. So, after averaging at $43.6 billion in monthly outlays, Social Security withdrawals from the UST surged by a unprecedented 48.6% in December to a whopping $69.5 billion. This is not a volatile or seasonal series.
Combine the previously discussed abnormal spike in unemployment insurance, and you get the following chart:
On a month-over-month percentage change basis, the combined December number is stunning: a 69.5% increase in Treasury spending to boost consumption no matter what the price.
So when everyone is discussing the amazing holiday retail season (which wasn't really that amazing, and was just a little over a 1% improvement compared to last year), will anyone take the time to normalize for monthly "stimuli" in the form of excess SSN and Unemployment payments? We didn't think so. We are confident that were someone to do that, it would disclose yet another insidious way in which the US Government is directly and indirectly subsidizing the economy, in an ever more failed attempt to boost consumer confidence of the ever more defunct American middle class.
h/t Mike
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OK, there really should be an investigation into this. Don't call me naive. This is Nixonian.
Former US Comptroller David Walker preaching fiscal sense on CNBC this morning, 6 minute video
http://www.fundmymutualfund.com/2010/01/david-walker-cnbc-january-2010-v...
Certainly we can expect him to be ignored for the 14th year running...
Walker is like a lone voice of sanity.
This is benign folks. See my posts below for more detail. There is no Jan 2010 SS payment to pre-1997 retirees because they were paid on 12/31/09. The reason? 01/03/10 (the normal payment date) was on a Sunday, so the next prior Business Day was 12/31/09.
That makes 2 payments for Dec 09, causing the bump
Next scheduled payment is 02/03/10.
See http://www.socialsecurity.gov/pubs/2009calendar.htm
I can appreciate where you're going with this, but would an extra payment for pre-97 recipients account for a bump equivalent to half of average monthly disbursements? I can see where an extra payment might answer some of the question but I doubt pre-97 folks comprise that much of the outlay.
Note that in the link you provide (thanks) October had six disbursements just like December and barely a blip was registered. Granted that additional payment was not for pre-97ers, but highlights the question of exactly how much of the monthly disbursements (percentage basis) these folks typically receive.
Thanks for the link.
Actually, it would make the difference. The pre-97 (1x per month, usually) disbursement is about $22B. The post-97 disbursements are staggered weekly and are about $8B each. So an extra pre-97 disbursement would have an impact much more than an extra weekly disbursement.
I built a spreadsheet daily back to beginning of October, but I don't think I can post it.
I'll try to copy here
Th 1-Oct $ 229 F 2-Oct $ 22,211 M 5-Oct $ 36 T 6-Oct $ 38 W 7-Oct $ 69 Th 8-Oct $ 60 F 9-Oct $ 60 T 13-Oct $ 63 W 14-Oct $ 7,850 Th 15-Oct $ 43 F 16-Oct $ 44 M 19-Oct $ 46 T 20-Oct $ 52 W 21-Oct $ 7,754 Th 22-Oct $ 59 F 23-Oct $ 43 M 26-Oct $ 60 T 27-Oct $ 71 W 28-Oct $ 7,902 Th 29-Oct $ 4 F 30-Oct $ 56 M 2-Nov $ 214 T 3-Nov $ 22,207 W 4-Nov $ 76 Th 5-Nov $ 38 F 6-Nov $ 58 M 9-Nov $ 58 T 10-Nov $ 7,923 Th 12-Nov $ 76 F 13-Nov $ 36 M 16-Nov $ 55 T 17-Nov $ 60 W 18-Nov $ 7,798 Th 19-Nov $ 52 F 20-Nov $ 40 M 23-Nov $ 48 T 24-Nov $ 29 W 25-Nov $ 7,940 F 27-Nov $ 5 M 30-Nov $ 15 T 1-Dec $ 223 W 2-Dec $ 46 Th 3-Dec $ 22,271 F 4-Dec $ 45 M 7-Dec $ 20 T 8-Dec $ 42 W 9-Dec $ 8,132 Th 10-Dec $ 47 F 11-Dec $ 41 M 14-Dec $ 46 T 15-Dec $ 41 W 16-Dec $ 8,015 Th 17-Dec $ 51 F 18-Dec $ 35 M 21-Dec $ 52 T 22-Dec $ 111 W 23-Dec $ 8,169 Th 24-Dec $ (2) M 28-Dec $ 22 T 29-Dec $ 5 W 30-Dec $ 9 Th 31-Dec $ 22,032
Excellent work. I stand corrected. Thank you for the follow up, anonymouse.
This is indeed the case. It applied to everyone on disability as well. Two SS checks in December. Simple as that due to the holiday. And it did not pump up any holiday sales since the payment was on the 29th.
It did not apply to all on disability as well. Most likely applied on a proportional basis. However, if this is truly the case, then would it not be that the January numbers would show a reduced outflow, when corrected for number of recipients?
why didn't the guy who shot up the federal building in vegas get some of this action?
Damn right!
We have some elderly and others on SS in the area, THEY didnt see &^%$ either. Hell, they even trumpeted the lack of inflation and SAVED not having to pay Cost of Living Increases for the new year to SS people.
Show us the money, save the bullshit.
The only thing I can think of is suddenly they took on MORE people to SS. Is it from Aging 62 years of age or what?
