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I don't see a good way out of it unless something creative comes along because dollars will continue to leak out of the economy if the world wants them. This will have a constant leveraging nature to is along with deflationary pressure domestically. And unless we get rid of the FIRE sector overhead we will be too expensive to compete on exports.
The tax that funds the SS program was been running a surplus for quite some time. That surplus was used to buy T-bills. The plan had been to sell those T-bills to pay for the baby boomers retirement. The problem with that plan now is it looks like the only buyer for those T-bills will be the Fed.
They are doing it to set the effective rate at zero. Fewer people certainly will want no returns, especially when they don't have much money as it is. The 1% are sitting on all of it.
OK let us look at it. What do you see when you look at it?
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Originally Posted by MrRational
More like a 30-40% OVER loaded semi.
Reduce the load to be within capacity... and it'll be just fine.
this quote says how I feel.
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Originally Posted by mathjak107
like i say it's always blame the dealer and never play the hand.
The hand we have is the current population base. Your idea about reducing the population is, well I'm not a big fan of it but functionally it has some merit. Practically I don't want to live in a country that would try to accomplish it.
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Originally Posted by mathjak107
the answer is most can not and will not do their own thang to help themselves. they will complain and complain, they will dream up answers they think are the solutions in their own head. they will believe their own bull-sh&t to be true and the only answer to the problem.
A lot wont even acknowledge that there is a problem. I have. Do you have any suggestions ideas about how to balance the governments books?
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Originally Posted by mathjak107
they will do all of the above but never deal with helping themselves to have a personal plan to get through the issues they complain about.
My personal issues that make my life interesting can be visualized by trying to surf the net with a computer missing the letters Gg Oo Yy and >. and it wont copy and past. If it doesn't involve those missing keys I can do it just fine. If it uses one of those keys it won't get done unless I get help. The plan I came up with for dealing with the current economic mess is simply me using “the keys I have” to get around “the keys I don't have”. If you follow my metaphor.
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Originally Posted by mathjak107
like i say it's always blame the dealer and never play the hand.
I'm playing my personal hand. I am doing what I can to get around what I can't do.
For most of the history the slope of the line has been 1.8. After WWII the slope of the line was more like 2.0 I couldn't find the graph that showed this sorry, Time below the curve has lead to time above the curve. The reverse is also true. We have spent a long time above the curve. We are headed below the curve. Mr. Rational's Idea about reducing the dead weight part of the population would actually do something to address the long term problem. I really don't like it but it would work.
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Originally Posted by mathjak107
it is always better to try something. even a half-assed plan is better then no plan .
I agree with you completely.
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Originally Posted by mathjak107
IT IS GREAT TO TAKE UP A CAUSE , BUT YOU NEED A PLAN FOR DEALING WITH THE CAUSE YOU WANT TO HELP IN CASE IT DOES NOT CHANGE .
if all you see is gloom and think you never can do something or achieve something then you never will.
I think that if I keep talking about what is wrong and what mint be done to fix it then something mint eventually get done.
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Originally Posted by NorthStarDelight
I agree with the above. Just do what's best for yourself and let the goobermint fall down on its own...lol.
The best thing we should all hope for is for the goobermint to do nothing in regard to tax rates - according to one active poster on these boards, the FICA rate would need to be raised to 16%+ in order to keep Social Security solvent, which means an actual rate of 32% for both the employer and employee contribution (or the total amount for the self-employed). Now, if such a thing actually came to pass, then we're talking about some serious doom, as the economy would be plunged into endless depression, and the black market economy would rule the day, as who in the world can pay such onerous tax rates??
Balancing the budget by raising the taxes does not appear to be functional.
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Originally Posted by NorthStarDelight
So yeah, let's keep putting Obamas and Bushes back into office, as they'll never raise tax rates to such obscene levels, and I see this as a GOOD thing, as I can save my own money and save for my own retirement. If Social Security goes broke, so be it, I'll find a way to make do without it.
Part of the problem with unfunded obligations and a fiat currency is that they get funded with printed money. Trust the Government is a recurring theme. They got us into this mess so why should we think they will get us out of it.
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Originally Posted by NorthStarDelight
So let's not rock the boat with insane ideas like a $30/hr min wage - things really aren't SO bad at the moment, so why not just leave it that way and do your own thang?
We have time to do something about what is coming our way. If it is intentional inflation to restructure our debts as a nation then that is what it is. But not to rock the boat is silly. We have very hard economic times coming our way. One way this can play out is with hyper stagflation. Really high inflation rates and really high unemployment. There are other ways it can play out, but not so many that look palatable.
Where do we take this next?
Last edited by pie_row; 02-18-2013 at 09:32 AM..
