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Volcker Discusses The Housing Market, GSEs, Raising The Retirement Age, And, Of Course, The Volcker Rule
Not too surprisingly, now that the old man is loose, he just refuses to keep his mouth shut about the true state of the economy. Also, unlike his interview with Maria Bartiromo, this time he doesn't just walk off the set. Some of the soundbites: "The mortgage market in the US is in trouble. It's totally dependent, heavily dependent on the government participation. It shouldn't be that way. That's going to have to be reconstructed." Another modest proposal from the former Fed chairman - raising the retirement age: "Social Security program should raise the retirement age by maybe a year or so." On the greatest blunder in the U.S. housing market: "Fannie Mae and Freddie Mac were not a good idea in the first place. This hybrid public/private thing sooner or later was going to get you in trouble and it sure got us in trouble big time! So I hope we don't go back to that model." And, lastly, on the most relevant issue at hand - the Volcker rule and defining commercial bank activities:
"The criteria in my mind is, are you meeting a customer demand or are you trading in your own interest? Or are you responding to your customer's demand to sell or buy? I think that definition is clear and can be defined in law but we'd have to look at every particular trade and you don't expect us to do that do you? And I say no you don't, but you can describe the area you're concerned about and you can review trading patterns."
Full Bloomberg TV interview:
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Raising the retirment age? Well thats real nice , if you have spent you're life as an intellectual but what about those who have worked with there hands and are exausted? By the time the average real life Worker bee hits 62 they are toast and of little value in there traditional field. Volker is full of crap.
You're assuming that you've been working your whole life and are going to get Social Security.
Learning what the meaning of a Ponzi scheme firsthand is always expensive for the participants. Sorry, this isn't an intellectual exercise, and yes, you should be pissed.
Of course the US Government will keep moving the retirement 'carrot' so you see less and less of the money you chose to give them for decades. What did you expect? Seriously, be honest with yourself, did you expect anything less than being totally fleeced like a sheeple?
**********************
NATIONAL STRIKE
APRIL 15 to APRIL 18TH
TELL EVERYONE YOU KNOW
www.taxfree15.com
**********************
PS: My apologies if this sounds crude, yet the still-shot image above makes me want to add the caption "You can't blame Bernanke as has a small smeckle. His wife told me this during their Hanukkah party a few months ago."
I'm fuckin in, the strike is on!!!
Agreed, why not just pass out the Fu**** Kool Aid now JIM!.
A year of Two...............why not just make it 80, and your issue is damn near solved.
Hey, how bout that NO inflation!!....................16.8%, now that's some low shit eh?.
Retirement age as we knew it flew out the window last year.
You can say Volcker is full of it, but the truth is probably even worse... it's not a matter of raising the retirement age, it's the fact that for millions, retirement has been cancelled. Welcome to the new normal.
Social security fund has been raided and is nothing but a stack of IOUs. State pensions are horribly underfunded -- fell $1 trillion short in 2008, and I don't think they got any better in 2009!
http://www.usatoday.com/money/perfi/retirement/2010-02-18-pensions18_ST_N.htm
I say we pay off the public employee pensions first, then if there is money left over, we pay Social Security to the "little people".
Sound like a plan?
Rather, bring the costs of living down to the point where the prospective pleb retirees actually have to learn to live on slave rations. We don't have to inflate if we just shell the risk markets to rubble and blame the black hole of unfunded liabilities on the unforeseen and unfortunate market crash.
Like the carrot analogy +1
a lot of boomers are pompous control freaks - so any genXer would agree that it is tragically comical to see their retirement turn into epic fail
my generation stopped expecting anything from the get go - I like our small numbers..after this all blows to shit, we'll have some new improved fantasy carrot retirement in place to showcase in 20 years for the young masses to believe in...
being a boutique generation has its privileges
+1000
You nailed it.
I’d like to know who’s going to be arrested and put in jail for this SS caper, and if the answer is nobody, which we all know it is, isn’t it time we got the foxes, including Volcker, out of the hen house.
Frankly, Social Security would be totally solvent if it had not been raided. ... if the money had been left alone there would be more than enough for the future ... It’s just another banker/politician Ponzi scheme. Volcker is rather simplistic when it comes to solving economic problems it seems, i.e., soak the beneficiaries who paid for it. The age for collecting full Social Security retirement benefits already is being gradually increased from 65 to 67 over a 22-year period beginning in 2000…
Is this the best Volcker can do?
Please explain to me how a system designed to be pay as you go could be solvent to fund the retirement of a population bubble when reproductive rates prior to and after that bubble are much lower?
