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Eating Our Seed Corn: How Much Of Our "Growth" Is From One-Time Cashouts?

Tyler Durden's picture





 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

We as a nation are consuming our seed corn in great gulps, and there will be precious little left in a decade to pass down to the next generation.

Anecdotally, it seems a significant percentage of our recent economic "growth" is being funded by one-time cashouts of IRAs, 401Ks, sales of parents' homes, etc. This is the equivalent of eating our seed corn. Once these pools of savings/equity/capital are gone, they aren't coming back.

I personally know a number of people who have cashed out their retirement account 401Ks (and paid the taxes) to pay for their kids' college expenses--in effect, cashing out their retirement to lower but not eliminate the debt burden of their offspring who bought the "going away to college" experience.

The cashed-out 401K delighted the government, which reaped huge penalties and income taxes, as the cashout pushed the annual income of the recipient into a high tax bracket. ("Hardship" withdrawals for medical care and education waive the penalties, but the income tax takes a big chunk of the withdrawal.)

The middle-aged person who cashed out their retirement will not work long enough to save an equivalent nestegg. Not only is time against such an accumulation of retirement savings, so is the stagnant economy: companies are slashing 401K contributions to offset rising healthcare (a.k.a. sickcare) expenses, and many workers young and old alike are finding jobs that pay them as self-employed contractors or part-time jobs with no benefits.

Another set of middle-aged people are withdrawing from IRAs (and paying the penalties) just to fill the gap between expenses and income. For a variety of reasons, many people are loathe to cut expenses or are unable to do so without drastic changes in their lifestyle. So they withdraw from the IRA (individual retirement account) to cover expenses that are left after income has been spent.
This "solution" is appealing to those whose incomes have declined in what they perceive as "temporary" hard times.

Another pool of equity that is being drained is the home equity in aging parents' homes. The government will only pay for one set of medical expenses (long-term care, for example) if the elderly person has assets of less than $2,000 (as I recall). Given this cap, it makes sense for elderly homeowners to transfer ownership of their home to their offspring well before they need long-term care (which can cost $12,000 to $15,000 a month).

A variety of other medical expenses can arise that cause the home to be sold to raise cash--either expenses for the elderly parents or for their late-middle-age offspring who develop costly health issues. Family disagreements over sharing the equity can arise, leading to the sale of the house and the division of the equity among the offspring.

This cash is immediately hit with a variety of demands: a grandkid needs a car, somebody needs money to go back to graduate school (pursuing the fantasy that another degree will provide financial security), and so on--not to mention "we deserve a nice vacation, a new car, etc.", the temptations in a consumerist culture that we all "deserve."

Once the family home is sold, the furnishings and other valuables are also sold off to raise cash. In many cases, the expense of transporting the items across the country to relatives exceeds the value of the furnishings.

One common thread in all these demands for liquidation of equity is the short-term need is pressing. A consumerist culture offers few incentives for long-term savings other than life insurance, IRAs and 401Ks, and all of these can be tapped once a pressing need arises.

Though people may want to hang on to their nestegg, they are faced with short-term needs: how else can I pay tuition, or this medical bill?

As incomes have stagnated and costs for big-ticket expenses such as college and healthcare have soared, the gap between income and expenditures has widened every year for the bottom 90%.

Even those in the top 10% are not protected from draw-downs in retirement funds and family equity in homes and other assets.

Retirement funds, home equity, family assets--these are the financial equivalent of seed corn. Once they're cashed out and spent, they cannot be replaced.

In more prudent and prosperous times, these nesteggs of capital were conserved to be passed on to the next generation not for consumption but as a nestegg to be conserved for the following generation. That chain of capital preservation and inheritance is being broken by the ravenous need for cash to spend, not later but right now.

So how much of the recent "growth" in GDP results from our consumption of seed corn? It is difficult to find any data on this, something which is unsurprising as the data would reveal the entire "recovery" story as a grandiose illusion: we as a nation are consuming our seed corn in great gulps, and there will be precious little left in a decade to pass down to the next generation.

We face not just an impoverishment in consumption but in expectations and generational assets.

 


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Tue, 02/25/2014 - 17:34 | Link to Comment 666
666's picture

Undoubtedly true, but the gubmint just loves to twist those statistics into golden unicorns and chocolate covered strawberry trees, so all must be well!

Tue, 02/25/2014 - 17:40 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

*Sigh*

Anyone cashing in their IRAs or 401(k)'s should be buying gold with some of that.