Reason: Fixing an eror in editing.
to be honest i don't fret to much over politics and economics, never did . as far as whether we balance our books or not if we can go on just the way we have it is fine with me.
it is all about having a plan that allows for uncertainty ,not ruling it out.
i am only concerned with balancing my books right now since that is all i am in direct control of.. i will shift gears along the way to deal with what can not be fixed as best as i can.
my concern since i am saying good bye to our pay checks is surviving retirement.
my efforts are all devoted to doing what i have to do and to learning what i have to know to see that goal through as well as learning enough so when i retire from what i am doing my other interest is financial planning... i hope to get licensed and do sme work helping others plan their retirement structures.
I don't see a good way out of it unless something creative comes along because dollars will continue to leak out of the economy if the world wants them. This will have a constant leveraging nature to is along with deflationary pressure domestically. And unless we get rid of the FIRE sector overhead we will be too expensive to compete on exports.
An enforced savings plan will tend to pull money back into the US against that leak your talking about.
The cost of the FIRE sector is in part a function of the total debt as % GDP. Reducing the total debt will tend to reduce the cost of the fire sector. Easiest way I see is with inflation. The hardest way is to write off 75% to 90% of the debt as bad. Their isn't a good way out of this mess that I can see as well.
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Originally Posted by gwynedd1
They are doing it to set the effective rate at zero. Fewer people certainly will want no returns, especially when they don't have much money as it is. The 1% are sitting on all of it.
How you get it out of their hands is by increasing wages.
to be honest i don't fret to much over politics and economics. as far as whether we balance our books or not if we can go on just the way we have it is fine with me.
The end game of going on the way we are is hyper inflation. We have some time before it gets here. Everyone still wants our money (debt) so until that changes things will tend to go on unchanged.
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Originally Posted by mathjak107
i am only concerned with balancing my books right now. i will shift gears along the way to deal with what can not be fixed as best as i can.
Mine are balanced. I have no debts.
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Originally Posted by mathjak107
my concern since i am saying good bye to our pay checks is surviving retirement.
Get a plot of land so you can grow food on it. As long as your health lasts you can feed yourself.
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Originally Posted by mathjak107
my efforts are al devoted to doing what i have to do and to learning what i have to know to see that goal through.
i think i would rather starve then work as a farmer in retirement ha ha ha if things are that bad i figure i can use my guns to get everything else i need.
SS ---is-- a govt program that TAXES every wage earner.
As citizens, we have a right to be concerned how that money is handled/mis-managed.
I take Mathjak's coments to mean-----------" don't voice an opinion about your state law on execution . Don't commit murder and it is none of your business"
---------ANY---govt tax'govt program IS the business of citizens like myself and the OP.
An enforced savings plan will tend to pull money back into the US against that leak your talking about.
The cost of the FIRE sector is in part a function of the total debt as % GDP. Reducing the total debt will tend to reduce the cost of the fire sector. Easiest way I see is with inflation. The hardest way is to write off 75% to 90% of the debt as bad. Their isn't a good way out of this mess that I can see as well.
How you get it out of their hands is by increasing wages.
The foreign interests will view too much inflation as a technical default. I have heard some therorize that unless the Fed bailed out the foreign banks, they may have already revolted from the dollar standard. So I think tax shifting from the FIRE sector and off industry, not just inflation, is more sound.
We have time to do something about what is coming our way. If it is intentional inflation to restructure our debts as a nation then that is what it is. But not to rock the boat is silly. We have very hard economic times coming our way. One way this can play out is with hyper stagflation. Really high inflation rates and really high unemployment. There are other ways it can play out, but not so many that look palatable.
Where do we take this next?
Well, for one thing, we can do the obvious - reduce the number of people drawing Social Security by raising the retirement age, including the early option - I think 65/70 would be a good start, perhaps rising to 75/80 two or three generations hence. It's only fair we do this, as people are living longer, so we need to balance out the average years of retirement vs working years - if people are living longer, then they need to work longer in order to support the corresponding longer years of benefit draw-down. Another obvious way to cost costs is to reduce benefits, which we can do via inflation and reduced COLAs or just an outright benefit cut across the board, say 20% or so. The third method, and the one that has the greatest public support, is to lift the cap on Social Security earnings to unlimited instead of the $106k or so we have now - this would bring in additional revenue without raising the FICA rate.
What I DON'T want to see is an increase in the payroll levy, as that'd crush the economy - more people would be out of work (and not paying into the system), and those who do have work would have less to spend, cutting down the economy even further. That's why I wanna scream when certain a individual states that FICA needs to rise to 16% (32% total ) - now, that's insane, and would never fly - thank god. But even a 1% rise would suck, and should be avoided at all costs - let's do the other 3 alternatives I listed above first and see if that doesn't balance the books.
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) - now, that's insane, and would never fly - thank god. But even a 1% rise would suck, and should be avoided at all costs - let's do the other 3 alternatives I listed above first and see if that doesn't balance the books.