You are right. Social Security is a pay as you go system. Baby boomers have paid and are paying for their Social Security retirement—in full. The upcoming generation, regardless of its size, is funding its own SS. SS was a contract the people held in good faith with the government. This country belongs to the people. They set up a government to protect the people, not one that would steal from them.
Congress stole the SS money baby boomers entrusted to it. Now let Congress go elsewhere and find the money and put it back.
The only reason the system is headed for trouble is that Congress spent the money on something else and changed the system. Congress also keeps increasing the number of people getting SS who have not paid into it. Congress is shifting its welfare programs to Social Security so it can use the tax money designated for welfare on other programs. Social Security disability benefits for drug addicts and alcoholics are out of control. Others receiving SS who've never paid into it include the poor elderly, the blind middle-aged, the disabled young - folks in the city and suburbs who receive federal Supplemental Security Income and millions of legal and illegal Mexican immigrants.
And one of the prime reasons for Congress lying about inflation is so it won’t have to give COLA raises to legitimate SS retirees who've paid into the system.
“But,” according to unitedliberty.org., “like all Ponzi schemes, this will come to an end. The welfare for beneficiaries will exceed contributions sometime in the next 10-20 years as baby boomers retire. Over $2 trillion ($6 trillion in net present value) have already been spent by the government which, by all rights, belong to those future retirees. Instead, the government will either need to a) tax us more, b) reduce the benefits for retirees, or c) go even deeper into debt delaying the inevitability and depth of options a) and/or b).”
http://www.unitedliberty.org/articles/social-security-the-biggest-ponzi-scheme
If the Democrats under FDR hadn’t forced Social Security upon the people, the people today would have individual retirements that are considerably more valuable. They would have invested their own retirement funds, and would not have allowed them to be inflated and stolen. If I had been in the Congress during the New Deal, I would have voted against SS; it’s become just another way for Congress to redistribute wealth.
It’s time for the people to hold Congress accountable for fraud and embezzlement; it is not time to make retirees pay for what Congress has stolen.
"if the democrats under fdr hadn't forced social security upon the people, the people today would have individual retirements that are considerably more valuable." really? did the people hitting 65 in 1930-1935 have, forget more valuable than something else, individual retirements of any sort? oh you meant more recently?, i.e. the people who were net dissavers during the expansion? the question answers itself. as for actually doing it (re: "forced on the people"), bush, with his self-confessed re-election (or, if you will, first election) "political capital" (2005), tried this in a time of much better recent asset returns, much greater belief in the skill and motives of the financial sector, against relatively fewer congressional democrat opponents. and he was beaten like the drum in the surfaris' version of "wipeout". nice try but it won't fly.
People may or may not have used their retained income as a direct retirement savings. They might have made other investments. Or they could have blown it at the track. The point is - it was their money and their responsibility.
Social Security was/is a forced Ponzi style confiscation that ended up, like all available capital to politicians, used to buy votes. This is where the wealth distribution and immorality come to bear. You mention the net dissavers during the expansion as if they are some innocent souls. Are these the same people with the $15,000 credit card excesses and more worthless discretionary crap than I've ever bought in my entire life? Yes we should feel very sorry for them and fork over the money we saved by denying ourselves the very same worthless stuff they splurged indebtedly on. F**k em.
We don't need the Bush style retirement accounts either. Government will undoubtedly manage to steal that money as well. Politicians will always, always, use capital to buy votes.
People may or may not have used their retained income as a direct retirement savings. They might have made other investments. Or they could have blown it at the track. The point is - it was their money and their responsibility.
Social Security was/is a forced Ponzi style confiscation that ended up, like all available capital to politicians, used to buy votes. This is where the wealth distribution and immorality come to bear. You mention the net dissavers during the expansion as if they are some innocent souls. Are these the same people with the $15,000 credit card excesses and more worthless discretionary crap than I've ever bought in my entire life? Yes we should feel very sorry for them and fork over the money we saved by denying ourselves the very same worthless stuff they splurged indebtedly on. F**k em.
We don't need the Bush style retirement accounts either. Government will undoubtedly manage to steal that money as well. Politicians will always, always, use capital to buy votes.
In its inception, that was the purpose of Social Security. I am not an FDR fan by any stretch, but the bastardization of SS has been an ongoing effort, and the program has evolved both in practice and the psychology of the paying masses. That it has gotten to the point where comfortable parties live beyond the P&I of their investment shows the doomed nature of the exercise.
Thanks for the clarification. The obvious fact is, even with some of these people included in the original bill, the program was not sold in 1935 as a welfare program but as a retirement program for the millions of people and their families who were employed and who paid into a system that would then provide a supplemental retirement. The contributions from their earnings through the years supported the retirement program and were separate from their income tax payments.