Long-term thinking will help.  Do not eat the seed corn.

Tue, 02/25/2014 - 17:43 | Link to Comment kliguy38
kliguy38's picture

many of them are.......buying gold that is....

Tue, 02/25/2014 - 18:12 | Link to Comment PRO.223
PRO.223's picture

Many are wising up and cashing out... so it won't be bailed in or MYRA'd.

Tue, 02/25/2014 - 18:25 | Link to Comment negative rates
negative rates's picture

SOLD, to the hightest bidder.

Tue, 02/25/2014 - 18:31 | Link to Comment grid-b-gone
grid-b-gone's picture

Exactly. Move it to a place and form that only you have access to.   

Wed, 02/26/2014 - 01:13 | Link to Comment Casey Stengel
Casey Stengel's picture

Mrs. Stengel and I cashed out and converted to real property that pays 7% annual return. We can put our hands on it. The bank would gladly give us a .75% return.

Tue, 02/25/2014 - 17:48 | Link to Comment seek
seek's picture

with all of that, not some!

Tue, 02/25/2014 - 18:02 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Whaaa..., and leave none for Bitcoin?!?!

Tue, 02/25/2014 - 18:17 | Link to Comment seek
seek's picture

Sssh! It leaves more for me!

Tue, 02/25/2014 - 18:20 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Now you stop that!  Next thing you know you'll tell me not to buy any more ammo either.

Wed, 02/26/2014 - 01:14 | Link to Comment shitco.in
shitco.in's picture

.

Tue, 02/25/2014 - 17:50 | Link to Comment Rainman
Rainman's picture

happy, happy .. I been eating my seed corn at Cabelas.

Tue, 02/25/2014 - 17:51 | Link to Comment superflex
superflex's picture

Gold and silver with the scraps .gov left me.

Tue, 02/25/2014 - 18:03 | Link to Comment 0b1knob
0b1knob's picture

Silly capitalists.   Any Keynsian government economist could tell you that savings are HARMFUL to the economy. Liquidation of savings (and savers) are a necessary sacrifice.

https://en.wikipedia.org/wiki/Paradox_of_thrift

Forward USSA!

Tue, 02/25/2014 - 18:38 | Link to Comment Woodyg
Woodyg's picture

Yea let's not blame the fascists in the gov and corporate world who shipped the decent paying jobs overseas -
All in order to take home 20 mil a year instead of 10 mil

Or to have 5 vacation homes instead of 2

I'll go ahead and blame the fascists who bought the guv into doing their bidding and rewriting the tax laws to favor the predatory monopolist.

We thought we won WW2 against these types but of course like cockroaches they've scurried out from behnd the walls and are once again ruining my dinner - you turn around and there's 100's of these roaches all over the place -

Tue, 02/25/2014 - 18:45 | Link to Comment AGuy
AGuy's picture

"Anyone cashing in their IRAs or 401(k)'s should be buying gold with some of that."

 

That can be difficuilt if you have no job and a pile of bills stacking up. The term "Stackers" now applied to a large group of unemployee that are stacking their bills, not PMs

 

Tue, 02/25/2014 - 17:49 | Link to Comment ZH Snob
ZH Snob's picture

better to sell you 401K now than to have the government eat your seed corn with a (soon to be) forced MYRA once they have no one else to buy their worthless t-bonds.

Tue, 02/25/2014 - 17:59 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Yes, good advice.  I did that in late 2008, paid the taxes and penalties.  Some went to gold, NONE went to frivolity (Bearings are not happy-go-lucky types).

This MyRA looks to be dangerous!  Your .gov approves of the MyRa, that should be all you need to know.  The very nature of the MyRa is confiscatory...

Tue, 02/25/2014 - 19:25 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Sad thing is that ANY funds left anywhere in the financial system are being eaten up by the vermin in the barn.  REAL inflation combined with near ZERO% interest is eating up that 'seed corn' even if you do NOTHING and leave it alone.  Try and beat inflation by investing in equities or high yield instruments and you risk losing it ALL if you don't get out in time.

Tangibles seem to be the only option left - but then govcan take whatever they want from you.... so?????   what to do?   glad I'm near the end of MY life. 

Tue, 02/25/2014 - 17:38 | Link to Comment TeamDepends
TeamDepends's picture

Hope you're not eating Monsanto GMO seed corn.

