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A Canadian Summarizes America's Collapse: "Everyone Takes, Nobody Makes, Money Is Free, And Money Is Worthless"
On this lackluster Boxing Day dominated by illiquid moves in every asset class, we thought a few succinct minutes spent comprehending the US and European government policies of social welfare and their outcomes was time well spent. Canadian MP Pierre Poilievre delivers a rather epic speech destroying the myths of US and European 'wealth' noting that "Once the US citizen is in debt, the US government encourages them to stay in debt," noting that "the US government encouraged millions of Americans to spend money they did not have on homes they could not afford using loans they could never repay and then gave them a tax incentive never to repay it." His message, delivered seamlessly, notes the inordinate rise in the cost of all this borrowing, adding that "through debt interest alone, soon the US taxpayer will be funding 100% of the Chinese Military complex." From Dependence to Debt to the Welfare State and back to Dependence, this presentation puts incredible context on the false hope so many believe in the US and Europe. Must watch.
"By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel."
"Through government spending the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation's extravagance becomes another nation's debt"
"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless."
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It all started when they began paying ballplayers millions.
Everyone figured out it was all bs at that point.
It's the Herbalife Nation (c)
:)
Foreigners.
They hate us for our fiatdoms.
"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless"
~~~
It should be obvious that CENTRAL PLANNING brings about this result... But I guess if you happen to have wormed your way into the small committee of central planners, you really don't give a fuck...
BULLSHIT ALERT!!!
For those who don't know Pierre Poilievre let me you that his guy is just another neocon scumsucking asshole.
His Conservative government has created the same subprime bubble as was created in the U.S. by decreasing lending restrictions on our banks back in the May 2006 minority budget. Since then his Finance minister Flaherty has increased CMHC loan guarantees to the bank from $300 billion dollars to $900 billion to keep the Canadian sub-prime bank scam going.
These fuckers just increased Genworth's (a private company) limit by $50 billion to $300 billion just 4 days ago!.
http://business.financialpost.com/2012/12/21/feds-ok-another-50-billion-...
Oh ~ so he's completely wrong then... He should have said...
~~~
"NOBODY takes, EVERYBODY is gainfully employed in righteous manufacturing, it PAYS to work [where bankers skim your labor], greed is good, paper money is precious, gold is worthless"
That makes a lot more sense...
Don't be an idiot.
The Harper government is full of the same intellectually lazy, and morally bankrupt morons we see everywhere around the globe.
From his Finance Ministers lips back in 2005 just prior to the subprime debacle..
http://www.thestar.com/news/canada/article/944531--do-we-really-want-to-...
I could give about as much of a flying fuck about him or the Harper government as Snake Plissken gives about your war or your President...
My comment was about the comment [which I'd synchronize as being valid]...
It's yet another example of a case of image versus substance [& the lack of capacity for folks to differentiate things that are really important versus things that really aren't]... I'd invite you to ask me for more examples of this but I'm SURE you won't like my reply...
Leave it alone... I'm tapping out... I shouldn't have wasted my time...
"I've Got One THAT CAN SEE!"
https://www.youtube.com/watch?v=kBY6pF42I-c
(from the movie They Live!)
Pretty funny.
Canada has the same fiat money and debt bubble that the US does.
According to the system, this guy is an MP of the party in power and he and the Conservatives are supposed to be doing something about the situation - yet he and his party are doing squat.
BINGO!
100% hypocrite.
If he is a politician then he is irrelevant.
The bubbles on that 2007-2012 debt graphic are wrongly proportioned likely with an intent to sensationalize.
.. not that the numbers don't suck to begin with.
His being an asshole doesnt make it not true.
And if you think the NDP and Liberals are any different, then your just as much an asshole.
Correction
The CMHC, has a $600-billion limit that has been capped by the neo-con Finance Minister Flaherty, who also shut down their backroom potrfolio insurance scam. In fact CHMC was supposed to get involved when buyers had less than a 20% down payment but began providing backing to pools of mortgages held by the Canadian banksters who were trying to securitize them. Looks like they learned from the US disaster.
http://business.financialpost.com/2012/04/26/how-cmhc-morphed-into-a-600...
Here's the clarification Junior...
