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The Awful Truth About the Deficit


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I wonder if being able to live off "stored wealth" really depends on current production. When things really get bad, it's possible that people that have saved will get burned because of the destruction of financial assets, or repudiation of the currency through hyperinflation. In the scenario where real productivity goes down, and resources required for survival are at a premium, it's possible that even having gold and silver coins won't give you a claim against current production, although I'm sure it's more likely than if you have worthless paper. With the Canada Pension Plan, it's the same kaka, different country. I don't expect to see a dime of that.

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Goldi, chill......you missed my point.  I want my piece of SS only because I have paid so much into it for the last 25 years.

The U.S. Supreme Court made clear in its Helvering v. Davis and Fleming v. Nestor decisions that FICA is just a tax, Social Security is just a welfare program, and there's no contractual connection between the two:

 

No contractual interest

 

The widely-held notion that "I paid into it, therefore I deserve something back from it" derives from the original Big Lie that Social Security is an "insurance" program. The court decisions make clear that it isn't.

 

I no more expect to "get back" the thirty years of FICA taxes I've paid than I do the income taxes that were paid along with them. The money all went into the same pot, and it's all been spent.

 

Experience counsels that one should not expect dishonest people or entities to deliver on their promises. Social Security was bogus from day one. The fact that the notorious counterfeiter Al Green was the point man in the 1983 commission which jiggered its failing finances tells you that it's all flim-flam.

 

Expect nothing from Social Security. Then you can be pleasantly surprised when your 1,300 devalued dollars a month is enough for beer money.

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Hypertiger has it wrong... we're not 6-9 months from the total wipeout. More like 7-14 years. When the baby boomers begin to retire our economy is going to implode:

 

1- Social security payouts will rise dramatically while workers paying into SS shrink.

 

2- Liquidation of stocks and bonds to pay for living expenses.

 

3- Real Estate prices will fall as the supply of housing increases (boomers will begin to die off or will need to downsize to meet expenses).

 

 

People in the 40 and under crowd better watch out. We will be taxed even more to pay for all the old age and retirement programs. The political class will not dare to end any handouts. I assume that by this time our foreign friends will stop buying our debt paper because they know they'll never get the money back.

 

We are doomed.

5-9 until either the start of the fall or Hyperinflation...

 

It is inflate or die and I see no way to sustain exponential debt inflation for more than two years at the most...

 

the vast majority of the price inflation you see now is sustained by debt inflation so leverage is in fact debt inflated debt inflation ends and so will price inflation...

 

GW has cut the government wage increases citing the emergency of 9-11 in 2001 as the reason...

 

The military was supposed to get a raise but due to the war on terrorism's cost they won't be recieving it on top of veterans benifits being slashed...

 

But tax breaks for the rich are in the bag...

 

The government is able to borrow money and only needs to pay the interest the principal never needs to be paid so as far as economic injections giving raises to government workers is in fact the right action to take if your goal is to strengthen debt inflation...

 

By cutting the raises how can you expect consumers to consume more debt if in real terms their wages are shrinking?

 

Government spending is a significant portion of the debt inflation potential...cutting or suspending raises is a blow to the hyperinflation camp...

 

It will end far quicker than the looming babyboomer die off...

 

The required amount of debt inflation to sustain debt inflation has to come from somewhere and if the government is putting the "breaks on" then who or what is going to provide the required amount of debt inflation?

 

They surely can't drop interest rates on average of 83 basis points/year for the next 7-14 years like the last 23 to support the debt inflation which got us to this point...and hyperinflation is called hyperinflation for a reason...because it is over very quick...

Another blow to the hyperinflation camp...

 

?Employers are hiring fewer workers here in the U.S. and working them longer?and now the Bush administration is trying to make it cheaper for them to work employees even longer with its proposed changes to overtime rules,? AFL-CIO President John J. Sweeney said during a Labor Day press conference.

 

Although the Bush administration claims changes to the overtime rules would affect only 644,000 workers, the nonprofit Economic Policy Institute (EPI) found the number of workers who will lose overtime pay is closer to 8 million.

 

 

Sudden death Overtime

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Expect nothing from Social Security. Then you can be pleasantly surprised when your 1,300 devalued dollars a month is enough for beer money.

Machine, that certainly explains a lot. $1,300 would be about 3 cases a day. Now I'm not saying you have a drinking problem, but you must have a liver the size of Texas by now. :lol:

 

Had an interesting "farming" report yesterday by a supplier that also happens to supply a lot of farms round here (propane). Yes the crops have been great, (and here comes one big ugly butt) butt prices received are very low due to too much stuff (domestic and import). Bottom line, it's not good in the farming community. No pricing power at the producer level.

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