Tue, 02/25/2014 - 17:52 | Link to Comment HyBrasilian
HyBrasilian's picture

This post is a 'hook'

~~~

LOL ~ on 'Monsanto' seed corns... FUCK MONSANTO!... 'Survival' will have N-O-T-H-I-N-G to do with them... [as much as they'd like ~ by way of their PERVASIVE ZH 'ad' plants ~ to think they will]...

MONSANTO 'shills' [who have been an, unnoticed, RECENT ENTRY, to Zero Hedge 'click ad' bait] ~ Instigate RED ARROWS ~ NOW!

Tue, 02/25/2014 - 18:01 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Trolls & shills not here yet.  Two greens as of now, zero reds.

Tue, 02/25/2014 - 18:03 | Link to Comment BeansMcGreens
BeansMcGreens's picture

I just finished eating my Monsanto gmo seed corn, and chased it down with a nice gallon of round-up. Mighty tasty (sound of smacking lips)!!!

Tue, 02/25/2014 - 18:07 | Link to Comment TeamDepends
TeamDepends's picture

That's the taste of progress!  See you on the other side!

Tue, 02/25/2014 - 17:38 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Well,  "savings" is spent eventually.  Otherwise, what's the point?

Tue, 02/25/2014 - 17:46 | Link to Comment Kayman
Kayman's picture

"Savings" spent on current consumption and not spent on long term, self-liquidating investment would be the same as cutting off your leg and boiling it in a pot. Eventually you run out of appendages.

Tue, 02/25/2014 - 18:05 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

The best savings are those you can pass on to your children.  Especially the kind that lie very still and are yellow.

High quality bearings of good value are pretty close too...

Tue, 02/25/2014 - 18:39 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Re:  Eventually you run out of appendages.

Well, yeah.   But, eventually you die too, and you don't need those appendages.

Individual savings eventually gets spent or inherited, period.   

SOMEBODY, at some point, will spend it.

Tue, 02/25/2014 - 20:44 | Link to Comment Seychelles
Seychelles's picture

Yes, and if your heirs tend to blow money on a constant stream of late model cars and consumer junk then why shouldn't you have the fun blowing it?  You had the discipline to accumulate it!

Tue, 02/25/2014 - 18:30 | Link to Comment SAT 800
SAT 800's picture

There's a very good point to the article. When a country as a whole spends down its savings; citizen by citizen, because it's no longer a functioning part of the global economy, it's a very bad sign. all this is due to the globalization, which in turn is brought to you by the multi-national corporations who bought the congress critturs and paid for the propaganda barrage. When Clinton signed the legislation making China a most favored nation trading partner, and I don't care if he was a democrat, a republican, or an alien, it was a watershed moment. This legislation came to his desk from congress, where it was purchased; and you were sold.

Tue, 02/25/2014 - 17:39 | Link to Comment Chupacabra-322
Chupacabra-322's picture

Wonder how many are cashing out & investing in hard assets to protect / conserve their wealth? Keep stacking.

Tue, 02/25/2014 - 17:39 | Link to Comment Joe Davola
Joe Davola's picture

Another pool of equity that is being drained is the home equity in aging parents' homes. The government will only pay for one set of medical expenses (long-term care, for example) if the elderly person has assets of less than $2,000 (as I recall). Given this cap, it makes sense for elderly homeowners to transfer ownership of their home to their offspring well before they need long-term care (which can cost $12,000 to $15,000 a month).

 

5 years before, or Medi won't pay for the long term care for a time period based on the home value/monthly care cost.

Tue, 02/25/2014 - 17:44 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

I'm pretty sure that hardly ANY OldFarts would actually manipulate their finances like this in order to game the system such that they'd be receiving Government socialist handouts they don't deserve. 

The OldFarts deserve free long-term care, because they are entitled to that.   Unlike those goddamn lazy hippy bastards that just want more free shit.    me me me,  all you ever hear from them is: me me me.

The OldFarts are above that...

Tue, 02/25/2014 - 19:54 | Link to Comment TheReplacement
TheReplacement's picture

How about you buy me $1 of gold or silver for every "OldFart" I can find on the dole?

Tue, 02/25/2014 - 18:01 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