$900 Billion total insurance to the banks. (That would equate to $9 Trillion dollars in the U.S.) $300 Billion cap on private insurers and $600 Billion cap on CMHC the Federally managed insurer. All to protect the banks from mortgage losses when things go badly to keep the Canadian 'ECONOMIC MIRACLE' alive...
http://business.financialpost.com/2012/12/21/feds-ok-another-50-billion-...
The Cannucks hold out hope their central bank saluting assholes can outlast our central bank saluting assholes. Not gonna happen. Both CBs work for they same team so decisions have to be made. If North America goes tits up simultaneously it makes it easier to herd us into a common "solution".
That is in fact the plan. Did you ever wonder why Scotiabank and Bank of Montreal became Federal Reserve primary dealers ack in 2011?
http://ca.reuters.com/article/businessNews/idCATRE7936Q120111004
Zero - agreed it is hypocracy. Doesn't mean his speach wasn't spot on.
We have a lot of problems to fix here. A Liberal/NDP gov't will make things worse. We need to to hold the Conservative's feet to the fire - if they are willing to admit the problem then they can be turned to the dark side :-)
Best thing to do is to email the guy - tell him you saw his speech - tell him you agreed with what he saw as the problem then hold him accountable as to the the same thing is in fact being done here.
In a world where everyone wants to deny there is a problem at least they can see what's happening around them. Not perfect but it's a start.
Agreed.
However if Hitler ever gave a great speech on religious tolerance I would be calling him on it as well... regardless of the appropriateness of the message.
The entire system has been bought and paid for by special interests left, right and center.
(Confession: Former PC Party member)
Conservatives quoting liberals. Talk...just talk.
Francis, +1 for the tap out. Sheeple NEVER LEARN. So why bother?
"Former Anglo Irish Head, Re-arrested on New Chrages"
http://www.dailystar.com.lb/News/International/2012/Dec-21/199422-former...
... seems everyone's doing it-- as the pig squeal's for mercy and vomits, altruistic emotive regurgitated latent epitaths of garbage-in, and garbage-out upon unpenn'd 'Lansdowne-Hoggish Manor', the omnivores sows appetite increases for more piglet's!
they're all fucking thieves... hang em`high
Excellent: So you are sayign he's just another Richard Fisher then?
Fisher in 2005: "We need to import shit from China, don't buy Gold"
Fisher (after OWS and Dylan Ratigan and the FOMC report revealed he was against working Americans): " We need to move jobs back to the US. Buy gold!"
Suddenly the socialists are full of fiscal rectitude!
Sounds painful...
I don't blame the government for creating this mess, I blame the cats in the mirror for jumping at the chance to toss yet more credit card debt onto the heloc so we could continue to go shopping. And we do this despite the lessons we could have learnt from the suffering occurring south of the border.
Heyyyyy, the bank's dumb enough to give me a 0 down 40 year amortization! Let's go shopping! We're gonna be rich with their money!
*facepalm*
He is taking the opportunity though to make it known. Admitting there is an issue is the first step in letting everyone know this is now completely out of control. If you haven't noticed our government is compromised of sock puppets nobody goes to a poll for since 1961.
What should shock you is one of the sock puppets literally told the entire House of Common's that they aren't getting their pensions and more civil servant cuts are coming. For a communications minister he should watch how he says things in French then in English. I've mentioned in previously, double meanings in French are very common and in politics encouraged to veil a message. Trudeau and Chretien were masters of double speak in french. Pierre isn't too bad either.
He gave his french homies a heads up and the anglophones a pretty rhetoric driven speech.
I CALL BULLSHIT ON ZEROHEAD
Zerohead is off base in every way. "Pretty pony" would be proud you -- you little liberal shit!
Huzzah for ZerOhead!
Bullshit alert is SO TRUE!
If only that little douche Pierre could get all those Canadian financial geniuses to take over the defense costs of our very expensive, one-way "friends".
They hate us for our Stanley Cup - end of story.
"All your hawkey are belong to us", eh?
It's abewt time!
Nice simulated Canuck accent! "Piratish" almost...
Listening to Canadian twat politicians give lectures on rational, disciplined fiscal & monetary policy is akin to having Don Cherry as a high-end fashion consultant.
sure they do, that's why they keep winning it
easy to say as a small population sitting on the better part of a continent full of natural resources & reaping all the benefits from big-anglophone-buddy-to-the-south's military empire (markets and 'shield) with little more than token skin in the game (158 casualties iraq, but total coalition of the willing bro').
for whom are you denuding your carbon sink boreal forests to extract tar sand oil, you hoser?