Ask most anyone to characterize the intent of Social Security, even today, and they will say that it a retirement program for people or their families who've paid into it. Most people, myself included, would not realize the welfare extent of the program.
It would be a stretch to say, however, that the bastardization of SS existed in the 1930s to the extent it does today. For instance, “Aid to Dependent Children (ADC), which the U.S. Congress enacted on August 14, 1935, as part of the Social Security Act of 1935, began as a program limited to dependent children under sixteen who had lost one or both parents, an outgrowth of the underfunded widows' pensions numerous states enacted after 1911.”
My research shows that, according to Encyclopedia of Children and Childhood in History and Society: “Vastly increased federal spending in the 1940s and 1950s generated enough prosperity to make poverty (apparently) disappear, and to encourage massive movements of peoples of all classes and races around the country, and from farm to city or suburb. By the 1960s ADC and other programs ballooned, and ADC became AFDC, Aid to Families with Dependent Children, with caregivers' stipends added. In 1960 AFDC was the largest federal welfare program, with 3,000,000 enrollees...nothing less than a broad welfare program…
“Well into the early 1970s, the rolls grew at a dizzying pace, due to the growing impoverishment of the lower classes. The age's egalitarianism and individualism encouraged the poor to demand welfare as a right, not merely a privilege, and this, combined with racial tensions, and the growing new conservative movement, led to increasingly fractious criticisms of AFDC. By the early 1990s, AFDC, and the compassionate welfare vision of an earlier era, was increasingly politically out of step with the times. The WELFARE REFORM ACT OF 1996 ended AFDC.” It was replaced by the Temporary Assistance for Needy Families (TANF) program as described in section 601 of the Social Security Act.
http://www.faqs.org/childhood/A-Ar/Aid-to-Dependent-Children-AFDC.html
According to Public Benefit Law, Professor Levy, Spring 2001: “Today, the largest welfare program is TANF “which provides federal block grants for state benefit programs for needy families. TANF replaced AFDC and is the principal component of welfare. The second major component of welfare is Food Stamps… SSI is a third important federal benefit program that provides federal benefits for the aged and disabled individuals on the basis of need… SSI, TANF, and Food Stamps are supplemented by a variety of other need-based benefit programs. For example, individuals who qualify for SSI, TANF or Food Stamps are generally eligible for federally funded Medicaid benefits as well. Additional programs include state general assistance benefits, school lunch and other supplemental food programs, housing and energy assistance, and programs targeted at specific populations.”
http://web.ku.edu/~rlevy/Public_Benefit_Law/AFDC.overview.PDF
And some people still argue that it is not socialism.
It's Progressivism - food stamps have been replaced by debit cards, and the dollar can be devalued merely by 1) increasing the rolls (compassionate in a time of >20% real UE), and 2) banging up the balance on the cards via the redistributionist printing press. In this case, though, the Gummint is taking not just from the paper wealthy, but from all savers, another secretly despised class. I love it when I have to go into the local Qwikie Mart and stand in line behind folks with two piles of merch, the "food" transaction going on the card, and the separate "sin" transaction coming out of the back pocket cash.
Note to Volkenites: If you are under 60, you will never retire. MUAHAHAHAH!!!!!!!!!!
MWU HA HA HAAA !!!! I retired at 42.
Social security WILL be solved, but only in the following way:
1) Raise retirement age
2) Raise SS tax
3) Reduce benefits
Sorry, everyone is against at least one of these items. Using all three to close the gap is the only way it ever gets done.
We're waaaaaay past worrying about what is fair.
Is it fair that the contributions of people who are now entering retirement made to social security were based on formulae that assumed they would not live as long as they will?
Effectively they spent their whole lives UNERPAYING into the system, and now are waiting to collect more than they should.
Unless of course they all volunteer to committ suicide at the actuarially determined termination date established when they entered the workforce, I suggest they prepare for less bennies.
just raise the age to 100
or dont raise it but broadcast the truth and well all die of liver disease
+1000
you are right. and the (relatively trivial) size of the adjustments necessary for solvency when the problem was first understood is one of the greatest indictments of our political class. even now it is not as onerous as often made out. however it is supremely ironic that all this "fiscal austerity" re: entitlements (rarely defense spending, the other great oinking porker -- plus it kills people, usually while reducing u.s. "national security") coincides with a depression and comes after a 25 year expansion during which huge deficits were run, largely by (in the u.s.) "conservative" republicans. keynes is rolling on the floor, laughing his ass off.
Keynes isn't the only one laughing his ass off. That you would write your little screed in the face of the failing Porkulus stimulus experiment amuses me to no end.
