Posted on 11/26/2009 9:16:57 AM PST by wardaddy
Lady, when I read this, you were the first person I thought of, since you’re on top of all things financial.
Geez. What a mess.
I’m not privy to his email addy but maybe this should be emailed to KD over at the market-ticker.
Since he has been screaming about this shit for 18 months!
meh
Hope you had a great holiday!
Dammit, I WANT bad banks to go out of business.
Yesterday would have been fine with me, btw.
Too big to fail, my ass.
This Bloomberg article shows how Spain's "shovel-ready jobs" (which, unlike here, apparently actually were jobs for a while) stimulus simply "put unemployed on ice." And now it's time to pay the fiddler.
Exactly. Besides dying and leaving millions of properties that no one wants, inability to spend, and penny-pinching regardless, will severely contract discretionary spending --- the engine of the real economy.
However, there's another way unemployment + boomers is effecting the economy right now. Unemployment numbers do NOT count the number of people (mostly boomers) who in the last years finally opted for EARLY RETIREMENT, including AGE 62 ENROLLMENT IN SOCIAL SECURITY ("early" enrollment) because they could not get or keep their jobs.
Early enrollment in Social Security has skyrocketed! Functionally (their effect on the economy right now), these SS payments are the same as a never-ending unemployment benefit.
They affect the economy by drawing out present dollars for payout. Moreover, this means that boomers, who not only would not have draw out of the SS fund for a few years, are also not paying in for the next years, as they otherwise would have if they'd been employed.
At the same time, they are coming into their years of potentially high medical expenses, much of which now will be paid by the government.
Every discussion of unemployment needs to include figures on early enrollment in Social Security over the last year or so.
Man, you are so right on this point as well! And no one seems to reflect on the fact that the discretionary consumer spending, ESPECIALLY BY BOOMERS, likely is PERMANENTLY contracted.
Look, many boomers have about everything they need, and many have led a somewhat affluent lifestyle to the point that it doesn't even really matter to them if they can't go out to dinner so often or go on cruises, whatever.
What I'm saying is that the psychology of penny-pinching is quite different in this group and this time around. When you bought a pair of shoes because they were the new style, a getting to be senior has no problem "adjusting" to not buying new styles and instead wearing one of the many pairs of shoes in the closet.
I'm not particularly wealthy, but I think I literally could go a decade or more just wearing out the stuff I have, without buying much of anything else. In fact, I can't wait to start getting rid of much of the stuff that's been accumulating!
When financial shock is coupled with the lack of true *need* for buying much of anything --- has the world economy ever seen such a combination?
It is interesting the goobermint never considered adjusting SS payouts in the past and partial investment of SS fund intakes into something like federal toll road building bonds, etc.
They affect the economy by drawing out present dollars for payout. Moreover, this means that boomers, who not only would not have draw out of the SS fund for a few years, are also not paying in for the next years, as they otherwise would have if they'd been employed.
One thing is fer sure...now way this side of h$ll is the goobermint going to be able to fund its retirement programs for its employees becasue of all the goobermint debt and continued growth of goobermint.
The monster has to be killed with regards to spending and unfunded liabilities.
Many at the top advocate killing off the old, sick and disabled because of just what you and I realize.
I do think that because they won’t be able to sell their homes, fewer folks will be able to downsize, move to assisted living, go into nursing homes etc.
Whether is a good thing or bad thing depends on each individual’s circumstances.
But I do think the ability to move into such higher-care settings has meant people live longer. Even simple things, such as falling at home, is much more likely to result in death for the elderly than if that person were to fall in a higher-care setting where someone was around to at least notice right away.
One thing that also never gets talked about is the skyrocketing SSDI costs. That is a drain on th system with a few deserving folks and many scammers.
AMEN.
This is why I think conservatives need exactly ONE plank in their platform, ONE plank that we all rally around and pursue relentlessly: LIMITED GOVERNMENT.
Every single issue that is immportant to conservatism, or important to some conservatives, would be advanced in our favor simply by limiting government!
Limiting government means one thing, functionally: limiting the money the government takes and prints.
Pro-life? Limiting government helps the cause.
Want school choice, educational reform? Limiting government helps the cause.
Support small business? Limiting government helps the cause.
And so on.
If a new party, such as the TEA (Taxed Enough Already) party, or a takeover of the GOP occurs, unity around the single idea of limiting government would be very powerful and keep advancing many causes.
And SSDI will be the vehicle of choice for funneling more guvmint money to po people.
However, the dirty little secret for the States is that Obamacare will shift up to 50% of the cost of Medicaid to the States! Since states cannot print money, and most are required to have a balanced budget, that means one thing: MASSIVE INCREASES IN STATE TAXES.
Dick Morris had a great piece on this last week. If I find the link, I'll post it. Here, I found it.
I strongly suggest people write their state agencies and casually ask, "How do you think you're going to like it when you lose 50% of your federal funding under Obamacare and somehow have to scare up funds through new state taxes?"
