Social Security Trust Fund
Don't believe those Press headlines that paint a rosy picture for SS. There's no good news in this report card.
An import report on a key element of the economy will show big problems looming for Social Security - it will be ignored.
The budget for "rat fees" comes to $125m.
To the Execs at Walmart, and all of those other retailers that are feeling the SS pinch, I say "Welcome to the club".
The Keynesian belief that the government can print/ borrow and spend enough money to trigger self-sustaining prosperity is a nonsensical, magical-thinking Cargo Cult. The following charts show why it will continue to fail, with eventually catastrophic results: the returns on this unprecedented borrow-spend policy are diminishing to near-zero or negative. As long as the interest rate on debt is low, the path of least resistance is to keep borrowing to support politically untouchable fiefdoms, cartels and constituencies. Eventually, the cost of servicing the debt overwhelms the diminishing returns on the debt-based spending.
Bottom line: The coin is a phony solution to a real problem.
Denial doesn't change reality. It only cripples our response to reality. Psychologists and behavioral economists have found that we deceive ourselves (conceal the truth) to serve our own interests. Perhaps this is why the mainstream ignores the Id Monsters in the shadows: shadow banking, shadow housing inventory and shadow liabilities.
"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies... That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on. Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities."
Will Congress go over the fiscal cliff? Yes, we've been going for decades, really since the social unrest of the 1970s.
Just cancel the debt; make it disappear.
Define headline heaven? Any time you can gratuitoulsy insert the names Art Cashin, Becky Quick and Paul Krugman in the same title. Like in this case. HERE'S WHAT YOU NEED TO KNOW.
SS Ponzi is approaching a cliff.
Earlier this week, former U.S. president Bill Clinton gave the keynote address to the Democractic National Convention in an effort to lend some of his popularity to Barack Obama. With the unemployment rate still stubbornly high at 8.1%, Obama has lost many of the enthused voters who put him into the Oval Office in 2008. Clinton was tapped to deliver the speech not only because of his image of a wonkish pragmatist but because of his presiding over the booming economy of the late 1990s. Like a prized mule, Clinton was dragged out to give Democrats someone to point to and say that his policies were the hallmark of smart governance. Today, Clinton still takes credit for Greenspan’s manipulated boom. His supporters on the left love nothing more than to point at his presidency as vindication of the backwards theory that higher taxes equal more growth. Clinton wasn’t a policy wonk; he was a politician who dipped into the Social Security trust fund to give an appearance of balancing the budget while the national debt still climbed higher. Through all of his financial scandals, womanizing, aggressive foreign policy approaches, and possible cover ups, it is actually fitting that Clinton is still looked to by the political establishment as someone worthy of respect. He is representative of F.A. Hayek’s timeless lesson: in government the worst rise to the top and state power corrupts.
Poison the country's well.