Oh poor me, I cannot get job as greeter, now I retire early. That's it! Yes... that is what is happening.
/sarcasm.
Is this more along the lines of the zombie zip codes getting "jobs" things? Because obviously the people are not getting cash. So take the difference between that and normal and look for where that cash went?
Whats the deal?
I wonder what portion of total gross income is supplied by Uncle Sam these days.
I would bet 55-60%
see Rosenberg yesterday or the day before. Its 20% which is still an all time high.
I don't get it. Who got this money? I don't think seniors got a big "pay" increase nor did the unemployed so who did this money get paid to? The charts are impressive but they don't tell us where the money actually went.
I'm with you.....how did the money get into the system? Was the increase from unemployment extensions?
I talked to a friend of mine last week who told me he received a phone call from the unemployment office, telling him an additional 10 weeks of gov't cheese had recently been added (he had previously run out of regular and extension benefits). After some wrangling, they agreed to pay him retroactively for three weeks, so he got 3 weekly benefit checks around the end of Dec.
Don't know if this is system wide, but could be a partial explanation...
Me too. More facts are required here to flesh out the real story. Did the number of people on Social Security surge (unlikely) or did they send out Christmas bonuses to everyone (unlikely)?
If Christmas bonuses were sent out, my mother-in-law didn't get one and neither did her neighbors. However, each of them did get the letter informing them of no COLA increase for 2010.
I was wondering that too. Surely people who are logged on just get a regular payment - how can the Govn just post more $$$s to people?
We need an FOIA request...is money is being stolen by governmnet insiders? What are the other possibilities? Funnelling money to favored groups? Is this why Andy Stern has near permanent residence in the Whitehouse?
What the hell is going here?
Am I in the wrong movie or what ? I start really to get angry and perhaps I should stop work like an idiot and wait til "Helicopter Ben" flies over my house !
Simply amazing !
Regardless of the explanations or rationalizations that will be used to explain these huge disbursements, they will be overshadowed by the very large "Mission Accomplished" banner flying during the state of the union address.
It's all about confidence and the powers that be know that the bottom line is public perception. If the consumer doesn't start spending real soon, the jig is up and we're all in deep trouble. Ironically if the consumer does start spending, we're still in big trouble. But it gets kicked down the road a few more years, which suits the suits just fine.
Extend and pretend is the new pledge of allegiance.
For any deflationists/collapsitarians who want to win the battle against the confidence-mongers to influence the mood of the general public, the phrase "extend and pretend" is probably your best weapon: catchy and easily explained. Go get 'em: http://www.google.com/trends?q=%22extend+and+pretend%22 !
Which consumer?
Do you mean the wealthy one buying new houses and then trying to flip them or rent them for 1/60th the purchase price per month?
Or the poor one picking up their groceries at the local food bank?
I have a hard time believing that they are that imaginative and calculating that they can anticipate every angle and outcome in order to maintain the false perception. I appreciate your out of the box thinking, but at some point, they have got to either get tangled up in their web of lies or the official narrative becomes so disconnected from reality that the lights will go on for even the most trusting of folks, and it's game over. It will be interesting to see if the end will be a sudden GOTCHA moment, or a slow unravelling of truth that will be widely understood long before any dramatic change occurs.
Well done.
It will be interesting to see if the end will be a sudden GOTCHA moment, or a slow unravelling of truth that will be widely understood long before any dramatic change occurs.
The masses don't care about the truth....they are more than happy with cash, that's why it won't stop and more handouts will equal more demand for more handouts.
Yep. The truth is lying around in plain sight. There's just too much good programming on TV. Not to mention yammering with mom/co-workers/pestering the spouse about every little detail of their insignificant lives.
Yep. 24 starts next week. So, that will cause some action before the SOTU.
I'm not sure I understand your comment. I was simply saying that extend and pretend is the name of the game and that this will end badly, either sooner or later. There is certainly room for disagreement on that front but what is it exactly that the government and Fed are doing if not extending and pretending?
Do you think there will be no consequences for the fraud, moral hazard and money creation/pumping that's going on? Do you think the Fed will successfully drain all this excess liquidity from the system? Do you think we can go back to where we were 5 years ago? I'm not being sarcastic. I really do want to know what you think is going on if not extend and pretend? I'm open to your ideas. In fact, I wish there was a way out and I'll listen to anyone who can explain to me how this will happen, other than pure hope.
BTW, the average person is beginning to awaken. Only instead of bringing out the pitch forks and rope, they're coming to the understanding that their retirements and general standard of living is dependent upon the system "recovering" or at least returning to where it was a few years ago. It is slowly dawning on them that they are captured by the system. And they hope this recovery will happen. I call this a false hope and I've said before that false hope binds us to impossible situations. Many people are aware to some degree of what's going on and their response is to not rock the boat, regardless of how outrageous or immoral it becomes.
They/we are doing the basic calculation of denial. If the system fails, I'm in big trouble. If the system limps along, I have a few more years of breathing room to enable me to "get out" or "get back to even" whatever that means. I've heard those words used often over the past year. The capacity for self deception by Joe 6 pack is breathtaking. I talk to clients and non clients all the time. I'm curious as to what people are thinking and I talk to strangers in checkout lines and at church, on the train and in the supermarket. People are actually very willing to talk.