Be more respectful of your senior Ponzi specialists, the Feds! Your sacrifices are necessary to maintain the lifestyle of the people who matter, the bureaucrats and bankers.
raising the retirement age.... pffft!
Put that old fart to work picking up trash!
hey he's 80 or so and he is still working. plus he's a lot closer to the truth than the lying, stealing sacks of shit that were the bush administration treasury department (and are the obama treasury department).
Retirement should be a privilege obtained by those who have made good choices with their lives, lived beneath their means, and taken good care of themselves. It should not be a right afforded by the Constitution, paid for by the public.
But it (retirement) is. For the rest it is called welfare. How it became mandatory under the paper thin "common good" rubric is another story. The urban laboratories have pronounced sentence against this Great Society experiment. Don't forget, Obama's first political foray included representing the residents of Grove Parc, who he left as bad off as he inherited. But my, didn't Valerie Jarret and Tony Rezko make some nice taxpayer bucks off the plight of the Chicago helpless.
Let's keep on this path to oblivion then Sherlock
Volcker was totally flirting with the Bloomberg reporter!!
That dirty old man! :) Still got it, though.
Dude is talking too much, better be careful if he travels overseas...
http://motherjones.com/kevin-drum/2010/02/power-assassinate-american-cit...
good point. change we can believe in.
How do the younger people to locate a job, as raising retirement age?
why even retire ? who will pay for the banker bonuses ?
pretty honest oldie. all is not goldie for the yankie.
What jobs are they talking about? There are not jobs!!!!!
I think he is upset because he "knows" that the Volcker Rule will never be allowed to pass UNLESS maybe the Dow hits 4000 - in which case any rule will become passable.
Sorry to say this Paul, but Obama is using you as a decoy big time; he and the US Congress are owned big time. Perhaps you see it but are making your case (which is the correct one in my view) anyways and for that I respect you.
Hello? Hello? Hellllooooo??????!!!!!
He's a CENTRAL BANKER.
You don't think he knows that Obama and the CONgress are owned?
Jesus Christ. I'd bet a federal reserve note that Volker, Obama, and CONgress all report to the same goddamn financial underboss.
You're only willing to bet a federal reserve note?
Name any amount. If I lose I'll merely type a credit into my computer and email it to you. If I win I get your house. Fair enough? ;)
Pete.....Volcker acted much differently than g'span and bernanke.
Volcker understand the punchbowl theory and acted on it.
g'span and bernanke keep filling it up kool aid and giving it to anybody, whether they are thirsty or not.
He's a central banker deadhead.
That means the motherfucker was hatched by lizards and drinks infant blood. What part of that don't you understand.
Serial killers lull their victims with incredible social grace. Put this motherfucker back in the driver's seat and he's sure to finish us off.
Now that's just funny.
yes, just funny. not salient. just funny.
salient because the Fed is a huge part of the structural problem.
Have to agree that he knows exactly what the plan is. IMO I think he is on the back burner just in case they need to restore credibility to the FED (if there is enough public backlash) then he will replace Bernanke.
If you're interested, there's a growing William McChesney Martin cult.
Max out the IRS deducts, and grab some of that amnesty, at $.10 on the dollar, 10 yrs down the road?.
Pay backs a bitch.
When it comes to lacking pronunciation and well thought out sentence structure, Volker would give Barney Frank a run for his money.
"Hedge funds, not rocket science. Equity funds, functionally one could have a reasonable explanation. Hedge fund, equity fund, prop trading. Hehe, prop trading....customer demand, sell or buy. Reasonably care, each trade? I don't. Review trading Patterns. Customer service, prop trading hee he. Prop trading, supervisor. Federal Reserve gloppity gloop has every authority to go in and do what they want. Tropicana, well thats a great big schtick as the bubbley goop. No, no. The agency Federal Reserve blibbity blop. Rising costs...prices are very stable. Low as they are now, markets are loosening up. Talk about judgments, I am not going to pornography the mortgage real estate. Reconstruct. Fannie and Freddie, I will state the obvious. Raise the retirement age, overtime....snicker snicker. Oligarchs do not care about any of this. I am one of them. I am a pawn for the Illuminati. This interview is over. First, lets get it on. Champaign?"
critic of (rather erudite) volker's pronunciation and sentence structure: it's "champagne". ("champaign" is a city in illinois).
dually noted. although i think his bla bla bla nature really is the reason no one is listening; however, as an R teest, I have to say, for a post such as that, i care not how I spell champhayne.
Dually!? How about 'duly'? Your expressive semiotics prove you've been ready to move beyond phonetics for a decade or more. For an artiste to improperly employ such a cliche term is doubly gauche.
