Posted on 01/31/2015 6:43:09 AM PST by SeekAndFind
Let’s take a brief walk into financial reality for a moment.
At the time of this writing, the United States government’s official debt is nearly $18.1 trillion.
Now, let’s look at who the biggest owners of that debt are:
1) Taxpayers of the United States.
If you’ve held a job in the Land of the Free, 15.3% of your salary has gone to fund Social Security and Medicare.
Each of these programs holds massive trust funds that are supposed to pay out beneficiaries, both present and future.
Conveniently, the trust funds are required by law to buy US government debt.
And given that every single US taxpayer is an ultimate beneficiary of these trust funds, that ranks the people of the United States as among the biggest holders of US debt.
How sustainable is this? Not very.
The 2014 trustee reports for both Medicare and Social Security indicate that nearly ALL of the trust funds are sliding towards insolvency.
This isn’t some wild conjecture. The people in government who manage these trust funds are flat out telling us that they’re about to go bankrupt.
Let that sink in for a bit… then ask yourself: how long can two insolvent programs continue to be among the largest owners of US government debt?
2) The Federal Reserve
Now that we know Social Security and Medicare cannot continue to buy Treasuries indefinitely, we turn our attention to the Fed, which as of today, holds over $2.4 trillion in US government debt.
The Fed is essentially the lender of first resort to the US government and has singlehandedly managed to mop up the vast majority of government debt over the last several years.
Problem is, the Fed has to print money to do this. And the Fed has created so much money over the last few years that it’s now borderline insolvent.
The Fed’s capital now stands at just 1.27% of its total assets. To be clear, this is a razor thin margin of safety.
No other central bank in the world (except Canada, curiously) would be able to post such a pitiful number and still pretend to be credible.
But make no mistake, there is a level of monetary expansion that’s too far. And the Fed is already getting close to this danger zone.
Bottom line, the Fed is not going to be in a position to write blank checks to the US government indefinitely without becoming insolvent and causing an epic currency crisis.
And when that happens, where else can Uncle Sam go? Who else will buy his debt?
Simple. You.
More specifically, your retirement account.
According to Internal Revenue Service estimates, there’s close to $5 trillion in individual retirement accounts in the Land of the Free.
This is money that taxpayers prudently set aside for retirement, hopefully cognizant that Social Security isn’t going to be there for them.
Devoid of any other easy lender, $5 trillion is far too irresistible for such a heavily indebted government to ignore.
I’ve long warned that the government could easily nationalize a portion of all IRAs.
It would be so simple for them to do– just a single executive order and a couple of phone calls.
They’ll probably wait for some market crash, and then sell it to Americans like this:
“For your own protection, we will henceforth require banks to invest your retirement savings in the safety and the security of US government bonds.”
These bonds, of course, are so safe that they fail to pay an interest rate that even keeps up with inflation, effectively guaranteeing that you’re going to lose money.
It started happening last year.
In his 2014 State of the Union address, President Obama announced his MyRA program.
MyRA is basically an IRA that invests directly in… you guessed it… government bonds.
He pitched it as an easy for Americans to save for retirement “with no risk of losing what you put in”.
Step two came when both the President and Treasury Secretary embarked on a blitzkrieg-style marketing campaign to pump the program, pledging that they would aggressively push businesses to sign up their employees.
Now comes step three.
Find out more in today’s podcast where we talk about the obvious, looming threats to your retirement security, and the structures you can build to do something about it.
If you have an IRA, you need to know this.
I’ve also put together a free report about safeguarding your IRA; it’s a scaled down version of a premium report that I sent to our Sovereign Man: Confidential members recently, but it contains a lot of valuable information.
You can download it here:
https://s3.amazonaws.com/sm-cdn/blackpapers/IRA+Report-free.pdf
“”This was in 2010, so I don’t know how that is 14 1/2 yrs””
Boy! I have no idea what I was thinking of or what I saw but I don’t think I saw the date in any of the links in this thread...nothing here looks familiar. Sorry! I will go nuts until I find it...
bkmk
I’ve heard some Republicans suggest means testing for social security.
The only thing I can think of is I have become dyslexic in my old age and I must have read 2010 as 2001... I better stay away from the checkbook.
Social Security is already “means tested.”
http://www.ssa.gov/planners/taxes.htm
Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules.
If you: file a federal tax return as an “individual” and your combined income* is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
more than $34,000, up to 85 percent of your benefits may be taxable.
file a joint return, and you and your spouse have a combined income* that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
more than $44,000, up to 85 percent of your benefits may be taxable.
are married and file a separate tax return, you probably will pay taxes on your benefits.
I know, but I saw an interview on TV, I don’t remember who it was but I remember it was a Republican, suggesting that the amount of SS rec’d could be reduced for “wealthy” individuals.
Don’t worry about it, easy mistake to make. At least you got the correct century!
Paul Ryan wants it, so do many Tea Party leaders.
No, they will change the REAL rules. Not the arcane tax laws you mention. Here is the plan: your entire health care as you get older (Medicare will disappear) will be tied to your assests, bank account, IRA, 401K, fixed retirement, pension, and any gold or silver you managed to squirrel away.
Do you really think that a president that is so lawless cares about your IRA?
The most prolific criminal class in American history.
I don’t care how “fair” that may sound to some people, I don’t think it is fair to take 12.4% of a person’s wages all their life with the promise of retirement payments, then reneg on that promise if that person happens to have been successful and saved.
I have seen that a lot of people that don’t need their SS give the money to charity which is better than the gov’t keeping it.
I agree. The Govt’s answer is Tough.
In every instance, we have seen the Obama mantra: harm those who are productive, take from those who saved, hurt those who have. Especially those who are white. I do not make that latter statement in error. The Affordable Care Act has specific provisions to punish people of people of European descent, akin to the Nuremburg Laws.
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