He won't be invited to be on CNBS anytime soon. BooooYaaaa!
Are you kidding, that dude is looking to get Breitbart'ed
In french the message and emphasis isn't about just the US though. listen closely.
Assuming the owners could afford these payrolls without all of the welfare they receive in the form of cheap/free facilities and tax breaks, then there is nothing wrong with entertainers known as professional athletes earning millions.
The ability to attract millions of eyeballs has a market value. How much do you suppose people would pay to watch you run around and play?
He is not arguing againts your point. The wages of ballplayers is a "yardstick of civilization". Much like soap.
so soap is b.s.?
"Dr. Wrong"
I junked you. Try watching Fight Club dumb @ss.
Not getting the "soap" reference on a blog where the headmaster is "Tyler Durden" is pathetic.
Tabernac!
Wow a rare act of truth from a politician! Do we perhaps have an awake one here?
http://schiffblog.blogspot.ca/
Except they say one thing and do the opposite. Notice how he points out all the bad things the American government did, but does not point out that his own Party did the exact same things.
"through debt interest alone, soon the US taxpayer will be funding 100% of the Chinese Military complex."
Now it's making sense.
forewarding to 2020, it would be like America funding all the armies in the world and keeping the largest army itself...
reminds me how the English Empire which was even bigger and more powerfull fell...
check English history of the 19 hundreds to 1960's..... poor poor poor poor... only the elite had food and all the rest worked for their daily bread.
the once great english empire was no more. and still they haven't recovered. it's still as bad.
it's all to late. it's over. and let's not forget that the speaker didn't even mention rising interest rates....
In 2020, American taxes will fund every country in the world besides their own.
Is it a patriot who thinks this is normal or is it a patriot who faught and died to get to this point?
none shaml ask questions.... and nobody does.
everybody protests... to get more money.
Nobody protests to stop handing out money... which everybody in the end will need to repay.
By 2020... chinese will claim American territory... and America will hand it over to them to kick the can down the road for 5 more years....
and people will celebrate the president who does it... as he kicked the can one last time...
I wonder how much a 2012 iPhone will be valued in 2020....
will it be by the plastic content or the silver grains that are inside?
America has one advantage over the rest of the world. Its agro industry and it's resources, but what advantage does it have when it sells those?
it's laborforce which will be under total control by the militairy?
reminds my of china in the 90's... when we made deals with the chinese militairy to supply us cheap labor forces. cheap labor forces who worked 16 hours a day, 7/7.
And that's what's comming to the American people when debts need to be repaid. American cheap labor forces.... who live in cardboard houses build on quicksand.
The USA isn't making it to 2020.
The USA has plenty of guns. It will be here for a long time.
Pierre, talk is cheap you ungrateful douchebag.
An Obamaphone and mortgage for everyhome buyer, its a right, and if you dont give it to me, NO Doc, Ill sue, for discrimination....LOL
hows that RE investment going for you?....Realtors and Banksters...anyone hanging?
if ballplayers are overpaid, you're a hypocrite no matter what you do for a living.
It all started here, and ends here:
http://www.youtube.com/watch?v=2ssrcD5GdPQ
i enjoyed the videos.. very enlightining. two thumbs up
Isn't Canada just another welfare state?
Life's easier when you don't have to fund a military.
They get to sit in their igloos and smoke dope while we protect them.
It's nice to have powerful friends.
http://www.angrysinner.blogspot.kr/2012/12/yesterday-we-went-to-burger-king-for.html
Oh Please. Canada isn't even a real country. Fuck Canada.
How about multi millionaires Kim Kardasian and Honey Boo Boo. Whe are doom-doomed!
kettle might want to be careful calling the pot it depends on entirely black....
Well, they have to start somewhere, and externalization is far more popular than introspection.
He can say it where no American politician would dare. It's refreshing to see such talk outside Zero Hedge. Maybe tinfoil is going mainstream. If this keeps up you may see the truth on the mainstream media one of these days.
The truth will be told post collapse in the media's no-one-could-forsee type analysis.