Sigh, what is it about volker? a nostalgic moment for grumps who have no concept of what 25% unemployment plus failed bonds implies; viewed as a knight in shining armour Volker's "ban on prop trades" and a rate raise will save 'merica?! comn, he is a stchick. he is the white guard; all while still holding the chalice and drinking from the same. he is half ass and there is no way half ass is going to cut it. Volker is 'merica's reply to european economics; a little here a little there. sure, he is better than BS Bernanke, but as it all falls not even Tall Paul's slight "heroics" will save the markets. the best chance we have is to form state run banks backed with precious metals. we must do this before the IMF begins to sell us a G7 currency for the gold in fort knoX, or some other type of scheme. volker will be one of the chief visionaries of course, for the world currencie idea mind you. he will never leave a fiat monie system.
My fellow Europeans
I have brought you all today to talk about the Dork rule.
The first rule is.... do not be a Dork buy Gold
The second rule is buy silver
And the third rule is ...... I know this will be somewhat difficult for the Liberal members of the audience - buy lead
And just remember not to fear the future and to keep a certain level of disdain for those rude people across the pond as that could be the only thing we will have left when this is all over .
That is all Gentlemen feel free to panic.
Make sure you have something that will shoot the lead too.
GREAT moniker!
+1,000,000
all hail the dork.
even though i'm one of the rude people.
Ahh - a retirement plan that actually stands a chance of success. Refreshing...
"Fannie Mae and Freddie Mac were not a good idea in the first place. This hybrid public/private thing sooner or later was going to get you in trouble and it sure got us in trouble big time! So I hope we don't go back to that model."
Go back? It ain't going away.
Maybe he meant going back to "hybrid public/private" from the current total public life support system.
Last I checked their equity was still trading, you think all the money they owe to the taxpayer is gonna be paid back? It is gonna get converted to equity and they are going right back to what they were.
The Volker Time Machine. aka Old Timers. aka stuffy old guy out of touch with reality.
man, i can't wait til i'm an old timer. except for the part where i have to eat cat food. that's gonna suck.
My cat ("Marla" - no shit), wishes to inform you they have made great strides in the palatability of cat foods. Of course it still stinks when microwaved, darn.
He can keep his sticky old man stinkfingers off of social security. Go bend Hank Paulson over you geriatric fruitcake.
yeah, really. What is it with these old f's anyway? Same with that greenspan fella. Go away already, your time has passed. Go save your soul and feed the homeless or something.
This should become a full time job for Geithner. Best to leave the serious issues to men like Volcker.
One wonders where Summers was, as it seems he would benefit most from a trip down a produce aisle.
Shoppers at a Fresh Grocer in North Philadelphia were greeted Friday afternoon by some surprise visitors -- First Lady Michelle Obama, along with Treasury Secretary Tim Geithnerand USDA Secretary Tom Vilsack.
http://www.huffingtonpost.com/2010/02/19/michelle-goes-grocery-sho_n_469392.html?slidenumber=4LFz40MtRfg%3D&&&&slideshow#slide_image
I have to say I do not understand the Volcker fetish , Margret Brennan maybe but not big Paul - then again each to their own.
They shoot horses dont they? At some point I'm afraid there going to shoot old folks. I'm 62 and must wait till I hit 66 for full SS. Im a welder thats on my feet all day, not some fat cat sitting behind a desk watching porn on his laptop. Now because of the weak economy, Im on a 3 day work week. I would rather be working 5 days but a 4 day weekend isn't bad as long as I can pay my bills. I do expect that those in the 30 to 40 age bracket, will have to wait till they are in their 70s till they can either retire or be shot. Not a pretty picture for those who don't start building their own retirement accounts when they are still young enough to have something later in life so they don't have to wait till 70/75 to retire or die. LOL
Oh and I almost fell asleep listening to the interview. very boring if I do say so.
I hear you. Well said.
“If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.” –Thomas Jefferson
F. A. Hayek, the Noble prize winning economist -- explaining the loss of freedoms under socialistic central planning -- wrote: “As the coercive power of the state alone decides who is to have what, the only power worth having will be a share in the exercise of this directing power.”
hayek's right, probably. guess we'll never know, here in the u.s. could have used a dash of that socialistic central planning over the last forty years possibly, perhaps to at least continue the depression era financial regulations or, as keynes recommended, accumulate surpluses during times of plenty so as to have contra-cyclical reserves in times of famine (the boom/bust cycle that is the achilles' heel of capitalism). didn't get it.
It's central 'planning' that exacerbates the boom-bust cycle. Your so-called achilles' heel is actually minimized in a free market that is allowed to correct itself and also does not support massive bubbles.
