This page has been archived and commenting is disabled.

Stanley Druckenmiller: "We Have An Entitlement Problem" And One Day The Fed's Hamster Wheel Will Stop

Tyler Durden's picture





 

Two and a half years ago, George Soros' former partner Stanley Druckenmiller closed shop when he shut down his iconic Duquesne Management, after generating 30% average annual returns since 1986. Some time later he raised many red flags by being one of the first "establishment" types to expose the Fed's take over of the market when he said in a rare May 2011 interview that "It's not a free market. It's not a clean market.... The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week." This was in the context of the constantly declining interest rates on an ever exploding US debt load. And while back then total debt was a "manageable" $14.3 trillion, as of today it is some $2.3 trillion higher moments ago printing at a fresh record high of $16.6 trillion, not surprisingly the phony buyer is still here only now he is buying not $19 billion by over $20 billion in total debt each week. But just like it was the relentless rise in the US debt that forced him out of his privacy in the public scene back then, so it was also the US debt that was also the topic of his rare CNBC appearance today (where he fiercely poked at all those other TV chatterbox pundits when he said "money managers should manage money and not go on shows like this") in the aftermath of his recent WSJ Op-Ed. There, he once again said what everyone knows but is scared to admit: "we have an entitlement problem."

Druckenmiller's definition of the problem:

The media was more concerned about the fiscal cliff and what might happen to the economy over the three months than the big picture which is the debt which is going to swallow our kids in 15 or 20 years. They totally take a pass on entitlements which is the problem. And the president comes out and says i'm not going to do this on the back of seniors. Those seniors, that we put out in the article, are all taking out more than they put in, and it's guaranteed under the system today that all the kids are going to get less than they are putting in...  the reason we're here is I think we have time to deal with this issue. If we don't deal with it in the next four or five years, we'll wake up and interest rates will explode and the next generation will have a very, very tough time and it's so unfair.... In 1994 entitlements were 50% of federal outlays, up from 28% in 1960, but to my horror under the George Bush administration they went from 50% to 63%. Now at 67% of all federal outlays are entitlements. To put that in perspective, if you look at the actuaries out there, entitlements are scheduled to grow $700 billion in the next four years just due to change in entitlements. That's as the demographics kick in.

A quick primer on the unsustainable Bernanke math:

If you normalize interest rates, i'm not talking about a spike, just normalize where they were before QE and took them to 5.7% federal funding costs of the debt, that's $500 billion a year in interest expense that goes out door. We're having a heart attack over an $85 billion sequester when we can lose $500 billion just if you normalize. The way markets work if and when that were to happen, you don't normalize, you keep going because the market figures out that you now have a credit problem which is exactly what's happened in the foreign nations.

A reminder on the irrationality of bond markets:

The bond market is a funny thing. In Greece the bond market was perfectly fine until February of 2010. Not moving, not doing anything, and then in two weeks it was over.

The topic of the free Fed money's diminishing returns is well-known:

The market is fine because you've got all the free money in the federal reserve. But that can only last so long. Eventually the hamster can't move on the wheel anymore and the free money has less and less impact.

His solution: means testing:

Means-test people like me on social security. You realize I've done all right in life, okay? I'm going to start getting social security checks in five years. It's absurd. And i'll get the same social security checks that some people who have not done so well are. And the same thing with medicare. Raise the ages, as I pointed out earlier. When all this stuff was started, life expectancy was way below where it was now, and frankly probably the guesses on life expectancy where they are are too low. It's not that hard.

Finally, on political incentives to act, or rather not:

... Congress is not getting the market signal we talked about in the article so you can scream all you want about congress and the president being clowns, I can't think of any political system anywhere where they acted without interest rates going up. When did greece act? When the bond market blew up. When did Spain act? When the bond market blew up. What was Clinton's response to Rubin, "you mean the f'ing bond market is in control." Doing what they are doing the politicians have no incentive, but the market is a very fickle and violent thing. I don't think it's today, but we've got 3-year-old kids we've promised we'll get them through college and once college is done we'll get them a job. it's going to happen before those kids.