My boss bemoaned the fact her mother failed to do this and had left her assets which totaled 750k. After having 25 years of care with Alzheimer's she was left with an 18k for her inheritance. A fact her mother would have been horrified. Protecting assets from the vultures is difficult. Perhaps I should take some comfort with the rate I'm being bled dry by taxes and inflation I may have eventually no assets left to steal away.

Miffed;-)

Tue, 02/25/2014 - 18:34 | Link to Comment SAT 800
SAT 800's picture

You can protect yourself from inflation; by rationalizing your spending plans; don't spend as to "get rid of the inflating currency"; but spend as little as possible; and put the surplus in Silver. This will protect you against inflation. For Real; it just will. And if .gov. doesn't know about it; they can't tax it; and this is absurdly easy to arrange. use your head and save yourself.

Tue, 02/25/2014 - 21:08 | Link to Comment MsCitizen2
MsCitizen2's picture

Agreed! (To putting it all in silver.)

Tue, 02/25/2014 - 19:57 | Link to Comment TheReplacement
TheReplacement's picture

Sorry but someone has to pay for that care and it really should start with the person getting it.  Sounds cold maybe but if you wanna live longer then pay for it.  For the record, my inheritence was less than $5K.

Tue, 02/25/2014 - 23:32 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

Actually mine was 7k. I redid my porch which was falling down with dry rot. I considered myself fortunate to get that. Not all of us expect to live like Paris Hilton.

Miffed;-)

Tue, 02/25/2014 - 19:49 | Link to Comment Offthebeach
Offthebeach's picture

Obamacare Quality of Life Review Panels will get that monthly cost down quick.
Think of it as late life abortion. A unwanted, unplanned...um..event.
There will be studies showing improved quality of Joblock life after Pop gets aborted.
I can't wait for the heroic movie were decling Pop, played by Kirk Douglas agrees to take the needle. Boffo Academy Award!

Brave New Obama World!

Tue, 02/25/2014 - 17:39 | Link to Comment williambanzai7
williambanzai7's picture

Seed corns.

I know someone who had to have one of those removed.

Tue, 02/25/2014 - 18:06 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Do seed corns come back like warts do?

Tue, 02/25/2014 - 17:40 | Link to Comment halfawake
halfawake's picture

Saw an ad on TV for AARP Jobs site... going just as they planned. Have them save up for retirement, then take it away and impress on the old folks to keep on working. More serfs. Let's see how the boomers respond.

Tue, 02/25/2014 - 17:42 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

Which is what happens when government policy is all geared toward consumption, which is what happens when you manage an economy to one number: GDP. Who cares if everyone starves in their twighlight years I guess...got +.5% on GDP, so bonuses and catered summits for all involved!

Tue, 02/25/2014 - 20:06 | Link to Comment Umh
Umh's picture

"When a measure becomes a target, it ceases to be a good measure." Goodhart's Law

Tue, 02/25/2014 - 17:42 | Link to Comment assistedliving
assistedliving's picture

was talking to my banker.  last crisis he said he wasnt really worried as people had savings, and yes, dipped into them.  "Thats what they're for" he said.

this time he said there are no savings. 

Tue, 02/25/2014 - 19:33 | Link to Comment cynicalskeptic
cynicalskeptic's picture

this time he said there are no savings. 

 

unless your're one of the 0.1% - THEN you've got a few billion stashed offshore......    

A good number of those in the '1%' have the majority of their assets locked up in a house, business or retirement account and are living paycheck to paycheck like the rest of the world...... astounding how many of those that SHOULD be well enough off are living above their means leasing expensive cars and sopending riduculous amounts on clothes and vacations and such.... 

The REAL wealth is concentrated in a VERY few hands.  It's not just an exponentioal curve leading up to the top 1%,  that exponential curve is going near vertical within the 1% 

Tue, 02/25/2014 - 17:43 | Link to Comment wagthetails
wagthetails's picture

although i agree, some actually numbers on these trends would have been helpful. 

Tue, 02/25/2014 - 17:44 | Link to Comment samsara
samsara's picture

One time Cash Outs,   Ok.   Let's See.  For the Record books.

SpindleTop

Ghawar

Burgan

Cantarell

.......

Tue, 02/25/2014 - 18:10 | Link to Comment Flakmeister
Flakmeister's picture

Indeed, you beat me to it...

Fossil Fuels are the ultimate "One time Cash out"....

I'll raise you the great Soviet fields:

Romashkino and Samotlor running at an estimated 75-85% depleted...

Tue, 02/25/2014 - 18:26 | Link to Comment negative rates
negative rates's picture

We need more fall guys.

