We can do this peacefully this time or have a bitter struggle to the death. I'm good either way.
Posted on 03/30/2011 9:48:53 PM PDT by blam
Bill Gross: Without A Gigantic Reform Of Entitlements, America Will Default
Joe Weisenthal
Mar. 30, 2011, 8:00 PM
PIMCO boss Bill Gross has been warning against Treasuries for awhile, and recently he abandoned them completely.
In his latest investment outlook, he warns that America will default, thanks to trillions in entitlement obligations:
...the only way out of the dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways: 1) outright via contractual abrogation – surely unthinkable, 2) surreptitiously via accelerating and unexpectedly higher inflation – likely but not significant in its impact, 3) deceptively via a declining dollar – currently taking place right in front of our noses, and 4) stealthily via policy rates and Treasury yields far below historical levels – paying savers less on their money and hoping they won’t complain.
You can download the full report here (.pdf)
(Excerpt) Read more at businessinsider.com ...
You could fund “entitlements” Stuff we paid for, for a long time on the trillions Obama has funneled to cronies
Remember how congress screeched about the 160 mil in banker bonuses for a full month, while they shoveled 780 billion in printed IOUs to them?
While I admire him for pointing out the elephant in the living room, it’s futile thinking that this DISASTER around the corner will be handled in an adult manner.
...after all, half of the geezers on this site are all for cutting spending, as long as THEIR precious Social Security is not touched. And these are otherwise conservative people. For the rest of the country, it’s more like 95% of the people.
...so it’s over...all but the economic crash. Hopefully we’ll keep enough military capability around so we don’t get messed with, but even that’s in doubt each day Obama stays in office.
Bummer, I have kids.
Economic crash? Folks are getting rich on the market while they bleed your kids dry.
Rich I tells ya!
Which raises another question: What would America’s creditors be willing to do to prevent this “default” from happening and protect their investment?
First of all, stop calling your elders, “geezers”.
Second of all, your link in your sig does not work.
Carry on.
America will default? Look to CA first to see how it will look nationwide. We’ll show you how it’s done.
“First of all, stop calling your elders, “geezers”.
Second of all, your link in your sig does not work.”
Thanks...I’ll refrain from the first...distracts from the discussion and doesn’t help my side.
Thanks also for the link comment...my stupid mouse pad caused me to truncate. Check out the link...it’s some really good stuff.
my husband has worked and paid in for over 45 yrs NOW and I about 36 years....
what is wrong with expecting to have SS fairly distributed to us????
we are not the problem...
the problems is that we have given disability out like candy, allowed illegals and fresh immigrants to jump in and receive payments, and foremost, the govt has taken horrendous "care" of the money all of us have "contributed"
my hubby lost one pension to the corporate raider mentality, approved by federal judges so NO, we won't sit back idly and let another pension get stolen...
not sure what to do about it however...
Bob....rage against the machine...seriously..
...we must have positive outlooks and work for positive change..
..how can we look ourselves in the mirror if don't???
I agree with you and I am sure they are still collecting from you-they don’t want to pay you but they still want you to fund it. Why not get rid of grants, quit giving money to other countires don’t give Brazil 2 billion for oil- The government is not our friend and they are the problem not the SS recipients who were forced to pay into the system with a promise they would get money back when they retired. It is not the public that squandered the money on bridges to no where monuments to each other. My husband would gladly opt out of the SS system and forfeit all he has put inas long as they stop taking the money from him each month out of his paycheck
“not sure what to do about it however... “
That’s the problem. I’ve also paid in for decades, but I know that the money was spent once the feds got their hands on it.
I would be just as happy if we raised taxes enough to cover the costs...I don’t really care what we do, as long as we don’t crash the dollar and become Third World...which MUST happen if we don’t do something and soon.
But we won’t. 95% of the people will not stand for seeing Social Security get reduced...and the other 95% of the people will not stand for major tax increases (and I mean major).
So we’ll almost certainly wind up with a crashed dollar and the end of the US as we know it. That sucks, but it had to end that way, once government got their hands on retirement money (no different than a badly run country doing the same, as you well know).
“...we must have positive outlooks and work for positive change..”
I can’t be positive...I simply do the math. It is, or will soon be, over for us.
But sometimes countries can pull out of the gutter, if they unify around the REAL ENEMY (i.e., liberalism) and snuff out that beast. So there is hope (if conservatives step up to the task of identifying these people and just what they did to America)...but only after hitting rock-bottom first.
Yeah, the 160 mil was the proverbial shiny object used to distract attention.
The only “positive change” that can be had is by people becoming acquainted with the hard math of the issue and seeing that they’ve been promised a very fine free lunch on the backs of the young.
That’s all that Social Security is: An inter-generational grift writ large.
There is no “trust fund.” There is no “lock box.” Social Security is a “pay-go” scheme, where current benefits being paid to retirees are paid by the taxes collected from people who are still working.
Full stop. That’s it. These pay-go schemes work OK when you have a monotonically increasing base of people “contributing” to the stream of funds being used to make payments to those collecting. But in most developed countries with these schemes (western Europe, Japan, the US), we had a “baby boom” following WWII, then we had a sudden collapse of birthrate after about 1959 to 1960 or so. The Boomers are a demographic “pig in the python” bulge, and they’ve now reached the leading edge of retirement (the first boomer is 65 this year (2011 - 1946 = 65). Right on cue, social security started paying out more than it collects last year.
There are no ways out of this demographic mathematical bind but to:
1. Increase the retirement age. When the age of 65 was chosen, that was the median life expectancy for males in the US. Translated from mathematical lingo, it meant that half of men were DEAD by the age of 65, ie, they never collected social security. If they were married and had young children, then their survivors got some money. People who can and want to continue working should be allowed to, and not “forced” out of the labor pool by Social Security or tax policy. If a guy wants to work until the day he drops, more power to him.
2. Find any way possible to decrease benefits. The government started doing that years ago when they changed the COLA adjustments that Claude Pepper and his merry band of grifters put onto Social Security. But this hasn’t been enough, and as you point out, we keep offering benefits to more and more people who haven’t earned them. We need to cut them off, and then start in on means testing, fraud prosecution, etc.
Now, I mentioned that other countries have “pay-go” schemes as well. What are they doing with their demographic time bomb that is even now exploding on them? They’re cutting benefits, raising retirement ages, etc. People don’t like it, but in these other countries, no one is under any delusion that there ever was a “trust fund” or “lock box,” that there was some expectation that they had an “account” with the social welfare scheme.
They’ve always known that their pension schemes were welfare.
No one wants to educate Americans with the hard truth. The truth is, Social Security is a demographic ponzi scheme. The truth is, there is no trust fund. The truth is, the money you paid in has already been spent on deficit spending, and now the Social Security system holds trillions of dollars in US debt, which the Social Security trustees must cash in to pay benefits.
Those are hard, non-negotiable facts.
>> Those are hard, non-negotiable facts.
Yes, and whatever the fix might involve at the systemic level, the lesson for kids of all ages at the INDIVIDUAL level is:
“don’t count on social security to fund your retirement!”
Going forward, individuals need to take *personal* responsibility for their later years. It’s a sobering proposition but frankly it’s been that way in most places for most of recorded history.
So many entitlements...Department of Education, Department of Energy, EPA, DHHS, Arts funding, HUD, Department of labor...
All these unconstitutional entitlements must go before they steal the money people and their employers paid into for medicare and social security.
We can do this peacefully this time or have a bitter struggle to the death. I'm good either way.
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