Social Security operates on a simple principle:
You give your retirement money to politicians and the squander it on something else.
They may spend it on someone else's retirement--or on building monuments to themselves--or on programs to curry re-election support from special interest groups. But the one thing they will never do is put the money in a trust fund earmarked for your retirement.
Social Security operates on the basis that would send the owners of a private insurance company to prison: It expects to repay "contributions" with money it will take from someone else later. As the years pass, it becomes harder and harder to keep this pyramid going.
The system will be reformed someday--and perhaps even completely take away from politicians. But the sad and silly history of politics wars us that real reform won't happen until the system is close to collapse. In the meantime, the only changes will be to reduce benefits, delay the retirement age or increase taxes.
The closer you are to retirement now, the bigger chance you have to get something back from Social Security. But, in general, the safest way to consider the matter is to assume you won't get anything---and then treat anything you receive as found money.
Sunday, January 19, 2014
Why You Can't Count On Social Security
Harry Browne explained why in his book, Fail Safe Investing:
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Funny that when complaining about the national debt, the bonds held by the social security trust are always (always) counted as govt debt but when complaining about social security those bonds are not a real govt obligation.
ReplyDeleteWell that was pertinent to this post. I learn so much from JW.
DeleteI think the point is that nobody has ever successfully forced the fedgov to live up to its "obligations." Good luck with that.
DeleteHuh? Jerry is off its meds again. Its inability to craft a coherent argument has now become an inability to craft a coherent sentence. Kids- this is is your brain on socialism, so stay away!
DeleteYou need to take a course in accounting 101 and familiarize yourself with assets and liabilities. Please.
DeleteJP Morgan’s Frauds are Epic,Unprecedented in World History-William Black
DeleteWilliam Black is both a Professor of Law and Economics. He has a wealth of opinions on the politics of spying and Wall Street crime. On President Obama’s curtailing of NSA spying, Professor Black says, “It is only because of Snowden’s disclosures that we know more, and we have this debate . . . The NSA probably intercepts 50,000 documents for every one document that foreign intelligent services collect. So, we are the story internationally. . . . It turns out we were not just spying on terrorists, we were spying on the general population of the world. . . . We used the intelligence we were gathering against journalists to try to discourage whistleblowers from coming forward.” As far as President Obama’s recent curtailment of NSA spying, Professor Black says, “It really tells you the politics of the thing. They decided they had to do something politically to curtail this because they are getting terrible publicity, and they’re getting terrible publicity not just in the United States. . . . This turned into disaster in terms of public relations for the United States and in terms of diplomatic relations.”
Professor Black says, “CEO Jamie Dimon has presided over the largest financial crime spree in world history. . . . It depends on how you count it, but it is more than a dozen, and more in the range of 15 major felonies that either the United States investigators have found, state investigators have found or foreign governments have found.” The Professor goes on to say, “JP Morgan’s frauds are epic in scale, unprecedented in world history. . . in these $23 billion we’re talking about, these are frauds that made Jamie Dimon and other senior officers incredibly wealthy by creating fictional income that led to very real bonuses.”
But, it’s not just JP Morgan. According to Professor Black, the entire financial system is headed for an even bigger collapse. As a major warning sign, Professor Black points to Treasury Secretary Jack Lew’s complaint about no money for regulation in the recent budget deal. Professor Black says, “Jack Lew is the anti-canary in the coal mine because Lew has been gutting regulation for virtually all of his professional life. . . . Lew is saying, my God we’ve gone so far we’re going to cause the collapse of the system. . . . You know when Jack Lew keels over, you know that carbon monoxide has already killed everybody reasonable.” Professor Black goes on to say, “The system is ungovernable . . . It has already largely imploded.”
When asked what it would take to get rid of the rampant fraud and crime in the financial system, Professor Black said, “I do think it will take many more trillions of dollars of losses before we make a serious response.”
http://usawatchdog.com/jp-morgans-frauds-are-epicunprecedented-in-world-history-william-black/
Why you might as well not trust anything financial.....
ReplyDeleteAt Davos: Paul Singer To Warn Of Derivatives Catastrophe
“To the extent they represent trading between financial institutions, these derivative books in particular have been allowed by regulators, lenders and customers to be established with little or no initial margin, thereby removing the presumptive aura and reality of safety and soundness from the entire universe of major financial institutions. It is certainly debatable whether the system, and many of the 100 largest such institutions, were “unsound” before the 2008 collapse, but it is undoubtedly the case that these firms ceased being unquestionably more sound than their customers. In addition, when things started unraveling in 2007 and 2008, there was (and still is) insufficient useful, publicly available information to enable any customer to determine whether to stay with or run from institutions in which they have assets, trading relationships, claims or securities. This point is both irrefutable and critically important. It needs to be fixed. Contrary to what many policymakers would have us believe, no combination of regulation and edict anywhere in the world has yet to address the issue adequately.”
http://www.valuewalk.com/2014/01/paul-singer-davos-speech/
DEATH RATTLE
ReplyDeleteThe media mouthpieces for the establishment gloss over the fact average gasoline prices in 2013 were the second highest in history. The highest average price was in 2012 and the 3rd highest average price was in 2011. These prices are 150% higher than prices in the early 2000′s. This might not matter to the likes of Jamie Dimon and Jon Corzine, but for a middle class family with two parents working and making 7.5% less than they made in 2000, it has a dramatic impact on discretionary income. The fact oil prices have risen from $25 per barrel in 2003 to $100 per barrel today has not only impacted gas prices, but utility costs, food costs, and the price of any product that needs to be transported to your local Wally World. The outrageous rise in tuition prices has been aided and abetted by the Federal government and their doling out of loans so diploma mills like the University of Phoenix can bilk clueless dupes into thinking they are on their way to an exciting new career, while leaving them jobless in their parents’ basement with a loan payment for life.
This entire materialistic orgy of consumerism has been sustained solely with debt peddled by the Wall Street banking syndicate. The average American consumer met their Waterloo in 2008. Bernanke’s mission was to save bankers, billionaires and politicians. It was not to save the working middle class. You’ve been sacrificed at the altar of the .1%. The 0% interest rates were for Jamie Dimon and Lloyd Blankfein. Your credit card interest rate remained between 13% and 21%. So, while you struggle to pay bills with your declining real income, the Wall Street bankers are again generating record profits and paying themselves record bonuses. Profits are so good, they can afford to pay tens of billions in fines for their criminal acts, and still be left with billions to divvy up among their non-prosecuted criminal executives.
Bernanke and his financial elite owners have been able to rig the markets to give the appearance of normalcy, but they cannot rig the demographic time bomb that will cause the death and destruction of our illusory retail paradigm. Demographics cannot be manipulated or altered by the government or mass media. The best they can do is ignore or lie about the facts.
http://www.theburningplatform.com/2014/01/19/the-retail-death-rattle/
"Why You Can't Count On Social Security"
ReplyDeleteShort Answer: The idiots at the Social Security Administration can't count..