But of course, the merest suggestion of any of the above becoming policy and whoever is in charge screams bloody "austerity" knowing full well their political career is over the moment people's entitlements are cut.

And thus: back to square one.

The full clip follows below:

And for those who missed it, here is the WSJ op-ed from a week ago penned by Stanley Druckenmiller and former Fed governor and current Fed critic, Kevin Warsh:

Generational Theft Needs to Be Arrested

A Democrat, an independent and a Republican agree: Government spending levels are unsustainable

We come from different backgrounds, parties and pursuits but are bound by a common belief in the promise and purpose of America. After all, each of us has been the beneficiary of the choices made—and opportunities created—by previous generations of Americans.

One of us grew up poor in the South Bronx of the 1960s and went on to lead a children's antipoverty program in Harlem. Another grew up in a small town in South Jersey, and went on to be a leading money manager. The third grew up in a small suburb in upstate New York and found his way to serve in the government amid the financial crisis.

One of us is a Democrat; one, an independent; another, a Republican. Yet, together, we recognize several hard truths: Government spending levels are unsustainable. Higher taxes, however advisable or not, fail to come close to solving the problem. Discretionary spending must be reduced but without harming the safety net for our most vulnerable, or sacrificing future growth (e.g., research and education). Defense andhomeland security spending should not be immune to reductions. Most consequentially, the growth in spending on entitlement programs—Social Security, Medicaid and Medicare—must be curbed.

These truths are not born of some zeal for austerity or unkindness, but of arithmetic. The growing debt burden threatens to crush the next generation of Americans.

Coming out of the most recent elections, no consensus emerged either to reform the welfare state or to pay for it. And too many politicians appear unwilling to level with Americans about the challenges and choices confronting the United States. The failure to be forthright on fiscal policy is doing grievous harm to the country's long-term growth prospects. And the greatest casualties will be young Americans of all stripes who want—and need—an opportunity to succeed.

Three main infirmities plague Washington and constitute a clear and present danger to the prospects for the next generation.

First, the country's existing entitlement programs are not just unaffordable, they are also profoundly unfair to those who are taking their first steps in search of opportunity. Social Security is one example. According to Social Security actuaries, the generational theft runs deep. Young people now entering the workforce will actually lose 4.2% of their total lifetime wages because of their participation in Social Security. A typical third-grader will get back (in present value terms) only 75 cents for every dollar he contributes to Social Security over his lifetime. Meanwhile, many seniors with greater means nearing retirement age will pocket a handsome profit. Health-care spending through Medicare represents an even less equitable story.

The government has an obligation, of course, to support needy seniors. But this pension system is ripe for common-sense reforms, including changing eligibility ages and benefit structures for those with greater means, ridding the Social Security disability program of pervasive fraud, and removing disincentives for those who would rather work in their later years.

Powerful, vested interests portray reformers as avowed enemies of seniors. But, the status quo is, in fact, tantamount to saddling school-age children with more debt, weaker economic growth, and fewer opportunities for jobs and advancement.

Second, while many in Washington pay lip service to the long term, few act on it. The nation's debt clock garners far less attention than the "fiscal cliff" clock. Elected officials continue to allow the immediate to trump the important. Washington appears poised to forego fundamental reform at the altar of the expedient, yet again. This could have tragic consequences.

In successive administrations, the country has spent trillions in temporary tax credits and short-term "stimulus" to goose growth by the next election. What do we have to show for this spending surge? Modest growth, declining incomes and a level of national debt that undermine our long-term prospects.

The Federal Reserve's policies reinforce this short-term orientation. To offset weak economic conditions, the Fed's principal policy objectives appear to be twofold: suppress interest rates and raise stock prices. As a result Congress may be missing market signals and failing to see the costs of its spending addiction in time to undertake real reforms. Ultimately, economic fundamentals—not the promises of central banks—will determine the prices of stocks and bonds.

But the deeper failing is one of essential fairness. The benefits of rising stock prices accrue to those who have already amassed wealth at the expense of those who are struggling to save. And failing to deal with runaway spending will burden the country's children with higher interest rates and a debt bomb that will come due in their lifetimes.