What I'm hearing is that the average Joe understands things are very bad. And while they want to believe what they're being told, that things are getting better, their personal experience tells them otherwise. In particular, the people over 40 recognize that each time we "recover" from a recession, they personally come out of it not quite as well as they thought they would. Their income doesn't go as far, they're deeper in debt, their children are struggling. So while the TV and papers might declare everything is finally better after each recession, they don't see it that way. And they feel in their bones that this time will be much worse than any time in their lifetime. And it frightens them to the core.
I find many people on ZH project their views, understanding and emotional stability upon the general public. We all have a tendency to do this (including myself) and I believe this is a mistake. This is why I talk to many people rather than assume I know what's going on. The average person allows them self to believe whatever they want to believe in order to do nothing. To them, doing nothing is the safest thing to do. They feel their response is a rational response and I would be hard pressed to argue otherwise, considering everyone feels isolated and powerless. But that doesn't mean they aren't going down with the ship.
Best damn post I've seen from you yet man. Good job.
I'm curious as to what people are thinking and I talk to strangers in checkout lines and at church, on the train and in the supermarket. People are actually very willing to talk. . . . In particular, the people over 40 recognize that each time we "recover" from a recession, they personally come out of it not quite as well as they thought they would.
As a soon-to-be 44-yearold, all I can say is well put.
How are you today?
Just waiting for the economy to finally crash so I can get on with my life.
nice one!! That will be my standard answer until further notice...
So glad I chose to voluntarily simplify a few years ago, that i could admit and consider the very real possibilities of where things could/would go and got mentally/emotionally over it (mostly...lol..still catch myself pining for summers and hunting season at my grandparents cabin occasionally...) and thought through, with lots of help from websites such as ZH, what actions to take.
I wasn't challenging your thesis. I agree with you for the most part. I have detected from your posts that you feel that this extend and pretend can go longer than most of us would like it to. I was pointing out that TPTB have their limits. I have no doubt that they are manipulating the data stream to encourage confidence. The question I have is how long they can keep this charade going without losing all credibility with the masses and then how will they react? Lies have a tendency to compound and the further reality deviates from the perception they are attempting to project, the more distorted and bold the lies need to be.
I think we agree that many people are waking up and have a natural distrust of the government, more so than ever before. People aren't that dumb. And they probably don't care that much so long as their lives aren't negatively impacted. They are comfortable being bought off. But this has got to end. I keep trying to think out scenarios how this all unwinds. I'm conflicted. I want to believe that nothing drastic occurs and somehow life manages to plod along without an extreme breaking point. Yet my head can't wrap around all the facts that are presented here and imagine how it could possibly do that and I want this Ponzi to end.
But this has got to end. I keep trying to think out scenarios how this all unwinds.
Agreed. Hint: Ponzi schemes do not end prettily. Government Ponzi schemes probably do not end peacefully.
Thank you for your thoughtful response. I'm actually working on an article for ZH that will hopefully address (actually I have no solutions, just a spotlight) what you're talking about. The problem I've run into is that each time I look further down the rabbit hole, the bigger it gets.
I've decided this morning to break the article into separate pieces to be more easily digestible. It will also allow me to screw up my courage because a lot that I will talk about will rub some people the wrong way.
One conclusion I'm coming to is that the psychopaths who are destroying our world don't exist in a vacuum. They can't exist without being enabled by the general population. The problem, while clearly the psychopaths, is ultimately us for allowing the psychopaths to operate. This is not what many people wish to hear. We do not live in an age of personal responsibility.
The Discourse of Voluntary Servitude, Etienne de la Boite
It's an old work.
Thanks for the reference. Available online here:
http://www.constitution.org/la_boetie/serv_vol.htm
The question I have is how long they can keep this charade going without losing all credibility with the masses and then how will they react?
I am often confronted with the same questions like you. This ponzi scheme can keep going for a while , I would guess 2 - 3 years. BUT : you can be sure that few if nobody of the jerks who are currently destryoing economies with unpredictable issues will still be in place at this moment. I bet with you that in 2 years, Zimbabwe Ben, Tini Tim , his majesty L.Summers will be somewhere on a sunny beach with millions in their pocket. Or did you see only one of the many banksters go only 1 day to jail last year ?
See the Sunk Costs fallacy
h/t Mike is bringing the goods.
my UI check is in there
Did we get a raise ?
Negative.
In fact, since some of us qualified for EB it caused the disbursing state to roll back initial claim period from 30 to 26 weeks. Some more of us who did 2 weeks of temporary work in a state other than the disbursing state have now been informed that, to make the switch to EB, we must first apply for UI benefits from the state in which we did the temp work.
Then once we have our disqualification letter in hand, we can return to the disbursing state with the letter to be moved onto EB retroactive to the exhaustion date of initial benefit.
Welcome to the Twilight Zone!
Someone before asked where the money went... That's the real question alright. Obviously we didn't get it in the market, and well nobody bought homes with it.
I do have to say I'm amazed at the intense rapidity of these "inflationary" treasury posts flooding the front page.
I think we're getting closer to the truth, but not in the way that our banking overlords would like.
Social Security will go in the red in 2010:
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http://www.marketoracle.co.uk/Article15639.html
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...