Ding ding ding! In an honest free market, a little deflation isn't feared, and actually sets up the next surge in productivity. It never reaches bubble or bust proportion, because speculators and rent seekers are forced to take 100% of their lumps when required.
We need to raise the retirement age, cut the benefit and reform the system re graft and corruption which is rampant...
i agree....you first
ha ha ha ha --yes Indeed--
Ok the new plan is..... work till you drop , well I always taught the human imagination was better then that but maybe not.
It is if as the Pharaoh after completing his Pyramid instructs his subjects to increase productivity and build a bigger grander Pyramid to honour his magnificence.
But today we build not a physical structure but a Pyramid of debt . The Pharaoh may be dead but Milton still calls on us, instructing us to follow his teachings.
His disciples still carry out his divine work with diligence and respect yet there is murmurings of revolt - Ah the Pharaoh is divine and all knowing so we must be the flaw in the machine , we must work harder to carry out his divine plan.
Social Security is an easy fix but no one wants to man up.
First you should means test the benefits.
Second raise the minimum wage base by a large % each year.
And only third, raise the age requirements.
correct. please repeat yourself as much as possible, to as many as possible.
WALL STREET OLIGARCHS EYING SOCIAL SECURITY | Paul Craig Roberts | February 18, 2010
Hank Paulson, the Gold Sachs bankster/U.S. Treasury Secretary, who deregulated the financial system, caused a world crisis that wrecked the prospects of foreign banks and governments, caused millions of Americans to lose retirement savings, homes, and jobs, and left taxpayers burdened with multi-trillions of dollars of new U.S. debt, is still not in jail. He is writing in the New York Times urging that the mess he caused be fixed by taking away from working Americans the Social Security and Medicare for which they have paid in earmarked taxes all their working lives.
Wall Street’s approach to the poor has always been to drive them deeper into the ground.
As there is no money to be made from the poor, Wall Street fleeces them by yanking away their entitlements. It has always been thus. During the Reagan administration, Wall Street decided to boost the values of its bond and stock portfolios by using Social Security revenues to lower budget deficits. Wall Street figured that lower deficits would mean lower interest rates and higher bond and stock prices.
Two Wall Street henchmen, Alan Greenspan and David Stockman, set up the Social Security raid in this way: The Carter administration had put Social Security in the black for the foreseeable future by establishing a schedule for future Social Security payroll tax increases. Greenspan and Stockman conspired to phase in the payroll tax increases earlier than were needed in order to gain surplus Social Security revenues that could be used to finance other government spending, thus reducing the budget deficit.
They sold it to President Reagan as "putting Social Security on a sound basis."
Along the way Americans were told that the surplus revenues were going into a special Social Security trust fund at the U.S. Treasury. But what is in the fund is Treasury IOUs for the spent revenues. When the "trust funds" are needed to pay Social Security benefits, the Treasury will have to sell more debt in order to redeem the IOUs.
Social Security was mugged again during the Clinton administration when the Boskin Commission jimmied the Consumer Price Index in order to reduce the inflation adjustments that Social Security recipients receive, thus diverting money from Social Security retirees to other uses.
We constantly hear from Wall Street gangsters and from Republicans and an occasional Democrat that Social Security and Medicare are a form of welfare that we can’t afford, an "unfunded liability." This is a lie. Social Security is funded with an earmarked tax. People pay for Social Security and Medicare all their working lives. It is a pay-as-you-go system in which the taxes paid by those working fund those who are retired.
Currently these systems are not in deficit. The problem is that government is using earmarked revenues for other purposes. Indeed, since the 1980s Social Security revenues have been used to fund general government. Today Social Security revenues are being used to fund trillion dollar bailouts for Wall Street and to fund the Bush/Obama wars of aggression against Muslims.
Having diverted Social Security revenues to war and Wall Street, Paulson says there is no alternative but to take the promised benefits away from those who have paid for them.
Republicans have extraordinary animosity toward the poor. In an effort to talk retirees out of their support systems, Republicans frequently describe Social Security as a Ponzi scheme and "unsustainable." They ought to know. The phony trust fund, that they set up to hide the fact that Wall Street and the Pentagon are running off with Social Security revenues, is a Ponzi scheme. Social Security itself has been with us since the 1930s and has yet to wreck our lives and budget. But it only took Hank Paulson’s derivative Ponzi scheme and its bailout a few years to inflict irreparable damage on our lives and budget.
Years ago with stagflation defeated and a rising stock market, I favored privatizing Social Security as a way of creating a funded retirement system and producing greater savings and larger incomes for retirees. At that time Wall Street was interested, not for my reasons, but in order to collect the fees from managing the funds.