It was Bush's fault.
Yeah and free markets too.
Meanies!
More regulations will solve this problem, comrade!
There is law for every problem out there, you just need to put it on few thousand pages of paper.
Forward!
None of this financial stuff is worth bothering over. There are gay people getting married and TV shows to watch.
Yes Kevin the Canadians should be terrified of the protectionist government they depend on so much... perhaps the Americans will throw another lumber tarrif at 21% on or steal some more water or create more imprt taxes deemed illegal under the Free Trade agreement.... Canadians have the foresight to see trouble and are quickly finding other trade partners - given a few more years the only thing besides cable channels Canadians will share with the Americans will be a border and in typical US fashion a tank wil roll north demanding more of their natural resources and poutine.... nough said.
Canada solved that problem once before...I believe fire and a white house was involved, and I am sure others are thinking along similar lines now.
The American Canadian dream.
Pierre Poutine nails it.
Wait a minute... Canadian?
I know! And they like to put mayonnaise on french fries too!
Gravy.
Vinegar. This french boy is a good fiscal analyst but doesn't say a word about the incipient Police State growing daily here in Kanuck Land . Those superbly uniformed mounted police have an inflated above par sadistic streak.
You took a wrong turn near Brussels...
And a big LMFAO @ Canada's broke-ass, welfare state, socialist, cradle-to-grave, system of unsustainability, that's been existing thus far on a massive housing bubble & commodity sector miracle that's allowed their central planners to kick the can thusly with thrustly, which already has begun to see its manufacturing base contract (and it will only get much worse; look at the collapsing automotive sector in Canada, from Oshawa to Brampton) -- preaching fiscal gospel.
Good luck with your model of economic growth and fiscal prudence going forward, in the brave "new normal" world that's just begun to tear at the seams of your system, Canadistan, and a Happy Boxing Day (and many more) to all Canadian pensioners and retirees, too.
My sentiment exactly. Aren't they sitting on a housing bubble of epic proportion themselves?
When the US housing market blew up like an exploding cigar a lot of people predicted the same for Canada (including me).
That was 5 years ago and we are still waiting. Around here, the market dipped 5% or so for 2 months then recovered. Once I found out what was really behind the US collapse, and found out the same shenanigans were not going on in Canada, I got back in the market and am doing fine.
Vancouver and Toronto are special cases especially Vancouver. A house that sells for $175000 in my local market, that has dropped from $450000 to $250000 in California, is $1000000 in Vancouver.
I can see where they are all really worth $150000 but will not insult your intelligence by pointing out who gets hurt the worst if the world comes to its senses.
Yes, it will be different this time, blip dee da blah blah.
The Vancouver/B.C. housing market is being floated by MC's legacy mad skillz (now doing "God's work" at the BOE), asians (many from abroad) investing their money into "it's never been a better time to buy a bubble" housing (with huge carrying costs), and B.C. Bud grow house operations (many of British Columbia's rooftops & windows are a beautiful & warm hue in the lens of the aerial, infrared cameras).
The BoE job starts june 2013 I think so you've still got him for a while yet.
They are sitting on the same faulty models that the entire "civilized" world sits on. It just hits different areas, with different symptoms, at different times... with the same inevitable conclusion. IT WON'T WORK.
All nations and bureaucrats are BUSY deciding how to "fix" the consequences left in the wake of the ponzi-growth model.. while NEVER disturbing the model itself! The plebes cheer the results, often nationalistically, with no understanding of long term effects... Particularly when these "results" are instantaneous.
Hi name POUTINE is the name of a heart stopping treat in canada.....Here is Dame Edna commenting on POUTINE.
http://www.youtube.com/watch?v=YV6Q4Q9u1pU
The strength and growth that has been continuing in Canada is going to end but alas it has helped me buy more PM's over the last several years - so when the party does end at least I have been able to add to my stacks and pay off debt.
It is true that no team from Canada has won Lord Stanley's Cup since, what, les Habitants in 1993 (thanks in large part to Tim Thomas)?
Well, they've still got their coveted "sport" of curling.
23 roster spots - 17 Canadian players on the Bruins in 2011 and 15 on the LA Kings in 2012... thank God for curling....
Well played.
