I do not support a bailout, nor do I support just arbitrarily screwing working people out of their pensions. What I like to see is someone held accountable. The money for these pensions funds was allocated but never put into the fund. It was used for other pet projects. Criminally incompetent. It was used to line the pockets of politicians and their hacks. Felony theft. I want to see those responsible for that decision in a fucking jail cell.
Pick your poison, social unrest, or...
- Thread starter Ricter
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At the tail end of a debt bubble, money is illusory. Several entities possess the same dollar. When it's time for the bubble to burst, the question is how to handle it. You can print everyone diluted dollars to spread the pain, but that makes the sophisticated people who have postured themselves to benefit from the crisis unhappy.
The likely result is dilution to the minimum extent necessary in order to maintain enough stability for the sophisticated people to keep their spoils.
The game has replayed itself over and over for centuries, throughout the Western world. The little people see money as their reward for the sweat of their brow. The financiers see it as something to be juggled to make a killing. They have the money to control the narrative until the clock strikes midnight for Cinderella. The best they can do after that is sow misdirected discord to keep the people from uniting and showing up at their gated communities with pitchforks.
The likely result is dilution to the minimum extent necessary in order to maintain enough stability for the sophisticated people to keep their spoils.
The game has replayed itself over and over for centuries, throughout the Western world. The little people see money as their reward for the sweat of their brow. The financiers see it as something to be juggled to make a killing. They have the money to control the narrative until the clock strikes midnight for Cinderella. The best they can do after that is sow misdirected discord to keep the people from uniting and showing up at their gated communities with pitchforks.
yes, ordinary people like me think of money as very finite in that I only have so much to last me to the end of the month, but government money can be created out of thin air, the only constraint being inflation.
I think back to the 1930's when the govenment started creating jobs for the unemployed, a little at a time, just enough to prevent social unrest. Then Pearl Harbor and suddenly the government had unlimited money to build bombs and B52s.
After you have jumped off the bridge is no time to try to figure out how to change the result of the jump. Learn from history what usually happens from implementation of your proposed action before not after implementation. The preceding assumes erroneously that the people in charge are really concerned about the people.THEY ARE NOT!!!!!!!! Political leaders of all ilk are usually in it for themselves or are academics with limited awareness of reality.
loyek and heypa's comments are both really interesting and unfortunately exactly right.
Which is why I don't accept the dichotomy of social unrest or more taxes.
the govt poses that crap to stop people from competing with the cronies for assets and politicians.
Lets have no income taxes and less unrest... we have a big enough economy to do it.
Which is why I don't accept the dichotomy of social unrest or more taxes.
the govt poses that crap to stop people from competing with the cronies for assets and politicians.
Lets have no income taxes and less unrest... we have a big enough economy to do it.
We can't have that. Impossible! Even if we tried, it would not be long before the rest of the world rejected the $USD as not only the world's reserve currency, but having any value or validity at all.... resulting, of course.... with the bankruptcy of all people and companies with their assets denominated in $USD.
The US would be MIIIIILES ahead if our Congress could limit spending to taxes collected.
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Goldman Weighs In On America's Pension Ponzi: Contributions Must Rise $100 Billion Per Year
http://www.zerohedge.com/news/2015-08-16/goldman-weighs-americas-pension-ponzi-contributions-must-rise-100-billion-year
"Just how big of a problem is this you ask? Well, pretty big, according to Moody’s which, as we noted last month, contends that the largest 25 public pensions are underfunded by some $2 trillion. "
From Goldman:
"Unfunded pension liabilities have grown substantially. There are several factors behind this, led by lower than expected investment returns and insufficient contributions from state and local governments to the plans. The two issues are related. The assumed investment return is used as a discount rate to determine the present value of liabilities. The higher the discount rate, the lower the estimated liability, and the lower the periodic payment into the fund a state or local employer is expected to make. There is, of course, no clear answer about what the discount rate ought to be, though the fact that the average assumption used by private plans has continuously declined for more than a decade suggests that the rates have probably been too high and that the current average assumption of 7.7% may come down further."
http://www.zerohedge.com/news/2015-08-16/goldman-weighs-americas-pension-ponzi-contributions-must-rise-100-billion-year
"Just how big of a problem is this you ask? Well, pretty big, according to Moody’s which, as we noted last month, contends that the largest 25 public pensions are underfunded by some $2 trillion. "
From Goldman:
"Unfunded pension liabilities have grown substantially. There are several factors behind this, led by lower than expected investment returns and insufficient contributions from state and local governments to the plans. The two issues are related. The assumed investment return is used as a discount rate to determine the present value of liabilities. The higher the discount rate, the lower the estimated liability, and the lower the periodic payment into the fund a state or local employer is expected to make. There is, of course, no clear answer about what the discount rate ought to be, though the fact that the average assumption used by private plans has continuously declined for more than a decade suggests that the rates have probably been too high and that the current average assumption of 7.7% may come down further."
http://www.zerohedge.com/news/2015-...un-moodys-blowing-whistle-pension-liabilities
The above is a major part of the problem. How in the hell can pension funds get those types of returns on relatively safe investments with today's low interest rates? The math simply doesn't work. For the math to work, there can be no recessions ever with around 5% fed funds rate.
The above is a major part of the problem. How in the hell can pension funds get those types of returns on relatively safe investments with today's low interest rates? The math simply doesn't work. For the math to work, there can be no recessions ever with around 5% fed funds rate.
I am confused by your comment.
Do you have any idea how many trillions the Federal Reserve System creates each year for its members account? How do you know that total is less than the amount of taxes collected?
We don't know the answer to this and similar questions. So I really don't have any idea how anyone could tell me that income taxes are needed to balance the budget.
The govt borrows the money it overspends. That does not cause the 700 percent inflation we have seen over the last 50 years in the face of massive increase in demand for the dollar.
Expanding the money supply does by creating electronic and printed dollars does.
http://www.federalreserve.gov/faqs/...mine-how-much-currency-to-order-each-year.htm
Do you have any idea how many trillions the Federal Reserve System creates each year for its members account? How do you know that total is less than the amount of taxes collected?
We don't know the answer to this and similar questions. So I really don't have any idea how anyone could tell me that income taxes are needed to balance the budget.
The govt borrows the money it overspends. That does not cause the 700 percent inflation we have seen over the last 50 years in the face of massive increase in demand for the dollar.
Expanding the money supply does by creating electronic and printed dollars does.
http://www.federalreserve.gov/faqs/...mine-how-much-currency-to-order-each-year.htm