Had Social Security been privatized, I doubt that Wall Street would have been permitted to deregulate the financial system. Too much would have been at stake.
After the latest crisis brought on by Wall Street’s dishonesty and greed, trusting Wall Street to manage anyone’s old age pension requires a leap of faith that no intelligent person can make.
Wall Street has got away with its raid on the public treasury. Now, pockets full, it wants to pay for the heist by curtailing Social Security and Medicare. Having deprived the working population of homes, jobs, and health care, Wall Street is now after the elderly’s old age security.
Social Security, formerly an untouchable "third rail of politics," is now "unsustainable," while the real unsustainables—a pre-1929 unregulated financial system and open-ended multi-trillion dollar Global War Against Terror—are the new untouchables.
This transformation signals the complete capture of American democracy by an oligarchy of special interests.
Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal.
You want to regulate the financial system? End the Fed.
Don't forget Hank Paulson.
Why can't a pound of flesh land on hank?
I can't believe Hank Paulson is still at fleecing the middle class. He's already worth hundreds of millions if not a billion. Why do these fat cats always want more? They are never satisfied. What is it about being rich that causes this itch?
it is a, perhaps the most important, driver of capitalism. earnings per share must grow or the stock price declines (ceteris paribus). lots of good things come from this and some bad things too. when the world was mostly wilderness and there were a few million humans, the good things far outweighed the bad (if you weren't a slave, serf or impatient low level worker). now, perhaps, not so much.
It's all he knows how to do?
Regulation means death in this case. There is no getting around the fact that it's time for a lot of people to perish. This generation is calling for coals upon it's head. The lukewarm life style is about to experience it's own judgment, the cold heat of passion.
Just married? Holy Shit isn't he like 200 yrs. old?
Social Security is a good example of what Obamacare will look like in the future. Not a pretty picture.
Both parties are guilty of stealing the SS contributions and using them as part of the general budget.
Were seeing the same again with the Tarp money that was paid back. Instead of using what was paid back by the bank to pay down the debt, its being spent on other porkbarrel projects.
Just yesterday Obama was campaigning for Harry the Hat Reid, when he announced another Billions plus dollars for folks who's homes are being forclosed on. Government shouldn't be involved in bailing out folks who made bad deals, and signed onto mortgages they never really could afford.
A big percentage of those who have already worked out a better deal with the banks are still not making payments. Much of the $800 billion stimulus hasn't been used. Obama is holding it to help his Democratic party when they are up for reelection in November.
Obama promised hope and change. We can only hope he doesn't bankrupt our country. Change might be all thats left in the government coffers by the time Obama is gone.
I still think allowing younger workers to invest a small part of their SS taxes into fairly safe investments such as bond funds or a combination bond and stocks isn't that bad an idea.
Those who oppose such a move look at the recent market crash as an excuse to bash this idea. However were talking about a small percentage. perhaps 25% of their taxes.
Opponents don't like that because that would allow the individuals to own those funds and also be allowed to pass them on to their children or even donate to their favorite charity after they die.
Politicians want to control every aspect of your life. That also means controling how much money you are allowed to have.
If a worker was able to contribute 15% to 25% to a fund for 25 to 30 years. Even at a small 5% average yearly gain, Im sure they would have a nice nest egg to fall back on plus what little else the SS fund would provide.
At least they would have something guaranteed. That is unless the government changed the rules after those folks have built up a nice pile of cash and then decided to tax their next eggs again which I am certain would eventually happen. LOL
Good Article.. Go Tyler later on be sure to watch the new video
that William Black made.. he is a retired bank regulator who
explains what is going on right now with the Big Wall St. banks.
go see it at >> goldsilver.com scroll down to William Black
it just came out 2 - 19 -2010 after you see it.. don't bother
writing to your congressman about it.., they are all bought-off
by the big banks... This is a planned demolition of the taxpayers.
the clowns ought to eye ..
taxes or tarriffs on imports,,, level the field ,, bring jobs back.. volker the clueless
no need to post anything else guys.
One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.
http://www.blacklistednews.com/news-7149-0-5-5--.html
HA! Best post of the day. I like my hemlock boiled down.
Social Security was created with the assumption the average person would retire at 65 and pretty much die 5 years later.
Well, 65 is the new 55 and people are living into their 80's or LONGER. They are more productive longer, and the system wants you to pay longer into the ponzi and shrink the pool at the same time. More money sucked out of your paycheck, to go to a smaller pool of lazy spoiled Baby Boomers.
Since the US has a decreasing or neutral real birthrate, like Japan, the US has a smaller demographic of workng people to pay these obligations. So what do you do? You renege on the deal and move the line further and further. By the time I'm eligible, I'll have to be 80.