Truth is sunshine - you should hire a fact checker. Canada is RICH in the untapped natural resources many on this board crave and tend to maintain a bullish attitude toward - ie. gold, silver metals... the only fear Canadians need to be aware of is the very real threat that the US will elect another Bush who will see fit to bring an arsenal of WMD's to the border and demand the American share of the oil, gas and hell why not take the metals for good measure. Time you woke up and smelled the proverbial coffee.... there is a huge economic crisis in the world today and the root cause of it is American - from American greed - to American bullying - to downright American thievery.... while it may be unpopular amongst the redneck economists who troll this site, the best thing that has happened to the American people in years is the election of Barrack Obama -he might not be the saviour of the economy but he sure as hell looks great pissing in the wind of the shitstorm he was given by the teabagger retardicans whose mandate is so sickeningly clear that the ENTIRE world cheered when Obama was re-elected - wait the entire world minus the die hard retardican members whose bitterness will never be abated.... you my friend have a truly blessed holiday and remember, Canada is truly a proud nation and owns all the nice things you crave, there may come a day when we just take our ball on go home.
I have my facts in order, and I have nothing against Canadians on a personal level. Just because the U.S., U.K., Japan and almost every EU member state is de facto bankrupt (due to the fractional reserve Ponzinomics/fiat charlatanism), doesn't mean that Canadistan is going to fare any better, since its being run off the same model.
Canada is the Australia of the west, and both Canada & Australia will see their economies tanked by the exact same forces.
Still buying into the Red/Blue thing are you?
You might want to drill down more than a half inch.
Please...if you live in Ameristan you have nothing to say...because as rediculous and piss poor as our welfare state is...yours is wayyyyyyy worse
What makes it worse is being mistaken as an Amerikan when travelling.
Canada has Red Green. The Benny Hill of the Klondike. They are good at making fun of simple truths.
Are you trying to tell me that Handy Man's Corner isn't about reusing old junk around the farm?
Good thing you told me while I've still got ten fingers!
Red Green is the truth. Just travel to northern ontario and discover its hardly a parody
We're all in togeather
Keep your stick on the ice...
Bernank is missing a roll of duct tape. You need QE Infinity and a roll of duct tape to fix the economy.
Sorry, you're wrong. A factory producing duct tape 24/7 and Red Green & a million more like minded individuals can't patch/fix this problem. This world-wide problem has to be completely broken down & finished before we can start over & hopefully we can re-build something that actually works. And all the assholes that are perpetrating this current mess arn't willing to move on. I cannot see any way forward that this does not get FAR worse before we start to see solutions & improvements in our living situation.
gotta blame the Rothschilds here and just about every other of society's ills
That was a nice and inspiring speech too bad politicians(at least some of them) decide nothing(as they can be to some degree held accountable), the bankers decide everything.
Canada deserves it's recent economic "prosperity" almost exclusively to it's natural resources not it's conservative government.
One almost wonders what those natural resources are being traded for...
Deport him for telling the truth like Piers from CNN. Oh wait, he is in Canada. Ok well then work with the Canadian govt to deport him from Canada.
Yeah and Canadians have been so economically responsible and it could never happen there. LOL!!! Housing always goes up, right Vancouver?
Totally correct Thompson. Consumption debt has skyrocketed in Canada. Our near ZIRP is destroying savings and dislocating capital as mispriced risk from the price fixing of interest rates has created an environment of moral hazard that will be difficult, if not impossible, to correct before too many people are on the wrong side of the boat......again. We can surely thank Carney for berading Canadians to stop borrowing, stop spending, yet holding rates that encourages the exact opposite behaviour he arrogantly denounces. Britain can have him.
There is no doubt that we have a housing bubble in Canada, but, it is tempered by strong, or, relatively strong financial regulations that, so far have limited exposure to and the effects of moral hazard. We can also be thankful for a commodity boom that has induced a wealth effect and a migration of people from other parts of the world bringing with them, their skill sets, their innovation(s), and their initiative. We may actually muddle through this if we don't join in on the race to the bottom of currency debasement ponzi seemingly occurring almost everywhere else.
Time will ultimately tell.
Bingo. Just keep borrowing. That's the ticket. 150% and growing. That's worse than Americans.
The Carney Housing and Consumer Debt Bubble are sure to pop.