Tue, 02/25/2014 - 18:45 | Link to Comment samsara
samsara's picture

Indeed, indeed.

Those and your two are the largest onetime cash outs in the history of the human race.

Only a few will see it as such.

Tue, 02/25/2014 - 17:47 | Link to Comment Seasmoke
Seasmoke's picture

Yes most all my seed corn is gone. But I have plenty of acorns stored.

From what I can tell of those around me. There are no savings left !!

Tue, 02/25/2014 - 18:29 | Link to Comment negative rates
negative rates's picture

Execpt squirreleo is living in your attic with ample food.

Tue, 02/25/2014 - 17:49 | Link to Comment Bioscale
Bioscale's picture

Wait, in the US you have to pay a tax from your retirement savings when cashing out?

Tue, 02/25/2014 - 18:01 | Link to Comment seek
seek's picture

Yes. They're allowed to appreciate tax-deferred (ie you can re-invest earnings without paying taxes) but once you cash out, you have to pay the deferred taxes.

There's also mandatory distribution requirements, i.e. if you're over 70 IIRC, you have to take out a fixed % of savings and pay the taxes, regardless of need.

Tue, 02/25/2014 - 18:31 | Link to Comment Big Corked Boots
Big Corked Boots's picture

Also, there is an implied assumption that when you take withdrawals, you will be retired, not earning income, and therefore getting taxed at a lower rate. That doesn't work because (1) people need the money now, unemployed or underemployed, and (2) the assumption that taxes will not spike to crushing rates later on down the road when TSHTF is optomistic at best.

Tue, 02/25/2014 - 18:57 | Link to Comment AGuy
AGuy's picture

"so, there is an implied assumption that when you take withdrawals, you will be retired, not earning income"

Yes, unless you manage to avoid withdrawing before you turn 59, there is a 10% penalty. Plus tax rates are going up and up. and just about everyone with a 401K is subject to the AMT. Private Retirement savings plans are just another way for the gov't to shake down savers.

Tue, 02/25/2014 - 20:21 | Link to Comment GeezerGeek
GeezerGeek's picture

Adding to the injury, making withdrawals from an IRA or 401K, for retired people, can result in up to 85% of any Social Security benefits being taxable. So you may end up paying income taxes on the 50% you kicked in as an employee while working, except it isn't really your money that you're getting back. 

Tue, 02/25/2014 - 20:36 | Link to Comment BobRocket
BobRocket's picture

It was never really your money in the first place. Why you think you are entitled to anything tangilble back after all this time makes me laugh.

 

Suckerzzz

Tue, 02/25/2014 - 19:38 | Link to Comment autofixer
autofixer's picture

You see in Amerika, we are afraid someone else will have more than us in retirement and that would not be just and fair, so we ask the.gov.us to steal it from them at the point of a gun and give it to us.  Corn seed is for d'still'n.

Tue, 02/25/2014 - 17:52 | Link to Comment Duc888
Duc888's picture

 

 

 

Most "growth" since 1970's has been debt.

Tue, 02/25/2014 - 19:07 | Link to Comment Flakmeister
Flakmeister's picture

Make that the 80s....

Edit: check out the last figure

http://www.economicshelp.org/blog/6775/debt/total-us-debt-public-private/

Tue, 02/25/2014 - 17:56 | Link to Comment Chupacabra-322
Chupacabra-322's picture

The only "seed" that's going to be left is the Jizz on Bomers faces for not cashing out of an obvious manipulated Ponzi market.

Tue, 02/25/2014 - 18:02 | Link to Comment Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

Better to eat your seedcorn now than wait for the government to confiscate the silo and pass your corn out to its nomenklatura and client m00chers.

Tue, 02/25/2014 - 18:02 | Link to Comment Caveman93
Caveman93's picture

So, if you take a dump and eat it...how many times can you eat your own feces, poop it out and still get nutrition out of it? Does it just disappear after awhile and you don't poop anymore?

Tue, 02/25/2014 - 18:05 | Link to Comment Winston Churchill
Winston Churchill's picture

Seed corn doesn't digest from my experience.

Pases right thru'.

Tue, 02/25/2014 - 18:31 | Link to Comment CharliePrince
CharliePrince's picture

MONSATANO

Tue, 02/25/2014 - 18:36 | Link to Comment BobRocket
BobRocket's picture

Of course the middle classes are eating the seedcorn, it's not like they have anything left to live for. Children have flown, (only 1.6) the future is grim, they know what ponzi pensions are so they are spending what they can get out now.

 

These are the death throws (consumption is falling)

 

You can hear the death rattle echoing throughout corporate buildings across the nation.

 

