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horgad
1000+ Penny Miser Member
USA
1641 Posts |
 Posted - 07/14/2008 : 08:00:59
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"We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power."
- Alan Greenspan (Chairman of the Federal Reserve US Central Bank), appearing before the Senate Banking Committee on February 15, 2005, in response to Democratic Senator Jack Reed of Rhode Island on the topic of funding Social Security.
Again organizations that are considered "too big fail" can always be saved under a FIAT system. No matter how bad their books are, their problems can ALWAYS be papered over with new money.
So Social Security will only fail if the administration wants it to fail or the administration decides that a deflationary collapse is the lesser evil compared to a inflationary collapse.
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 07/14/2008 : 18:01:33
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So, when you're 70, and you get your $1,200 +/- /month (that'll buy you a case or two of Alpo), they can still say they kept their promises......
It's been a Ponze scheme from day one!
Some politician needs to have the BALLS to come forward and level with people. The only way salvage Soc-Security is to raise the retirement age by at least 10, and more likely 15 years. And to phase it out for anyone under 20. They'll still need to pay in for a time, but they will never get a cent back.
If a private sector enterprise ever screwed something up this badly, the management would all be in jail for DECADES! |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Kurr
1000+ Penny Miser Member
2906 Posts |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 07/14/2008 : 19:01:00
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quote:
Originally posted by Kurr
I dont think working harder/longer is the answer. Now if we had a gold standard so the money wasn't inflated away...
True....
I'm not advocating a way to save SS, but rather a way to get out from under the mess that it has become. Sadly, we don't have a gold standard, and probably will not again until after a major shake-up.
Of course, at that point we'll all be living by 19th century standards, growing our own food and settling disputes at the point of a gun, or the end of a rope.....
On the upside, by that point the fiat printing presses are sure to have broken down, and they won't be able to get replacement parts from China... |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 07/14/2008 : 21:16:08
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Well, a gold standard not going to happen. The road to it would be way to hard for the people to live through.
The only two options that I can think of are just to painful for the masses.
1. Stop spending and pay off the national debt. This would reduce the amount of FRNs to the note to amount comparable to the amount of Gold on FR books.
2. Revalue gold to a new amount that would allow current notes to be backed by gold and a lot of debt be wiped out in the revaluing... This would require the Fed to buy gold on the open market to drive the prize towards their fixed rate before telling everyone. Otherwise you would have mass problems.
I am sure I am leaving out major problems with the above, but no way 300,000,000 people are going to willing to suffer through that to then have their social programs cut off.
The answer the answer for SS is to just print it when it comes due. That is the answer to all our problems of this welfare state. That is the course of action the government will take, so you need to make sure you and your investment are set up for future inflation risk.
Those that plan to survive on SS will be given enough for food and housing. Not much of any for extras. The inflation effects will just be felt by all.
FDR screwed us long ago by doing away with the gold standard and creating the start of social programs. I know Nixon finished off the gold fix. FDR shot the horse and it just fell to the ground bleeding in pain. Nixon had the good sense to at least finish the job. Nixon didn't have a choice--- those 40 odd years had to much spending to save the gold standard. The next 30 odd years were worse. No way to undo 70 years of mass overspending without major pain.
-SWUSC
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`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 07/14/2008 : 21:28:22
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quote:
Originally posted by swusc
Well, a gold standard not going to happen. The road to it would be way to hard for the people to live through.
The only two options that I can think of are just to painful for the masses.
1. Stop spending and pay off the national debt. This would reduce the amount of FRNs to the note to amount comparable to the amount of Gold on FR books.
2. Revalue gold to a new amount that would allow current notes to be backed by gold and a lot of debt be wiped out in the revaluing... This would require the Fed to buy gold on the open market to drive the prize towards their fixed rate before telling everyone. Otherwise you would have mass problems.
I am sure I am leaving out major problems with the above, but no way 300,000,000 people are going to willing to suffer through that to then have their social programs cut off.
The answer the answer for SS is to just print it when it comes due. That is the answer to all our problems of this welfare state. That is the course of action the government will take, so you need to make sure you and your investment are set up for future inflation risk.
Those that plan to survive on SS will be given enough for food and housing. Not much of any for extras. The inflation effects will just be felt by all.
FDR screwed us long ago by doing away with the gold standard and creating the start of social programs. I know Nixon finished off the gold fix. FDR shot the horse and it just fell to the ground bleeding in pain. Nixon had the good sense to at least finish the job. Nixon didn't have a choice--- those 40 odd years had to much spending to save the gold standard. The next 30 odd years were worse. No way to undo 70 years of mass overspending without major pain.
-SWUSC
If you're as good with medicine as you are with economics, you'll have your Phd in no time!  Let's hope there is still a "world" for you to practice in. |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 07/14/2008 : 22:32:07
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If I could have made a living doing economics, then I might have done that. I was an accountant, but I really didn't like dealing with the crap to protect a bunch of greedy idiots. (If you were worth say $200m would you risk it all to maybe be worth $1,000,000,000 some day? What can you not buy with $200m that a $1b would buy you? Other than more bragging rights. It is stupid! Yet these private equity folks were doing it right and left. They all should go bust just for being so greedy and risking all those employees' jobs and their ability to support their families due to their greed.)
So, I got sick and tired of working my tail off to protect those greedy people. I decided that if I was going to work my tail off, then I was going to help people. I figured out early that you are going to work your tail off if you are going to get ahead in life.
It comes down to a life choice... Help greedy people... Help regular folks.
My current knowledge of medicine is very very weak right now, but I am still a few science classes short of being able to apply to med school. |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 07/15/2008 : 06:47:08
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quote:
[i]The only way salvage Soc-Security is to raise the retirement age by at least 10, and more likely 15 years. And to phase it out for anyone under 20. They'll still need to pay in for a time, but they will never get a cent back.
Cutting back on Social Security does no good in and of it self, but it may be part of a solution. What is needed, in general, is for the government not to spend money that it does not have. Unfortunately, they may not be able to that because of the huge debts that they have to pay interest on.
So the second option is for the government to declare bankruptcy, clear all of their debts, start over with a new currency, and this time be more responsible.
The process really does not work much different for a government than it does for an individual or a business. It just happens on much, much larger scale and over a greatly protracted period of time when it is a large government.
The bottom line is that if you spend more than you make eventually the SHTF no matter how big or small that you happen to be. |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 07/15/2008 : 15:13:23
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quote:
What is needed, in general, is for the government not to spend money that it does not have. Unfortunately, they may not be able to that because of the huge debts that they have to pay interest on.
I am not sure we are pass the point of good leaders being able to fix the problem, but they have to understand what you just wrote to start fixing it.
I think current national debt is around 70% of GDP with tax receipts around 20%. If you have 5% interest rate on treasuries that is only 3.5% of GDP or 17% of tax receipts. (Plus 10% of the debt is FRN so the rate is very low there... just the FR expenses) That is fixable, i think.
Hey we haven't had a surplus in the Treasury since Jackson. I doubt we will have one in my lifetime. Heck, just running a budget surplus for a year is rare.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Disputing the Myth of Social Security Failing
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