Absolutely stunning.
I can't look at stuff like this an not get a bit nervous for the future of our society and freedoms.
$40 billion of 'Unclassified' withdrawals for the month of December? WTF?
This is great intel. Not quite on topic, who knows best place to get realtime volume... for all the usual subjects (other than TV); thanks.
FT
Well I'm confused. The following is from the SSTF These are the payments they made by month for the full year 2009. There is a $1 b jump in December over November, but that does not account for the big jump that ZH refers to. So this money went out the door some other way than SS. How did that happen??
PS. The SS number for December at $57 bil is something to focus on. That is a lot of money.
Perhaps ZH would be willing to ask Mike to provide his data source for a more transparent story. Otherwise we got conflicting information like a U3 U6 debate.
Maybe it was due to Jan payments being disbursed in Dec due to the holiday.
If you go all the way back to January '09, it's progresseively bumping a billion several times and then holding at that level before bumping another billion. Are there this many new retirees by the month?
What was the big bump in May or June of 09 for?
Maybe it's for the same thing only bigger this time.
My guess is from the extra $250 per person the government gave out one-time earlier this year.
http://www.triskele.com/2009/02/18/extra-250-coming-for-folks-getting-so...
Could the spike be a result of the debt limit constraint, lifted in late December, per your item on "technical default" a few entries ago?
Just asking.
Perhaps it went to our Corporate (a.k.a. Wealthy Ruling Class) Bailout sponsors
In other news, let's increase the non-taxable limit on inheritances for more of the following :
------------------------
LOS ANGELES – Casey Johnson, an heiress to the Johnson & Johnson fortune, lived the life of a Hollywood socialite — partying with Paris Hilton, posing for paparazzi, becoming engaged to bisexual reality TV star Tila Tequila and like her idol Marilyn Monroe, dying young.
------------------------
Perhaps the more humane thing to do is make the rich earn a living rather than wasting mommy and daddies (a.k.a. Taxpayer bailout) money.
Yeah, but she happened to die in the one year in which the federal estate tax is ZERO.
Can you provide a source for your historical figures ???
You link to the final Daily Treasury Statement for Dec, 2009 for your figure of 69.5 billion. However, when I access the Monthly Treasury Statement for Dec, 2008 (http://fms.treas.gov/mts/mts1208.pdf), I see 58.7 billion for SSA -- your graph has value closer to 43 billion.
More importantly, the Dec, 2008 MTS shows the three-month total for 2008 as 169,920. Compare this to 2009 DTS figure of 169,929.
I am not knowledgeable enough to know if the "Social Security Administration" line on the MTS (Table 3 -- Summary of Receipts and Outlays) is exactly equivalent to the "Social Security Benefits" line on the DTS (Table 2 -- Deposits and Withdrawals of Operating Cash).
look at month to date column for Dec. 31, 2008: http://fms.treas.gov/dtsarchive/fy%202009/08123100.pdf
Here is full prior year archive: http://fms.treas.gov/dtsarchive/
TD - so what you are proving is that there really is a Sant Clause. Thanks. At 46 I was really beginning to wonder if he was real or not.
I must have been naughty in '09 then because I am unemployed and did not see one extra dime. In fact, my initial claim was shortened by 4 weeks (since I qualify for EB) but the first I heard about it was when I filed my weekly claim two weeks ago and was told by the automated voice that I had exhausted my benefit. Oh yeah, my final weekly claim was paid out at 23% of the standard weekly amount.
The anecdotal evidence (mother-in-law and neighbors did not receive additional SSI outlays in December, UI recipients do not seem to have received additional outlays either) is compelling that this swelling of outlays was not directed at the official recipients. So, yes, where did this money go?
Perhaps a more appropriate title for this post is Treasury "Flooded Consumers" With Money In December, Just In Time To Unleash Holiday Shopping "Animal Spirits" or Treasury Gives the Appearance of Having Flooded Consumers With Money In December, Just In Time To Unleash Holiday Shopping "Animal Spirits"
Looks like they sent out the Jan checks on Dec 31st so as not to delay the funds until Jan 4th.
Daily cash report shows 22bb on Dec 31st.
I'm looking into the older Daily Statements, but at first blush this appears to be an artifact of the calendar. Every Wednesday in December, there was a payment of about $8.1B, but on 12/3 and 12/31 (Thursdays), there was a payment of $22B (and no large payment the prior day).
Since these are 4 weeks apart, it seems that may explain the large amount in December, and possibly the bump earlier in the year. If there are 5 Thursdays in that month, payments would be greater.
Doesn't explain why there aren't more bumps in the past though.
But I think this may be benign
Let me provide you fine gentlemen three examples of how military tactics rapidly evolved over the last 200 years:
The point I'm trying to make is that new trends always begin on the margins. Of course we're never going to see something like Audit the Fed. I mean, who has time to waste on that shit? Dams rarely break due to immediate overall failure - it's always a small crack that initiates the deluge.
Likewise, look for the small things/incipient trends in the political landscape. I can't predict what particular shape/form it/they will take; all I can say with confidence is to rely on Newton ie equal and opposite reaction.