Third, too many politicians appear more eager to divide the spoils of electoral victory among their own than to increase the size of the economic pie for all. The grab-bag of special tax favors under the guise of the recent fiscal-cliff deal is only the latest example.

Crony capitalism and corporate welfare aren't just expenses we cannot afford. They are an anathema to economic growth. They deny opportunities to aspiring people and companies who seek to better their lot. They ration opportunity based on things other than merit and hard work. They further ensure that poor children—who already are disadvantaged by failing schools, inadequate health care and little access to necessary resources—will never get the chance to break the cycle of generational poverty through education.

Some individual Americans are surely better off than they were many years ago. The more probing question is whether America is better off. That can only be true if the hopes and aspirations of the next generation are achievable.

The country must find the courage, conviction and compassion to fix what ails it. The opportunity to advance real reform is still possible. But failure to reform the entitlement culture, reaffirm long-run objectives, and re-establish a common purpose will mean a dimming of opportunities for American children today and for future generations. And a great nation will have ceded more than its greatness, but its goodness.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 02/21/2013 - 22:24 | Link to Comment thismarketisrigged
thismarketisrigged's picture

does anyone have the same feeling as me that the fraudsters who run this market will try to pump it up as hard as possible tomorrow to either minimize this weeks losses, or completely wipe them out?

 

the dow is only down 95 or so pts for the week, and the s&p is down i believe 18 or 19 pts for the week. is it unrealistic to think these fuckers will make sure we end far in the green, or either minimize the weeks losses?

 

i hope i am dead wrong and the dow falls 300 plus tomm with the s&p falling 20 plus, but i have a feeling these assholes will make sure to do whatver possible to pump it green tomm

 

hope i am dead wrong

Fri, 02/22/2013 - 05:28 | Link to Comment Oldwood
Oldwood's picture

They are pumping everything else, so why not. We bemoan the printing of money and the variable value of fiat. Stocks are just pieces of paper too that have an infinetly variable value dependent totally on what any irrational person places on them. Those who own the casinos know the chips are worthless but they will do what the must to lure you into buying them just the same as in any other ponzi scheme. And everyone knows its a ponzi, they just all want to "time the market" so they can get out before it collapses. Good luck with that!

Thu, 02/21/2013 - 22:28 | Link to Comment Abrick
Abrick's picture

Hey, the bankers normalized theft and fraud, look how well it worked out for them. The 'entitled' have normalized a lack of motivation and sloth, it's paid off in spades. The working class have normalized fucking each other over, that one still needs some work.

Thu, 02/21/2013 - 22:29 | Link to Comment Handful of Dust
Handful of Dust's picture
About 1,700 Texas inmates received unemployment

 

The Associated Press

HOUSTON —

Officials acknowledge the state paid nearly $3.4 million in unemployment benefits to Texans behind bars over the last four years.

Inmates aren't eligible for unemployment payments because those filing for benefits must be available for full-time work.

 

http://www.statesman.com/ap/ap/texas/texas-inmates-received-millions-in-...

 

Your tax dollars hard at work!

Thu, 02/21/2013 - 22:30 | Link to Comment Atomizer
Atomizer's picture

Nothing to see here folks, just move along. /sarc

St. Louis Adjusted Monetary Base - BASE

Thu, 02/21/2013 - 22:32 | Link to Comment Sutton
Sutton's picture

Exterminate the fed

Thu, 02/21/2013 - 22:44 | Link to Comment Atomizer
Atomizer's picture

5,4,3,2,1   Beeeeeeeeeeppppppp

Emergency Broadcast Network - Comply

 

Thu, 02/21/2013 - 22:42 | Link to Comment ziggy59
ziggy59's picture

OT: maybe gold bank is visible..London, from above: Record-breaking 320-gigapixel interactive picture of the capital that lets you zoom in on streets and buildings 20 MILES away

Read more: http://www.dailymail.co.uk/sciencetech/article-2282054/320-gigapixel-int...