You can cover your ears if you wish but it will not stop the wailing of the brakes.

 

There are not enough young people with sufficiently high aspirations to keep consumption growing.

 

So it will slow.

 

So the monetary system will crash.

 

Unless the monetary system expands exponentially, it will crash.

 

It isn't so It will.

 

 

 

Tue, 02/25/2014 - 18:51 | Link to Comment Duc888
Duc888's picture

 

 

Flakemeister: "Make that the 80s..."

 

 

Well, I see your point, we still had some DECENT manufacturing in the 1970's

 

Tue, 02/25/2014 - 18:53 | Link to Comment Stuck on Zero
Stuck on Zero's picture

We're told that we are consuming our seed corn but the statistics show it has all piled up with the 0.001%. I'm waiting for the crop to issue from that bunch.

 

Wed, 02/26/2014 - 01:06 | Link to Comment Dr. Sandi
Dr. Sandi's picture

I'm just an average American. What's 'seed corn' and what do you do with it?

Tue, 02/25/2014 - 18:55 | Link to Comment BobRocket
BobRocket's picture

Everybody except the top 0.01% are cashing out

the next 0.01% are spending the money to climb (forlornly) the last inch of the greasy pole

the next 0.08% are spending it keeping up appearances

the next 92% are just holding on (and a lot of them are losing grip)

The bottom 7% want to know who all these incomers are

 

(that will be you)

 

 

Tue, 02/25/2014 - 18:55 | Link to Comment Professorlocknload
Professorlocknload's picture

In the eyes of the Fed, growth is devaluation. Like, "We need 4% inflation to generate growth in the economy."

 

The sad thing is, the public believes it.

Tue, 02/25/2014 - 19:48 | Link to Comment Umh
Umh's picture

The government loves inflation they get to tax the nominal increase in our assets which may actually be worth less than when we bought them

Tue, 02/25/2014 - 19:01 | Link to Comment spinone
spinone's picture

This is a national epidemic.  We are liquidating and not investing. 

Basic sanitation, vaccination and antibiotics are largely responsible for the increased duration and quality of life in industrialized countires.  The USA is allowing its water and sewer infrastructure to collapse, no longer engaging in R&D on antibiotics, and because of for profit healthchare only 63% of children are fully vaccinated (http://www.immunizationinfo.org/science/demographics-unvaccinated-children

The US invented the internet, but because of legislative corruption and corporate monopoly we have fallen to 16th in broadband service. 

Saving is not rewarded, because of Fed manipulation of the interest rate.

Public and private debt is at an all time high.

This how empires decline.

Tue, 02/25/2014 - 19:15 | Link to Comment BobRocket
BobRocket's picture

spinone : 'We are liquidating and not investing'

 

Why would you invest in a future with negative returns ? Duh!

 

Savings are wasted, you may as well consume your fat now, if you don't, someone else (a stranger, a foreigner or even worse a jew or muslim) will eat your fat, gristle and bones.

 

Scorched Earth is the future

 

The worst thing is that you will be happy to go along with this when your leaders suggest it (vorsprung durch technic)

 

 

Tue, 02/25/2014 - 20:13 | Link to Comment BobRocket
BobRocket's picture

Right, which idiot up-arowed me for the previos post and which wanker down-arrowed me for this one ?

 

One at a time, we all know the rules

 

Stake your claim Bitcz

Tue, 02/25/2014 - 21:35 | Link to Comment spinone
spinone's picture

Things are always changing, some win and some lose.  But that doesn't mean that you give up on sanitation and antibiotics.

The future has great promise, if you can free youself from expectations based in the past.

You sound like a buggy whip maker who just saw his first automobile.

Tue, 02/25/2014 - 19:12 | Link to Comment I Write Code
I Write Code's picture

I thought this was going to be about macroeconomics, how the vulture capitalist sells a manufacturing plant for scrap.

Tue, 02/25/2014 - 19:45 | Link to Comment Umh
Umh's picture

I really don't like Keynes, but even he spoke truth on occasion.    "By this means government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft." -- British Lord John Maynard Keynes

Tue, 02/25/2014 - 20:50 | Link to Comment Lumberjack
Lumberjack's picture

One thing the tylers seem to have missed is the food industry. I therefore posit this:

http://www.mdd.uscourts.gov/mdl/MDLPortal.asp?TableID=Royal%20Ahold

 

Pay close attention please. 

Tue, 02/25/2014 - 20:57 | Link to Comment Lumberjack
Lumberjack's picture

http://www.bloomberg.com/news/2013-11-14/ahold-to-redistribute-additiona...

 