That's why I suggest watching, waiting & observing the herd. You can feel the tension; the key is to be able to identify the moment events begin to go critical. Once we reach a cascade point in terms of popular sentiment, then the entire monetary/fiscal fraud built upon a cheap facade of printed tickets will begin to crumble.
That's the tell, not just for the end of QE, but for the unleashing of the debt-deflation tsunami.
I should add that the Fed & Treasury are more than well aware of these fundamental factors. It's why they're doing what they are doing ie consistently violating basic Constitutional principles. They know what will happen when the whole shebang goes down.
All the PTB are doing is hoping & praying some kind of miracle emerges from the future. But as Trav and others have noted, the necessary ingredients in terms of energy utility & economic efficiencies are sadly lacking. Without sufficient productive output, we simply do not have the ability to pyramid & carry the additional tranche(s) of debt necessary to propel another fractional reserve lending cycle.
Again, think of the slow-mo collapse of the Twin Towers to see how the physics of implosion play out.
+1
Sometimes I think I spend too much time here instead of over at Fox and HuffPo - when I can't tell what some of my friends are talking about I now I need to force myself to sit down and watch some South Park. And then some stand-up comedy after that. Oh look, the Daily Show is actually on right now!
About the TT: I would say that falling at near terminal velocity isn't slo-mo, although, watching it, in horror, those 100+ floors take a long time to go down.
We rode 150 years on oil. The horse is tired now.
As for the Twin Towers and the whole "what to do" TSHTF/TEOTWAWKI thing, one theme emerges, be it from tsunamis or any other unanticipated disaster...the best course is to not be there. Absent that, luck is what determines survivors versus those no longer con nosotros.
If growth has stopped, which I maintain it has, then the future bodes ill for paper promises based upon expectations of growth. Simple as that.
Either way, I'm in nuclear, oil, gold. Real things. Even in Afghanistan, they have cellphones next to bombed out houses. Life goes on even if my kids don't end up owning twice the cars I have (one of which I never drive)
I've been thinking of an inverted pyramid. Like that it will collapse on top of itself. Like the opposite of a pyramid scheme.
Speaking of pyramids. When Maslow's Heirarchy of Needs is not being met, the shit will hit the fan.
Solution:
1. If you're on SS currently, you'll keep receiving it until you die. Old farts everywhere must hear this first.
2. If you're not on SS currently, a check for the amount in "your" account (plus interest -- say 6%) will be cut in your name. It will not be mailed or electronically deposited; you have to physically pick it up at the county courthouse. Illegal immigrants will be arrested and deported, people with warrants in any state or federal jurisdiction will be arrested. The illegals' checks go back to the Treasury; other arrestees' checks will be held and a family member may pick it up after arraignment.
3. The check is yours to do with as you like -- blow it, invest it, whatever. Your retirement is your responsibility; the gov't has no further stake in your post-career costs of living.
4. The truly disabled can still continue to receive SS. Panels of physicians will be set up by each state to review each case and to examine candidates. Those that are determined to not be truly disabled in the true sense of the word will be cut off and no further SS funds disbursed to them. Those that are truly disabled will continue to receive SS; it will be a line item on the budget and is not to be used for other purposes. The amount in the budget will not increase beyond a cost of living adjustment.
5. Medicare gets similar treatment -- if you're on it, you can continue to receive it. If you're not, you get a refund plus interest for any funds that have been taken on your SS number.
6. The paycheck grab for SS/Medicare/FICA ends. Your money is yours -- set your retirement plans accordingly, and don't come crying to the gov't or taxpayers when you've shorted yourself down the road.
Could you and 400+ of your friends please run for all seats in Congress? You have my and all my friends votes.
My actual plan is to generate enough wealth to buy the Presidency outright and then veto every spending bill that isn't exactly what I submit to Congress (i.e. MASSIVE cuts across the board in all departments, complete elimination of most federal gov't functions, etc). A 2,500 page budget becomes about 10 overnight; if they don't like it, they can try to override but probably won't due to a few conservative strongholds. Most of the 535 would retire or be chased out at the next midterm.....
Interesting thought -- how about a ZH congress? You can bet the SEC would function, business regulations would be sensible and few, taxation all but eliminated, and transparency in reporting......
Would you eliminate corporate and union lobbying? (It sounds like you would.) You would have my vote.
You wouldn't be able to make it illegal -- the Congress will never go along with that. The power in this scenario is the willingness to not have a bunch of agenda items that require Congress' cooperation -- the real goal is complete elimination of 95% of gov't, and that is done by veto or threat of veto, with no quarter given in terms of dealmaking.
I think the lobbying vampires would face self-elimination. No opportunity for graft = pretty much no lobbying. If the little kings and queens on Capitol Hill can't give out candy anymore, the kids won't bother and they'll go elsewhere. Eventually the little kings and queens decide that it's no fun anymore, and we can put responsible adults in those seats.
It's all predicated on a strong-willed President that is completely unwilling to give in to the political hacks; it would take a TRUE outsider, otherwise the system starts rolling again.
My actual plan is to generate enough wealth to buy the Presidency outright and then veto every spending bill that isn't exactly what I submit to Congress (i.e. MASSIVE cuts across the board in all departments, complete elimination of most federal gov't functions, etc). A 2,500 page budget becomes about 10 overnight; if they don't like it, they can try to override but probably won't due to a few conservative strongholds. Most of the 535 would retire or be chased out at the next midterm.....