Wont work on apple

Thu, 02/21/2013 - 22:45 | Link to Comment Spastica Rex
Spastica Rex's picture

Crony capitalism and corporate welfare aren't just expenses we cannot afford. They are an anathema to economic growth.

Finite systems are anathema to economic growth.

Fri, 02/22/2013 - 05:21 | Link to Comment Oldwood
Oldwood's picture

Human imtelligence if finite, its stupidity is not.

Thu, 02/21/2013 - 22:48 | Link to Comment lasvegaspersona
lasvegaspersona's picture

Utter horseshit

Every program the government starts it underfunds and overspends to keep the voters happy.

In the next itteration of the dollar I suggest every 'program' be put out for bid by the private sector. NO government involvement....like life insurance...

and what even greater horseshit for the rich guy to point out that he does not need Soc Sec. . Every sane person has calculated the benefits of SS and Medicare into their retirement plans. The only 'fair' way to resolve these issues is to pick an age and say "everyone under age X is on their own, you must buy your own retirement...cuz we (the govt...) will just screw it up like we ALWAYS have."

Governments ALWAYS do this, IT IS THE PLAN!!! Screw the elderly when the ponzi fails. And screwed they will be....but not by 'fixing entitlements' they will be screwed by inflation and financial repression and most likely hyperinflation....cuz that is how it is always done CUZ THAT HAS ALWAYS BEEN THE PLAN....just ask any actuary...these things are easy to see a mile away....political will is the will of the people via the vote....and we voted to screw ourselves our parents and our kids....only we didn't know it because the politicians that did kept quiet.

Thu, 02/21/2013 - 22:52 | Link to Comment besnook
besnook's picture

entitlements are part of the problem. labor has no right to a retirement. they take minimal risk to work for the risk takers. .gov workers take almost zero risk and are rewarded the best. risk takers(self employed, small business owners) take the most risk but are rewarded the least. i agree the entitlement programs need to be reformed.

the other side of the chart needs to be addressed, also. corporate welfare is designed to reduce risk and increase gains for the wealthiest people and companies. all the insolvent banks along with the bankrupt companies bailed out by the tax payer should have dissolved along with their bond and shareholders'. making mega corps risk free is just as egregious as rewarding risk free employees with something for nothing.

so labor should work until they die or can afford retirement on their own effort and business should not be protected by regulation, tax benefit or bailout directly or in the form of subsidies afforded by tax payers. people willing to take risks as self employed or small business should have that risk rewarded in the form of decreased tax liability personally and corporate.

Thu, 02/21/2013 - 23:30 | Link to Comment JR
JR's picture

Nobody asked Americans if they wanted to "contribute" to Social Security. The problem dealing with Social Security is that the government made it absolute mandatory; the government forced people into it. It was a direct order; they would put you in jail if you didn’t respond. They still will.

And now the politicians and the billionaire elites such as Druckenmiller and Robert Rubin, when it’s time to pay up as boomers finally stop paying in and start to collect for the next 20 years, say it’s too much.

It wasn’t just a promise. They were ordered to turn over that money to the government; and then the government was going to take it and hold it in an interest bearing trust and make it good for everybody.

Well, it was a dirty filthy lie. But I’ll tell those pols and busy body elitists one thing; Americans perceive that money as theirs: it was promised on an order so pay. And the pols better pay up. Bring back some of those 1000 military bases, stop spending all that other money that wasn’t promised on welfare for illegals and banker and corporatae largesse such as taxpayer subsidies and bailouts, including trillions on wars supported by the Druckenmillers and Rubins for Israeli aggression with the occompanying war-on-terror surveillances of Americans at home and for resource confiscation by and protection for the multinationals and their global investments.

These people have their priorities wrong. So some people may collect more SS than they put in. But how about those people who die and don’t collect any?

And to come from this rich, rich, rich guy - the 149th richest man in America! It’s not going to hurt his kids. Why doesn’t he worry about his own kids and let working Americans worry about their own?