The irony Bay, is that, try telling Canadians that stat and they laugh at you and they say, "come on, its not that bad." Every time I hear something like this that echoes "this time is different", or, "it can't happen here", I walk to the nearest bullion dealer and buy another round. cheers.
sigh. again with the fannie mae crap.......that thing was moving at a snail's pace until blythe and her rocket scientists figured out how to light the neutron bomb of derivatives......jesus.....does this crowd get off scott free forever???????????????
On a long enough timeline...
I'll be posting a petition at the White House website to get this guy deported, STAT!
Wait, he's from Canada and he's arguing against Government involvement and intervention?
Does not compute.
He has some good points but if Canada had to survive on it's own without drawing blood and nutrients from it's proximity to the U.S. they would be Greece or France or worse.
probably Bolivia
The canada you speak of was the canada that fought WW1 and WW2. We would be alright.
Um...o.k., Canada and the U.K. would have been just fine without the U.S. in WWII and beyond.
*COUGH*
(excuse me)
I was speaking for the quality of the men that canada provided and the quality of their contribution. Its -21C outside right now. We are capable people.
We all know who lost the war.
There is a difference between a safety net and a hammock. As such things go, Canada has done a good job of protecting its citizens without bankrupting them. Canada may be in debt but not near as bad as most countries, thanks to a period of voluntary austerity and a pullback in government spending under Chretien in the nineties.
I would be interested in knowing what Canada gets from the US. I know the US gets massive amounts of oil, lumber, and other natural resources from Canada and gets them cheap. Can you tell me what the US has ever given Canada?
Acid rain, draft dodgers, and some Gramophone Awards.
A market for their goods. $$$$
lots of hollywood productions employing canucks
Pax Americana, such as it is.
Money for nothing and your chicks for free.
"Soon the US taxpayer will be funding 100% of the Chinese Military complex."
Unless the dollar doesn't buy even dog shit.
Using what GDP measure and what inflation number?
"Hi China, time for an interested payment? Let me create some ones and zeros for you....here you go."
<sarc>
When McD's is offering the $5 value meal, we wont care about interest.
</sarc>
"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless."
-Shhhh... this type of out-loud thinking could really confuse the sheeple.
you canucs keep pissing of Obama, he'll never approve Keystone pipeline, and you'll be forced to sell all your oil to the Yanks at reduced prices!
and by the way, YOUR central bank is run by ex-Goldmanite, and YOU pretty soon will be speaking Mandarin. At lerast the area around Vancouver.
He already didn't approve it, the Chinese stepped in and bought the oil instead, Carney has moved to England, and Vancouver has been a suburb of Hong Kong for 20 years.
Try to keep up.
Canadian speaks, everyone listens. Wow.
Stevie will fire him. Stevie has moved too much to the left.
The man is born in Calgary but represents Ontario, close to Ottawa.
This man has a lot of guts.
Nice speech though.
.. as long as you don't take it too seriously ;)
No. But I'd like to take in seriously.
But Brawndo has electrolytes.
I liike money.
"Why you no have tatoo?"
Apologies for going off thread, although I have a question that's not totally unrelated: Does Social Security add to the US government debt, or not?
In reading comments in a story over at the times, I see the oft regurgitated idea that only mouth-breathing fascist nazis would think that social security payments are, at this point, in fact a net debit as to tax revenue.
My understanding is that it hinges on whether or not you view a treasury as an "asset" when ledgered as such on the SST's books.
I've had arguments with very smart, very liberal statist types who are convinced that the government can loan money to itself, spend the money loaned... and it's still an "asset" even though, ultimately, unless the fed prints money to buy it, when those treasuries are cashed in, that cash comes from new taxes.
But Robert Reich {not to mention Krugman} are absolutely adamant that the SS Trust fund is solvent, at least for the next 20-25 years or so, even though its only assets, essentially, are treasuries.
so then - am I in fact wrong/stupid about SS adding to the debt, or are they?
Dollars are completely fungible, so it's not like there's a simple clear bright line between ONE budget item that "adds to debt" and some other that does not.
The idea behind the claim that SocSec doesn't add to debt is that FICA revenues exceed SocSec payouts.
This was true for a long time, but I don't know the exact status today--it's probably currently revenue-negative because of the temporary FICA cut and the dismal economic conditions. Obviously, the fewer folks on payrolls, and/or the less folks on payrolls EARN, the lower the revenue from FICA will be.