That ought to make even some of the Rats get all wee-weed up.
Get these folks working against Obamacare and we can increase our chances of saving the country.
In a word...NO.
All but our parents generation (mid 70's & up) have ever seen a real Depression.
IMHO, the relentlessness in goobermint pushing to place more spending and control ASAP is becasue of what is coming.
They do not want a WW III, so killing off the boomers, the sick, and the disabled leaves infrastructure in place and lets them redistribute the wealth as they best see fit.
Has the world economy ever seen such a scheme?
Think about it.......the goobermint is practically giving away the H1N1 vaccine to the kids (not infants). I've read that this particular bug shows traits of a man-altered virus.Think about it on just how much the goobermint has recently pushed these inoculations especially for kids.?
What better way to get rid of the elderly and the sick?
The recent CRU unavailing is a prime example of my complete distrust for those at the top running the show.
See my post #1122 on this thread:
Your assessment is spot on as Reagan knew this too and why he begged for a balanced budget amendment to the US Constitution.
Still we have no one and I mean no one (including Ron Paul) offering a plan to seriously reduce the size of goobermint, the amendment, reigning in spending now, and paying off out debt.
In the meantime, we are 300 yards from shore and the 5 piranha are taking chunks out of legs as we try to swim back to safety. We can also see the school of piranha (hundreds) 1/2 mi away upstream swimming straight straight for us.
Few statesmen are left now serving in Congress.....Jefferson repeatedly warned us about the nature of man and goobermint.
I mean the post #112..... I’m so displeased at the moment.
Yes, and with the Great Depression, many of the people who went through that did not already have McMansions full to the brim with clothes, shoes, five sets of dishes, four computers, gads of electronics, appliances, cars for each driver, and on and on.
IOW, they more or less NEEDED stuff eventually, whereas many boomers don't need much of anything --- ever again. So, in the Great Depression, the motivation to spend was there once the economics of spending came back. I don't think that will be the case with our Great Crash.
For example, my mother and her sisters got a couple of new dresses most every year until the Great Depression. Then they stopped getting stuff. This meant that for the next several years they had to make do with the 3-4 dresses they already had or could get as hand-me-downs, keeping them mended and trying to let them out or rework them as the girls grew older.
Many people today have closets and dressers full of clothes. If they totally stopped buying for the next five years, they'd still not even come close to wearing out (using up) all the clothes they already have!
As a society, we were much, much more affluent when the economy crashed than were most families during the Great Depression. Many boomers could go the rest of their lives without buying much of anything and still have everything they "need." It seems to me this makes it much more likely that a downshift in discretionary consumer spending becomes permanent.
I’ve got to skoot for now, but will come back to this thread later. Thanks!
I’m ambivalent about it.
The doppler affect and blowback could likely do a lot more than just get rid of bad banks.
btw...i don’t think they are cured yet...not by a long shot
Your points 1 and 2 seem in conflict to me.
If tens of millions of boomers die off and leave homes behind, there will be an even larger glut of home inventory than today, prices have to go much lower, and therefore young people starting out will necessarily be able to afford the homes. It is one or the other. For young people starting out to not be able to afford to own homes would require a lack of a housing glut.
So, which will it be, glut from dead boomers or unaffordable homes for young couples?
IMO, I’ve never seen retirees as a very big spending group. What do they spend?
They travel a bit here and there. They eat out some, but it tends to be lower end or moderate & at senior discount prices. The whole reason to offer senior discounts is because senior’s don’t tend to eat out very often.
Seniors don’t commute to work so they don’t drive much, and their low wear cars last much longer than when they were working.
They rarely buy clothes beyond replacing worn items at Walmart or KMart, and at that men will wear worn items until they are falling off.
They generally have a paid-for home, so they are not driving the mortgage market.
They don’t tend to embrace new technology so they get by just fine with their old 19-inch TVs, no ipods, no laptops, etc... They consume way less food as they age.
OK, they crank up the furnace a bit more in the winter and run the AC all summer, so they do use a bit more energy than when they were younger.
I just don’t see senior citizens as a big consumer group driving the economy. They cause massive medical spending. Beyond that, I just don’t see senior citizens as the consumption engine that was the 70% of GDP of late. They are not big buyers or consumers. Not that I have seen, so penny-pinching seniors aren’t going to have much impact on the economy. It is the people in their prime earning years who want a move-up home and a cabin by the lake, want a Lexus, decide to send their kids to an expensive private college or a dirt cheap junior college for 2 years instead.
I see these people driving the economy, not senior citizens. What am I missing?
GREAT POST. Very informative. Thank you much for it. It reeks of honesty at least. Freepers need to know that things will not turn rosy anytime soon and plan accordingly. Soon after Obama’s election, I predicted he would be a one-term wonder because 4-years later the economy would still suck, he would be blamed for it, and his party would be punished for it. I stand firmly by that prediction, which is looking better and better all the time.
Thanks for some compelling info.
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