It’s insulting to the low information people on ZH that the no-information people here are speaking their minds and agreeing with this banker profiteer as he contemplates his navel and 30-percent-a-year profits.

Fri, 02/22/2013 - 01:25 | Link to Comment besnook
besnook's picture

look, this is the way things are. labor acts like a hapless bunch of fools oppressed by the man but are unwilling to do anything about their plight except moan about it. social security was never meant for what is expected of it today. a person wasn't suppose to collect it for decades. in fact, it was expected that most would never reach the age to collect it. if it was returned to it's original intent as druckenmiller proposes then the fund would be solvent.

as i stated in my original post, what is good for the goose is good for the gander. that is where he loses me. if you are opposed to .gov subsidized labor then you must be opposed to .gov subsidized business.

in the meantime, it is unbecoming of labor to whine about their plight. fight for what you want or accept your fate and shut up already. i haven't paid social security taxes in more than 20 years. i will be collecting on my wife's more convential earnings, however. i(we) beat the game. if she had taken a no risk .gov job in her profession we could have retired but we need health insurance. is it fair that a no risk .gov job pays more in retirement than a guy like me who has risked everything every day to earn a living for myself and others when i could have flown a desk at some no risk .gov position and retired with a millionaires' income on the backs of tax payers at a young age? it isn't but that is the way it is.

the forgotten part of the free market is the fight for self interests. labor doesn't understand, has forgotten, and/or is too stupid for the fight. my self interest says that is a good thing. the more money i can make on a wetback rather than a weak kneed complaining hipster who is unwilling to fight for his right to fight the better. that is all drunkenmiller said. i have to agree.

Thu, 02/21/2013 - 23:48 | Link to Comment Cabreado
Cabreado's picture

It's interesting that you have a hard time referring to "labor" as "people" too.

Thu, 02/21/2013 - 23:04 | Link to Comment yellowsub
yellowsub's picture

It's good to be rich or poor. 

Thu, 02/21/2013 - 23:09 | Link to Comment Gamma735
Gamma735's picture

Finally, some reasonable attempt at truth.  Boomers screwed us over.

Thu, 02/21/2013 - 23:52 | Link to Comment Cabreado
Cabreado's picture

Sleep well, knowing you've got it all figured out.

 

Fri, 02/22/2013 - 02:00 | Link to Comment groundedkiwi
groundedkiwi's picture

Boomers never screwed you over, we thought we were spreading the love, BUT,the PTB had long term plans we as a free people never thought possible.

Thu, 02/21/2013 - 23:23 | Link to Comment bilejones
bilejones's picture

Whenever you see these words

 

"found his way to serve in the government"

 

You know bullshit will follow.

 

And it does.

Thu, 02/21/2013 - 23:34 | Link to Comment Atomizer
Atomizer's picture

My last word for the evening..


I owe taxes every year. This time, will grant an extension. Why? This government has hired increased labor in the IRS staff, yet the tax code is not set in stone.

New Tax Codes Causing Delays In Filing 2012 Returns 

Fuck them. When the government gets their shit together to define the tax rules, you’ll get my check. Why cause an IRS audit issue if taxpayers & preparers are uncertain of new tax codes? 

Fri, 02/22/2013 - 01:55 | Link to Comment groundedkiwi
groundedkiwi's picture

But but but, we are the government. Remember that breathe of fresh air the day we voted.

Fri, 02/22/2013 - 02:21 | Link to Comment chindit13
chindit13's picture

True story:  A dozen or so years ago, some woman in California (I think she worked in a library) got a tax bill from the IRS for something like $1.1 billion dollars.  Her last name was not Drunkenmiller.  She called the IRS Hotline to get advice.  The advice she got?

"I suggest you just pay it now, then file a complaint, because if you don't pay it and you lose, the interest keeps piling up."

Thu, 02/21/2013 - 23:41 | Link to Comment web bot
web bot's picture

His comments on normalizing interest rates should make any person quake in fear. Perhaps he's sensing that something is coming and society ain't going to be a nice place to live in for a while.

