Off Topic – But A Lot Of Us Will Be Affected

We have probably all noticed a page six news item that Social Security is “running out of money.” Maxed Out Mama has the details the media will not supply, including the uncomfortable finding that the Disability Fund will be out of money in 2016.

Given the millions the Pelosi, Reid, Obama economy has forced into retirement, early or otherwise, 2033 looks pretty optimistic to me as well. Combined with the cold hard fact that wages continue to decline, as do Social Security taxes, my estimation is 2027. But what do I know. I’m just a numbers guy.

But unlike most “progressives” I do not have to cut a hole in my pocket to count to eleven.


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3 Responses to Off Topic – But A Lot Of Us Will Be Affected

  1. Harold says:

    Ummm, that money is already gone, spent by the government and replaced by unmarketable Treasury Department instruments (bonds or whatever; remember Gore’s inane “lock box”?). Last time I checked the main Social Security program is already running a deficit, in that the payroll taxes dedicated to it aren’t enough and it’s drawing money from the general fic, part of those “trillion dollar deficits as far as the eye can see”.

  2. Stranger says:

    If I can read between the lines, the aim is to take Americans savings by making “money” worthless. The actual cost of living inflation is running at or above 11 percent a year, compounded, so it will not take long to turn a man’s life’s savings into so much toilet paper.


  3. Harold says:

    While it’s not “required”, since the true Federal debt is way below the 90% of GDP threshold where countries always default (what I count is Treasury instruments held by others, not this “right hand owes the left hand” sort of stuff like the Social Security “Trust” Fund), one standard way to default is inflation, which goes back to the Roman Empire if not earlier (coin clipping). It also of course decreases the true value of future government obligations, to the extent the CPI doesn’t match true cost of living increases. Which of course it doesn’t for some good and some bad reasons.

    One of the “good” reasons is the difficulty if not impossibility of capturing housing costs. The fact that we’re in an overall deep residential housing depression is irrelevant if you’re locked into your house for whatever reason (paying off a mortgage, holding it free and clear … well, maybe your property taxes will go down…) and less relevant if you’re not in a section that was hit by that (and then there’s anomalies like the Joplin, MO tornado taking out ~ 8,000 units (when I go back my rent will be going up, the excuse is cable and Internet will be bundled in the rent payment, but it’s indisputable I’ll be getting a more valuable unit since it’s brand new on top of some nice improvements), or the Washington, D.C. area which is living high on the hog).

    Less good is the BLS’s use of the substitution principle. Drought has caused the price of beef to temporarily skyrocket? Well, they figure people will eat less of that and more chicken, pork, whatever. And that’s not in the least caused by true, Federal Reserve etc. caused core inflation. Nor is the secular increase in corn and other commodity prices that’s caused by the insane biofuel mandates or the wealthier PRC eating more meat, not that 3rd World residents care when their price of food skyrockets, or they can no longer afford to eat wheat or whatever.

    The BLS plays games with energy, I gather, but even then, how do you accurately figure out the cost of hearing people’s homes with a mix ranging from very cheap natural gas to expensive heating oil? Team Obama is about to shut down half of the remaining East Coast refining capacity … you can’t count the resulting prices increases as core inflation, no more than if they were caused by a ’70s era Arab oil embargo.

    Then, to take a step backwards and look at the bigger picture, by definition present consumption must come from present production. All those Baby Boomers with “pieces of paper” (doesn’t matter what form they’re in, perhaps not even gold and silver) who expect to exchange them in the future for “real stuff” like food and fuel are going to learn some hard lessons about supply and demand. As they switch from consumers of financial instruments (saving for retirement) to spenders they’ll find their true value will be less than they expected.

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