Once you stop contributing to GDP, you are an albatross on the system. The USG wants you to die, but religious organizations want you to suffer and die in pain and empoverishment. Then Government then uses the medical system to extract your money out of you at an exponential rate on sickeness
What we need is an opt out system called Soylent Green. When you are a broken part in the machine, they take you to the Vet and put you to sleep with a glass of Merlot and a pastoral movie
You first, i will help you on the bus.
Maybe we should start at age 40!
Wait , abortion. Or is that too early!
I would give you a chance with a coin toss,
but all i have is bullets.
We are like a bad guest eh?
I will run over your young ass in my wheelchair and sik my seeing eye dog on ya
SS should not have a trust fund. It was a stupid idea. The only place such a fund could ever be invested is in debt obligations of the United States.
Though, I guess if it had been invested in Berkshire, we could all retire to a villa in France.
As for who is paying for whom, all the boomers in my family are all still working, and we are paying for the members of our family from the Greatest Generation, a great many of whom are still alive. Pops landed on Iwo Jima 65 years ago yesterday.
Good post! It is finance, not baby boomers, that has stolen America’s wealth. Most baby boomers, those born between 1946 and 1964, have had to live “within their means” on the paychecks of two wage earners most of their lives. And they’ve paid their way. As a result of the tax increases instituted by the 1983 Amendments, over the past 25 years the Social Security system has collected more taxes than it has paid out.
In 1983…a 30-year-old baby boomer needed to commit 44 percent of his income to meet the carrying charges on a median-priced house. That same year, 65 percent of all first-time baby boomer homebuyers needed two paychecks to meet their monthly payments…
By the end of the 1970s, Fortune magazine estimated that baby boomers had effectively lost ten years’ income when compared with the earnings of the generation just preceding them. Throughout the 1980s, corporate “downsizing,” “streamlining,” “merging,” "offshoring” and "globalization" eliminated whole levels of middle and upper management. In the 1990s, salaries barely kept up with the cost of living and taxes.
And, now, the “boomers” are getting old, and the “healthcare” that they rate as depicted on the graph of Obama health-advisor Dr. Ezekiel Emanuel—what he calls his Reaper Curve—is bare “minimum.” They aren’t productive any longer, you see.
http://online.wsj.com/article/SB10001424052970203706604574374463280098676.html
As to the current plight of boomers, Zero Hedge reported in January in “Observations On The Aftermath Of The Artificial Recovery From Dean Baker,” the Co-Director of the Center for Economic and Policy Research, these statistics:
Further complicating matters, the one certainty associated with the Obama regime, high unemployment, will persist…
It is the international banking cartel operating on America’s shores under the moniker, the Fed,, not the baby boomers, that has gamed the American system, commandeered and offshored Americans' property and wrecked the American Dream.
http://www.zerohedge.com/article/observations-aftermath-artificial-recov...
Why does this site read like a damn Tea Party sign-waving extravaganza ????? Did my "Bookmarks" function on FireFox screw up ?
GlenBeck AT CPAC
http://www.ustream.tv/recorded/4881432
Yes, comrade, you should never retire lest you become a drain on the collective. Comrade, we want you to work until you die.
Sad, but we let this bullshit creep up on us. We were content to ignore the growing doom of insatiable government control. Moreover, government funded by insatiable corporatism.
But, it's not too late. Vote with your ballot, vote with your dollars, vote while you still can!
USA-"PLease die early and often. thanks, the management."
Here's the problem:
-Banks are allowed to make money. They print it against a Treasury bond OR they make their own dollars(or any currency) by created asset classes out of THIN AIR and determining a price for them and a market.
Derivatives are inherently WORTHLESS, but if Goldman wants <x> dollars for a CDS,MBS or Gold swap then they created <X> dollars in asset value and thus MONEY.
If it acts like money-then it IS MONEY. Whether Geithner floats it or the banks, it's money.
Volker needs to go deeper and disallow the creation of asset money vehicles by banks. Banks should not "create" money unless they have a USTreasury bond against it-Approved by the Congress and the Executive Dept. Period.
Any bank that is systemic and Fails needs to be nationalized. Period.Not saved and given more opportunity to create more systemic risk and asset classes to compensate for a asset valuatiuon implosion
New & Improved Swine Flu v. 3.0
Problem solved.
According to articles I've read, approximately three-quarters of the baby-boomer population will have to work beyond the Social Secuity retirement (SS) age limit, because they have insufficient assets. If you are wealthy enough, you can retire at any age; and those with great inherited wealth will never have worked. So much for government SS age mandates.
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