What truly scares me is that there are people out there (a lot smarter than me) who "get it" and understand what is going on. So, what happens if one or more of them work together when the time is right to create a credit crisis by withdrawing/moving deep pools of money? They stand to make a killing at the expense of us all. Think my comment is far fetched, think Soros and how he broke the Pound Sterling.

This should keep us up at night.

Druckenmiller deserves some credit for speaking his brilliant mind.

Fri, 02/22/2013 - 00:02 | Link to Comment Atomizer
Atomizer's picture

This should keep us up at night.

Never fear thieves. They come from all walks of life. The ones that are being used to create Debt Saturation are just foot soldiers. During the [supposed] transformation period, they categorically believe to become part of the new system. Unfortunately, the usefulness of all foot soldiers end up as a mockingbird MSM incidental fate of death.

Thu, 02/21/2013 - 23:48 | Link to Comment H E D G E H O G
H E D G E H O G's picture

okay, read the posts, agree and disagreed, what I discern from all of this is that TPTB are getting what they want from the Divisions that they incubate between us ALL. Divide and Conquer, seems to be working as planned.

Fri, 02/22/2013 - 00:02 | Link to Comment Godisanhftbot
Godisanhftbot's picture

 Do that means testing crap AFTER I'm dead.

Fri, 02/22/2013 - 00:05 | Link to Comment Stuck on Zero
Stuck on Zero's picture

My history teacher in the 11th grade grew up with the Pomo Indians in Northwest California.  He used to tell us about his life with the tribe.  One story I'll never forget was about a tribal tradition.  This tradition prescribed that young hunters would bring their kills back to the village intact.  The elders would get to carve their meat from the animal, followed by the weak and middle agers and final when it was picked over the young hunters got what was left.  If the hunters returned empty handed but with full stomachs they would be beaten for cheating on the tribe.  It seems that occasionally a hunting party would go out and never return.  This didn't surprise the real elders.  They were hunters once, too, and that's how they founded the village.

 

 

Fri, 02/22/2013 - 00:30 | Link to Comment Lord Of Finance
Lord Of Finance's picture

Who is this Druckenmiller anyway. Just another loony. Just like that Ron Paul. 

Sheeple please! Do not listen to this crazy talk.

 

In the fed we trust, and btw, pay no attention to the man behind the curtain. AND don't follow the golden brick road.

 

  Yours falsely,

 

        Paul "Maynard" Krugman.

Fri, 02/22/2013 - 00:44 | Link to Comment hswalj
hswalj's picture

Means – testing and Social Security are incompatible. Social Security is supposedly an actuarily-based insurance plan for the nation's workers. Means-testing simply converts the plan to a welfare program. It's fine for the very wealthy to feel it should be means tested but the result for all left over folks who payed into this insurance system is to convert it to a welfare plan.

So if the country wants to means test Social security, then it should simply abolish Social Security and set up a welfare program based upon your income and resources at retirement.

The upper income earners in favor of means testing a very arrogant to me. I don't need your welfare.

Fri, 02/22/2013 - 01:21 | Link to Comment notquantumdum
notquantumdum's picture

Do you really think the "upper income earners" favor "means testing" which would limit their receipts of the "means tested" social security benefits?

I suspect you don't know what "means tested" means.

That has traditionally meant that those with "means" didn't receive the benefits.  What in the world are you referring to?

 

Fri, 02/22/2013 - 01:38 | Link to Comment notquantumdum
notquantumdum's picture

Unless I missed the good joke -- sorry if I was insufficiently snarky.

Fri, 02/22/2013 - 10:41 | Link to Comment hswalj
hswalj's picture

I am referring to ultra wealthy, liberals.

Fri, 02/22/2013 - 00:47 | Link to Comment diesheepledie
diesheepledie's picture

They should raise the SS and Medicare age to 95.

Fri, 02/22/2013 - 01:14 | Link to Comment notquantumdum
notquantumdum's picture

Unnecessary, isn't it?

 

Fri, 02/22/2013 - 01:56 | Link to Comment Teamtc321
Teamtc321's picture

They should just eliminate someone who says they need to raise SS and Medicare age to 95.