The thing is, it doesn't matter so much whether SocSec SPECIFICALLY is currently funded or not--everyone acknowledges that there are certain to be more retirees and recipients than employees paying FICA at some point, so it's just a question of exactly *when* gummit starts adding that expense to the debt.
For a long time, FICA generated more in revenue than was being paid out, so money that (in theory) could have been "saved" for future expenditures was just added to the general revenue fund and used to finance other government efforts, including things like wars and tax-cuts. At that time, one could more plausibly make the case that "SocSec doesn't add to the debt."
Treasury department estimated the Net Present Value of Social Insurance obligations and revenues for Sept. 30, 2011 at -$33.83trillion, versus -$30.86 trillion the previous year.
http://fms.treas.gov/fr/11frusg/11stmt.pdf
Not that that's at all relevant to the question as asked, of course. "Net present value" is a projection--it's not a meaningful figure that applies in this context.
"Social Security" refers to the money paid to folks past retirement age and their family members to maintain survival expenses. "Social Insurance obligations" includes Medicare, which is largely unfunded.
That's a major detail to try to gloss over.
Then to answer your question of "*when* gummit starts adding that expense to the debt" - *NEVER* - provided that unfunded future government liabilities remain unaccounted for in the deficit as publicized.
However, projection or not, future liabilities that are not accounted for in current budget accounting eventually do catch up to a cash-strapped government.
Clinton was credited for balancing the budget in the 1990's in spite of an annual increase of unfunded SS liabilities of several hundred billion$ per year. Now those liabilities are hitting the cash statements while Clinton has safely out of the picture.
As you can see from the link, federal gov't added about 3trillion of unfunded liabilities in 2011 to its 1trillion cash deficit. Any wager as to when the U.S. gov't will voluntarily go to full accrual accounting?
"*when* gummit starts adding that expense to the debt"
Well, it's all just rhetoric, but there's a way to understand that this is not an accounting issue. It's a question of whether the SocSec payments are currently funded by the FICA revenue or not. Medicare and other programs are ALREADY inadequately funded by a large margin.
My point is like this: say you have a minor extortion ring, and you rob Louie every week for your cigarette money, which is $10/week. Your other victims may give you more or less money, but as long as Louie comes through with the $10/week, you can say "My cigarette expense is *funded* by Louie, so cigarette spending doesn't add to my debts."
If prices go up or Louie stops having $10/week you can steal, your cigarette expenditure has to come from elsewhere, so you'd then have to buy smokes "on credit," which would add to the debt.
Because of the fungibility thing, though, you're EFFECTIVELY correct--if the gummit spends more than it takes in, I don't see much point in worrying about whether it calls some taxes "dedicated" or not--I'm just describing the mechanics of how some folks could *claim* that SocSec doesn't currently add to the debt.
As I see it, if gummit is adding to the debt, you're fully justified in blaming EVERY SINGLE GOVERNMENT EXPENDITURE for it. So the pensions for retired Congressmen are "just as" responsible for an increasing Fed debt as foodstamps or kerosene for fighter/bombers.
Mental accounting is the term for the cognitive error people use when they say social security doesnt add to the deficit.
Just wait until social security tries to unload all that government debt it owns.
What do you think selling more treasury bonds will do while we are selling other treasury bonds to fund record government deficits?
Think it through people!
Lets have obama present a one trillion dollar platinum coin to the Fed lol
There's no need to sell any of those bonds--we don't sell our bonds NOW, so why bother with those?
They'll just print the money, same as now.
Yep greenspan said he could guarantee a certain number of dollars at a future date or a certain value of the dollar, but not both.
Nominal fools the sheeple everytime.
Keep stacking, my friend.
"But Robert Reich {not to mention Krugman} are absolutely adamant that the SS Trust fund is solvent"
They are economists, not accountants. So what the fuck do they know?
He's just pissed because the NHL isn't going to have a season and nobody in the US gives a shit.
Drop Ze Puck, eh?
Nicely said to sole super power
does this guy realizes there'll be no place his great country's exports if US and EU goes bankrupt ?
China will be needing every natural resource it can find and lots of them can be found in Canada.
I don't see in the clip where he says that US/EU bankruptcy would be a good thing.