There is a new play in the netherlands regading the above. No links yet.

Tue, 02/25/2014 - 21:00 | Link to Comment ncdirtdigger
ncdirtdigger's picture

I went to the barn to eat my seed corn, and found some govco rat smiling back at me, his belly distended. He belched and said 'You didn't grow that'. Then he and his Wookie flew off on vacation.

Tue, 02/25/2014 - 20:58 | Link to Comment Spigot
Spigot's picture

By and large, unemployed boomers end up using their savings and retirement moneis to keep from losing their homes, cars, etc. So, that is one place these funds are going.

Demographicly speaking virtually no one in their 20's or 30's is putting anything substantive into a retirement account, simply because they have no extra.

And, as stated, seniors are indeed and always have drawn down their savings to support themselves and their needs, as they should.

As a wannabe farmer I will say this the use of the phrase "seed corn" is not really accurate. Seed corn was what the farmer saved in order to replant a crop in the spring. It was not savings. It was capital, which was expected to be reinvested in productive work within about 6 months or less. A more accurate use of the term would be a cash account that a company was building to use to buy materials for future projects. I say this because Capital Investment in equipment was more like the farmer buying a tractor to replace his horses, so this doesn't really fit the phrase.

Farmer's typically invested surpluses into silver and gold hidden in floors and walls. That was their retirement fund. They knew it would not lose value.

There was a farm house in the midwest that was boarded up after the farmer died. The property was handed down to a son, then to a nephew of the son. A few years ago the nephew went to the property and opened it up. In one of the back rooms there were countless jars, cans and sacks full of silver coins dating as far back as the mid 1800's. It was the largest virgin cache of coins to hit the American coin market in decades.

Tue, 02/25/2014 - 21:29 | Link to Comment Stud Duck
Stud Duck's picture

Good article, have observed the same here in the middle land of snow and ice.

I have taken the steps to protect my parents assets including land in Oklahoma with oil, ranch in Colorado,  houses and farm land here in Western Missouri.

My dumb assed brothers and sister just avoided the issue, mother was parinoid I was trying to raid the money pile, ect. forced them to face reality, if this is not done 5 years (thought it was 7) and apply for Medi, you can be hit on for fraud trap, fines threats. ect.

I killed my 401K purchased a machine shop with it, never looked back on that move, pissed at company and the way Well Fargo treated me on it.

The preservation of assets,especially oil income , since the 1960 has made my parents and our path much easier, in the 80's it crashed along with land, cattle ect. took a bad hit and was not leveraged out that far but really hurt, $1/2 mill losses.

The investment in education paid off for myself and siblings, but my parents thought ahead, moved within 25 miles of a good university to keep costs down. Just another farm but next to a college. ended up staying here.

It helps to have an old lady that is educated and a asst dean, she is a consumerist but a nut on asset preservation too, watched her family farm dwindle to nothing, sold it in the early 70's for $550 acres. now worth $22K per acres.

Tue, 02/25/2014 - 21:38 | Link to Comment AdvancingTime
AdvancingTime's picture

America’s lack of savings is repeatedly pointed to as a problem, yet laws that tax  interest  make small savings accounts a non-starter when coupled with the factors of  inflation and bank fees. For a long time  I’ve promoted a program that makes the first Two Hundred Dollars of interest from a savings account non-taxable as a way to encourage savings.  At a four percent interest rate it would allow for the interest on a Five Thousand Dollar savings account not to be taxed. More on how taxation discourages savings in the post below,

http://brucewilds.blogspot.com/2012/01/taxation-discourages-savings.html

Tue, 02/25/2014 - 22:57 | Link to Comment The Final Straw
The Final Straw's picture

Outlaw inheritance. Upon turning 30, everyone receives a portion of the inheritance pool. A level playing field. No more blue bloods.

Wed, 02/26/2014 - 01:58 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Social Credit, anyone?

Thu, 02/27/2014 - 07:06 | Link to Comment litemine
litemine's picture

Eat the Seed Corn?  Hell lets just make Moonshine and get Drunk.

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