Interesting thought -- how about a ZH congress? You can bet the SEC would function, business regulations would be sensible and few, taxation all but eliminated, and transparency in reporting......
Unfortunately, you overlook a glaring fact. You would be assassinated. Obama is basically explanable because he does not want to be assassinated. I think corruption in all quarters, the Congress, Agencies, the Military, the CIA and many others, not to mention Big Oil and the International Banks is an uncurable cancer, at this point. Try two simple things:
1. Audit all Government Agencies and the US Military and prosecute for missing funds.
2. Return full Constitutional law.
You will be assassinated. The Congress and the
Presidency are not the US Government.
You are forgetting all of the crazies, alcoholics and drug addicts that do not qualify for any retirement benefits due to disability but receive welfare courtesy of the SSI program. The disheveled currently receive around $860 a month to continue their drinking and drugging unabated. They will continue to receive money from all of us who paid in even though they qualify for no retirement... until the end of time.
Analysis shows SS Administration is ill equipped to administer a welfare program based on the level of fraud in the SSI program.
Amen to that!
How many kids were labelled disabled by inner city moms looking for checks for their "mentally ill" kids -- and had coaching for kids on how to act. They did a show a long time ago on 20/20 or 60 minutes about it. Whoooo hooooo.... free money for everyone! Me? I gotta work for mine.
You're right -- I was only thinking about the old farts. It would definitely have to be amended to include a function of age and whether or not they have contributed anything.
If there is nothing in an account under their SSN and they are under 65, no check is cut and no further SS is paid out.
Welfare of course goes as well; I was just speaking strictly of SS/Medicare for this discussion.
NSA jacking with my internet connection leading to double posts... again. At least one federal agency is working...
They're the biggest, but they still just throw darts like everyone else. The only thing holding our economy together is speech-writers and occasional quick thinking when cornered.
Under 2, you should include everyone here in the US on H1B visas. They are usually top income earners. They also qualify for all entitlements.
At the same time the top billionaires are sending jobs offshore to Bangalore, India, for example, Microsoft-Gates, Oracle-Ellison, Dell-Dell, (also IBM-Palmisano and whoever else), Bill Gates is prowling Capitol Hill to increase the inflow of H1B visa applicants for jobs in the United States, under the lie "American education isn't good enough." Given that the company or corporation name appears on the W-2 form, all tech CEOs should have to reveal how many jobs they've sent offshore, and then bill them for the workforce they left behind. Then, and only then, go to the US government (i.e. me, the taxpayer) for entitlements.
Only citizens get checks; everyone else donates what they've been robbed of back to the Treasury for the privilege of working and earning in the best country on earth. They can take comfort in the fact that they'll no longer be losing a fair-sized chunk of their paycheck. Now, if they go ahead and become citizens before the checks are cut I have no problem letting them keep what's been stolen.
When I buy the Presidency I'm gonna hire the smart guys around here to run things -- love your idea about holding CEOs accountable for outsourcing!
why do corporations hire h1b workers? there must be some reason.
a.)tax credits
b.)no long term committment to employee
c.)no/little benefits cost
d.)it goes on another department's budget
e.) less "uppitiness", as the h1b worker is in a tenuous/temporary position
I have been in a fortune 40 IT dept, thats what I saw, and my manager and director confided such after a few drinks...
It's simple really tax them 5 times what they would pay a US citizen for every H1B Visa job they have. That would encourage them to hire US citizens. The H1B Visa program and immigration needs to be put on permanent hold until we get our crisis over.
I like the idea in principle, but I'm not sure about its constitutionality....I think there might be Equal Protection issues. Probably the best route to take would be to jack up the taxes on the H1B holders themselves, thereby encouraging them to become citizens or go back home.
What a terrible idea. First, where will this magical disbursement come from? Perhaps you're unfamiliar with the upside down nature of SSI, ie there ain't no money for them unless they're currently taking it from us. When our turn finally comes it'll be too bad, so sad. Second, even if this were somehow possible, people are idiots: I can't help but think of Dave Chappelle's sketch on the slavery reparations disbursement. You better believe there are multiple millions out there who'd spend their cut on a truckload of Newports. Then when you tell them "Tough shit" when they are broke, hungry and homeless, they'll cobble together $20 and pick up a machete from the local sporting goods store and take matters into their own hands.
This is insane.
They need people to pay in in order to be able to pay benefits to anyone.
SS is insolvent TODAY because the relatively few people we have consuming benefits are exceeding the taxes paid in by all the people not consuming.
None of your solutions actually solves anything - they make the fiscal picture even worse, dramatically worse. Every surplus during the 90s was SS, not general budget...they have spent trillions and trillions, tens of trillions, in surpluses over the years in the general budget. Now we face the hour when obligations equal receipts and it's no accident that our fiscal picture has worsened so dramatically.
If they cut out taxes for SS and Medicare tomorrow but continued to pay benefits, that'd blow a $1.5T per year additional hole in the budget. Nevermind the refund...where in hell would that money come from? You're talking tens of trillions.
excellent post.. completely agree with you.
"They need people to pay in in order to be able to pay benefits to anyone."