 

Don't drone me BRO!!

 

/sarc

Fri, 02/22/2013 - 00:54 | Link to Comment Me_Myself_and_I
Me_Myself_and_I's picture

It's a well-known fact that when the mother hamster gets off the wheel she turns around and eats her young.

 

Nature's a bitch.

Fri, 02/22/2013 - 01:26 | Link to Comment uncle reggie
uncle reggie's picture

Whatever "entitlement" problems we may have are dwarfed by the inequality problem. When the super rich in a society devour such a disproportionate share of the society's wealth, bad things will happen. This is the biggest economic injustice and problem facing this nation.

I understand that ZH likes to preach the gospel of the super rich and "entitlements" is the new frontier afterall. However, sometimes you guys just try too hard to sell their lies.

Fri, 02/22/2013 - 01:45 | Link to Comment notquantumdum
notquantumdum's picture

I may be wrong, but I think the "inequality problem" always seems to increase more when there are politicians directing the changes.

Am I missing something?

Doesn't more govt / Economy = less freedom = more corruption?

Does more power corrupt more or less?  Come on?  Don't we remember?

I pray that I am wrong.

 

Fri, 02/22/2013 - 02:00 | Link to Comment uncle reggie
uncle reggie's picture

IMHO, the radical increase in inequality confirms the fact that politicians, both Dems and Repubs, are owned by the super rich more than ever so yes, I agree that politicians will act in ways that serve their sponsors to the detriment of everyone else. Rather than viewing it as "more" govt, how about we call it what it really is - a fully owned subsidiary of Corporate America. This also translates into less freedom, more corruption. Power does corrupt. I just think it important to understand WHO the real corrupters are. 

Fri, 02/22/2013 - 02:19 | Link to Comment notquantumdum
notquantumdum's picture

whatever you call it, I think it was historically referred to as corporatism which was one of the precursors to . . .

Fascism, I think?

Is that correct?

Fri, 02/22/2013 - 02:12 | Link to Comment chindit13
chindit13's picture

What do I care about future generations?  What have they ever done for me?

Okay, that's being facetious, but frankly, no generation has thought about what comes next.  The baby boomers were probably the ones who first introduced this idea.  Everybody else has always just assumed the next generation (after their grandkids) plays whatever cards it is dealt.  What we inherited at birth wasn't on account of anybody taking care of either the economy or the planet with us in mind, no matter what myths we propagate about some eco-friendly previous civilizations or the probable constant use of the term "for the children" by politicians as far back as ancient Mesopotamia.

The fact, whether anyone likes it or not, is that every Administration has been dipping into the SS fund and left it chock full of IOUs.  Clinton "balanced the budget, and even left a surplus" by doing it, and Paulson and Geithner used it to "tide us over until the debt ceiling was raised" or whatever.  What has been promised is not there, and nothing can make it reappear other than more of the same financial shananigans.  However it was promised to perform, it has always been merely an insurance policy.  Everybody's house eventually burns down, but those who have another residence will just have to make do, while if there is any money in the bankrupt insurance company, perhaps that can go to those truly in need (but who have paid into the system).  Whatever I personally paid in is gone.  I always suspected it would be, so I never counted on it from the day I started washing dishes and caddying during the summer in middle school (though back then I just didn't understand what it was and why I got nicked for it). 

Is it "fair" I lost what I paid in?  Since when has fair ever had anything to do with life?  Nobody's god is fair, so why should anybody hold society or leadership to a higher standard?  SS is what it is, and what it is is a near empty box.

Fri, 02/22/2013 - 04:12 | Link to Comment unemployed
unemployed's picture

Intergenerational warfare.   LOL,  boomers are the bag holders who paid in regressive FICA taxes for 45 or 50 years and will get nothing.   The greatest generation is the one who emptied the Ponzi jar and ended up with the rest of the wealth.