<b>That's</b> the insane part -- it's ponzi thinking. Hell, there's no money in the SS fund anyway; they're not even bothering to pretend to keep up anymore. The money that has been stolen for generations and replaced with IOU's gets paid back by taking money from the other departments and programs that have benefitted from using the SS funds. They're supposed to pay it back, right? Then they need to have their funds reallocated to the payout. If that leaves them with nothing, then we've accomplished 2 goals.
It's a huge hit to be sure, but it's one-time (as opposed to a rolling hit like we have now). After that, it's a small payout for at most another generation plus a trickle for the disabled; literally nothing compared to the current situation.
Is it really better to keep a behemoth bleeding us all to death and providing a bulletproof graft/corruption vehicle?
My idea is no more insane than leading a bunch of barefoot farmers in the dead of winter against a well-armed, well-fed, and disciplined force that was arguably the dominant world power in 1776.
We just have to stop thinking along old lines and remember what the gov't is really supposed to be.
Interesting. My extended benefits have mysteriously stopped. When checking their site for payment status, I am "pending". Can't reach a live person at UE here in Ohio.
Ditto for my step-son. However, the money was deposited to his checking acct.
I wonder why there was such a spike in May '09 as well. I don't see anything like that in '08.
Could this be section 8 housing? rented out by the banks to avoid disclosing foreclosures prior to the multi trillion $ move to PPIP and Fannie Mae & Freddie Mac?
I was close in my earlier post, but not quite. It is not a 4 week schedule that caused the bump. The great majority of payments (SS pmts to those that began receiving them before 1997) are paid on the 3rd of the month. But if the 3rd is a holiday or weekend, they are paid beforehand.
So in Dec 09, there were 2 payments (12/3, the normal date and 12/31, in advance of 1/3/10). There is no SS pmt for pre-1997 retirees in Jan 10 as they already received it on 12/31/09.
That explains the Dec bump. It is benign. It does not explain the May 09 bump as there was only 1 pmt that month. Could be a chart artifact (if Excel used 4 week date increments).
Schedule is at http://www.socialsecurity.gov/pubs/2009calendar.htm
The May bump is due to the one-time $13 billion payment to SS recipients included as part of ARRA; i.e. it is also benign (at least as relates to this post)
Great sleuthing, but that's not the point of this post. We are confident there is a reason for the calendar shift, whatever it may be. However,the cash was disbursed in time for the confidence critical holiday season. The real question is absent the roughly $25 billion delta in incremental funds (SSN + UI) , how much would consumers (especially the unemployed and SSN recipients) purchase and, more relevantly, how would retailers fare on the margin. I.e., the question on renormalization of retail data.
A fair question and certainly there is a lot of data manipulation going on (like -1.8% revision to GDP).
Just be aware that the additional money ($22B) came in on 12/31 so it was after Christmas. Does 12/31 get included in calculations of Christmas spending? I know the malls were very busy that day (at least mine was). I never thought of New Year's Eve as a big shopping day.
If 12/31 is included as Christmas spending for retail reporting, then it is relevant. If so, January retail will have a huge dip if Dec had been juiced by SS.
How would moving the Jan payment to 12/31 help holiday retailers? The egg nog was already expiring in the back of the fridge. Is it me or is the premise of this article looking a little out there?
We are confident there is a reason for the calendar shift, whatever it may be.
Revisionism. You suggested it was something more sinister than a calendar shift. If this policy has been in place for years it is wrong to suggest it was some kind of effort to juice this year's holiday shopping numbers.
However,the cash was disbursed in time for the confidence critical holiday season.
Because Social Security payments were made on December 31 instead of January 3? Most recipients probably didn't even know to look for the deposit in their account and for those who did I doubt it caused many of them to run out to the store and shop.
This is a complete non-story. Any competent analyst would look at the 2 outlier data points and figure there had to be a rational explanation for them. But to a man with a conspiracy theory hammer, every odd data point looks like a nail.
I am not suggesting that anything more sinister is going on. I stated it point blank. See my post #184546 below this one. Where's my bump if the government data cited are accurate?
Tyler,
As a UI claimant who did not see a bump in weekly benefit and, in fact, saw a 77% drop in weekly benefit for w/e 12/26/09, I am questioning any numbers released showing delta in incremental funds to UI claimants. It is not my personal experience and I doubt I am the only person in the US who experienced this. Therefore, any data released by the government which point to a large change in this area are either a red herring (at best) or a smokescreen for diversion of these funds somewhere else for other purposes (at worst), IMO.
Everyday I grow more and more outraged and yet at the same time more and more helpless.
This administration is so much worse than Nixon ever was. Talk about a bear market in ethics at the top level. Both the Bushes are just crooks but I thought Obama would stand up to this manipulation but I was fooled again.
we are in such deep shit folks. Ben cant hold back the dike.
Doesn't UI pay out on a bi-weekly basis? Thus every six months or so you get a month with 3 checks.
Everything I can find suggests that each state makes claim filing a weekly torture/chore/humiliation.
There was a bump in the 1st half of December in unemployment borrowing from the Feds by the states....but overall the increase in borrowing is still rising and is more representative of the overall trend rather than a one time bump...data and sources at my blog -
http://yophat.blogspot.com/
Excerpts:
As of January 4th 2010, 4 more states have been given lines of credit for unemployment borrowing bringing the total to 30. The states added include:
Colorado, Kansas, Massachusetts, and New Hampshire. Current authorization for January 2010 borrowing totals $7,516,290,804.00
State Unemployment borrowing from the Fed over equal 29 day cycle:
US Average Daily Unemployment borrowing (Total for 25 states currently borrowing):
Nov 3rd to Dec 2nd - $69,596,132.41
Dec 2nd to Dec 31st - $141,110,833.86
Percentage Increase - 102.8%
January 1st 2009 there were 3 states borrowing from the Fed. December 31st 2009 we had 26 states borrowing from the Fed.
The Total State Trust Fund Balance of states not borrowing from the Fed on September 30th 2008 was $36,278,103,798.00
On September 30th 2009 the balance for states not borrowing from the Fed was $12,823,627,865.00 for a decline of 64.65% over the year.
Accruing at 5% interest! Doesn't show up in the General Fund budgets as it will come directly from unemployment tax on businesses. Starting January 1st 2010 the unemployment tax in most states will double or triple. Expect similar increases throughout the year and in the years to come. This will further incentivize employers to cut employees and procrastinate new hiring.
The banks got the January funds early.
Many of them did not make it available until Monday.
Then why don't we see similar patterns at other holiday periods?
MS
Now that would be a scandal.
It would have no impact on Dec retail sales though.
But more importantly would boost bank reserves for month end reporting. That would be even bigger than retail sales manipulation.
Where does Treasury record the loans to states for UE Benefits?
http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm
Want to hear about some more back door stimulus? A relative of mine recently refinanced her mortgage... no appraisal required, which is interesting, because she's probably more underwater than Atlantis. Here's the kicker... the $1500.00 in closing costs ARE GETTING ROLLED INTO THE LOAN! So, when their broker turns right around and sells this mortgage to Fannie/Freddie, wa-la, there's your $1500.00 injection. Wash, rinse, and repeat.
Is Bernanke Good, Evil, Dumb or Desperate?(polls)
I was in agreeement with the post that said the extra social security is a one time accounting thing--Jan 1010 pulled into Dec 09--but we should have also seen that at jan 31 2009, feb 28, 2009, May 31, 2009, October 31, 2009 --and the chart does not show the volatility of some moinths doubling up and other months with nada.
So it must be something else--under the transparency dictum we will never really know and also my guess is that the systems are so messed up they really do not know whats happening
The systems messed up theory wil also apply to anynew health care system.
Anybody in business knows better controls exist in smaller business units. Economies of scale are nice--being nimble is better.
Also, too bad the govt books do not follow GAAP.
A lot of people in December got large unemployment checks for the time that they ran out before the extension went into effect. I think this accounts for most of the december bump in payments.
"A lot of people in December got large unemployment checks for the time that they ran out before the extension went into effect."
What is your data source for this statement?
We did along with a big red L to wear on our winter coats so as to make us more easily identifiable. I burned mine.
A lot of people in December got large unemployment checks for the time that they ran out before the extension went into effect.
Seriously, what is your data source for this statement? The Federal government's data for "disbursements"? Data at the state level? Given the rather large body of evidence regarding inaccurate/manipulated government statistics, I'm having a hard time believing any such statements or data.
http://www.usatoday.com/news/nation/2009-10-01-social-security_N.htm
Social Security collectors up 19%
There are just not enough jobs for older people," says Richard Johnson, senior fellow at the non-partisan Urban Institute. "They have no choice but to go on Social Security."
Disability claims rose 17% this year, to more than 3 million, according to Social Security. It's projected to jump to 3.3 million in 2010.
................
Consider it the new normal..........
very good article
Could the government being using the "extra" social security funds to purchase treasuries? That would explain the huge success of the last bond auction.
Christ Almighty that is a scary thought!
Don't put anything past them.
Although inthis case it does seem to be a cut-off 'error', moreso than a boost in disbursements. Impossible to know, isn't that reassuring? Transparency, disclosure, what alien concepts.
Part of the Social Security outlays can be traced back to the Martinez v Astrue case. Social Security for years has withheld benefit payments if the recipient had a felony warrant (NOT a felony conviction) filed against them, according to SSA. This witholding even happened when there was a finding of not guilty, a conviction of less than felony level offenses and SSA had even failed to ensure that there was a valid name/SSN match between claimant and defendant. The authority to SSA is to withhold benefits when a recipient is fleeing or escaping. SSA entered into an agreement to pay back all of the benefits it has withheld under this program to the tune of 500m and an estimated 200K Americans (cases of fleeing, escape or proibation violation are excluded). I admit that 500m when stacked up against 10's of billions isn't much... still.
http://www.socialsecurity.gov/martinezsettlement/
http://www.hivlawandpolicy.org/resources/view/447
Well I hate that this is so long at the end of the list and therefore no one will read it, but I think it is worth saying. I think a possible explanation of this is not a surprise payment of extra money (which is not to far fetched), but rather it reflects on the situations of States ability to afford making unemployment insurance and are increasingly borrowing from the treasury to fund their obligations. States should be running dry and they have mid year gaps of over $27 billion from the budgets that they have set in last June-September. I think this could be responsible for a big portion of the jump in outlays.