Fri, 02/22/2013 - 02:18 | Link to Comment kurt
kurt's picture

In this case as with gun control: Divide and Conquer.  The super rich  keep pounding away. They want all the meat on the bones. I don't ever want to hear "E N T I T L E M E N T" it's a campaign, designed, paid for by the rich. Don't buy the presumption, buzz words, program, capaign, mind control. Jesus it's an uneven playing field. This video is pure poison, psy-op, bullshit!

Fri, 02/22/2013 - 03:47 | Link to Comment smacker
smacker's picture

Druckenmiller may be over optimistic in thinking that means testing will cure the entitlement problem. It only reduces the size of the problem, not solve it. By how much depends on individual honesty etc. And what about the people expecting their entitlements as promised after paying taxes for a lifetime to fund them?

Fri, 02/22/2013 - 04:09 | Link to Comment unemployed
unemployed's picture

Fail...  the phony buyer in 2012 was not the FRB.   FRB treasury holdings up 600 million in a 1.6 trillion dollar deficity.  Yah the FRB does the twist..  0 Notes Jan 3, 2013,  18 Billion Jan 4, 2012.  some twist...

http://www.federalreserve.gov/releases/h41/20130103/

 

Follow the money.

Fri, 02/22/2013 - 05:27 | Link to Comment FunkyOldGeezer
FunkyOldGeezer's picture

Try to understand that if there is an entitlement problem, it has been cuased by naked ouvert capitalism and its constant need to screw over those very people who create the wealth for business owners and investors. THEY have increasingly forgotten that those who work for them have an entitlement to a living wage and decent working conditions.

They exodus of jobs from the West to the East, consolidates this position. Basically, capitalism has no place for well paid workers, because that is the antithesis of competition.

Fri, 02/22/2013 - 05:46 | Link to Comment Oldwood
Oldwood's picture

We are entitled to what we can get. Fairness is a concept used as an excuse to redistribute wealth. I only "owe" my employees what we agree to. That and mutual respect. I don't owe them a decent wage or healthcare or retirement or housing or food or even a job unless we contractually agree to it. Capitalism is the bastion of well paid workers as it is the only system that can actually create enough profit to provide it. As a business owner and a capitalist, it is in my best interest to pay the best wages for the best people for that is what is required to compete. There are liars and cheats in all walks of life and in every system ever thought of. Capitalism is the best system to punish those who do lie and cheat but is defeated by chronyism and corruption. Monopolization is our enemy and our government is what is supposed to protect us from this, but instead government has become the controling monopoly and is actively picking the winners and losers. Simple, easily interpreted laws to provide a level playing field are all that is required. 

Fri, 02/22/2013 - 07:08 | Link to Comment redd_green
redd_green's picture

how about putting the ridiculous military budget back to what it was in 2000.   About 250 billion a year.  Then we can talk about fixing 'entitlements'.    As for social security, we have a 2.5 trillion dollar paper surplus.  What did Congress do with that money?  They stole it and put useless bonds in place.  

Fri, 02/22/2013 - 07:39 | Link to Comment Downtoolong
Downtoolong's picture

I think health care is what will break first. In the last eighteen months, I’ve watched my wife’s mother receive more health care under Medicare than her gross income during her entire life. She probably received twice than much in the ten prior years. I’m not talking about any major surgery or chronic problems. Just endless trips to the hospital for fractures, difficulty breathing, infections, and routine illnesses associated with aging and living until you’re 88 years old. I really don’t want to see her die, even though she’s my mother-in-law, but, it’s clear from the numbers this doesn’t make any sense. On a societal level, we can’t afford it.

I recall when Senator Ted Kennedy was lobbying hard for Obama Care. He was suffering with end of life illness too. The implication of his comments was that everyone deserved health care like he had. What he neglected to tell everyone was that there isn’t enough money in the world for everyone to receive the amount and quality of care he did in the end.

Fri, 02/22/2013 - 08:18 | Link to Comment Bokkenrijder
Bokkenrijder's picture

Maria sounds like a man!

Fri, 02/22/2013 - 12:49 | Link to Comment waterhorse
waterhorse's picture

Sounds like Stanley has been sucking too long on Pete Peterson's microscopic dick.

Do NOT follow this link or you will be banned from the site!