How US Government Debt May Impact Social Security

By Peter Reagan -Re-Blogged From Newsmax

Fiscal year 2018 wasn’t a good one for U.S. government net-worth. While that may hardly be surprising, it’s possible we’re reaching a “tipping point.”

From an official report released by the U.S. Treasury, Sovereign Man pulled out a few key highlights:

  • In fiscal year 2018, the government’s total net loss was $1.16 TRILLION.
  • … they spent over $4.5 trillion.
  • … nearly HALF went to Social Security and Medicare.
  • … spent a record $523 billion just on interest payments on the national debt!

 

How US Government Debt May Impact Social Security
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BERNIE: ‘You’re Damn Right’ Health Insurance Companies Should Be Eliminated

[Not much doubt – the UGLY face of Socialism in the Democratic party. -Bob]

By Lionel Parrott – Re-Blogged From Liberty Headlines

‘You are not going to be able…to have cost-effective, universal health care unless you change the system…’

(Lionel Parrott, Liberty Headlines) Democratic senator and presidential candidate Bernie Sanders (D-Vt.) isn’t backing down from his call to eliminate health insurance companies, according to an article from The Hill.

After the Republican National Committee (RNC) tweeted Tuesday that the Vermont senator had called for eliminating health insurance companies, Sanders proudly tweeted back: “You’re damn right.”

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National Debt Is An ‘Economic Threat’ To The US

By Mac Slavo – Re-Blogged From Freedom Outpost

In an incredibly obvious statement, National Security Advisor John Bolton has declared the high level of national debt an “economic threat” to the United States. Unless you have been living under a rock for the past ten years, you know that statement is not only true but obvious.

Bolton claimed that the national debt is a big problem and tackling it requires significant cuts to the government’s discretionary spending, while most other economic experts say entitlement spending is the biggest concern. According to Bloomberg, Bolton was quoted as saying: “It is a fact that when your national debt gets to the level ours is, that it constitutes an economic threat to the society. And that kind of threat ultimately has a national security consequence for it.”

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New York City Joins The “Imminent Bankruptcy” Club

By John Rubino – Re-Blogged From Dollar Collapse

The public pension crisis is the kind of subject that’s easy to over-analyze, in part because there are so many different examples of bad behavior out there and in part because the aggregate damage these entities will do when they start blowing up is immense.

But most people see pensions as essentially an accounting issue – and therefore boring – so it doesn’t pay to go back to this particular well too often. Still, New York City’s missing $100 billion can’t be ignored:

New York City Owes Over $100 Billion for Retiree Health Care

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Is Canada’s Health Care System Better Than Ours in the US?

By Carlin Becker – Re-Blogged From IJR

Health care is always on Americans’ minds, and the politics around keeping people insured and healthy, cutting costs and providing high-quality care remains a critical issue.

While some have argued for deregulating the health care industry, insisting less red tape and more competition would yield better results, others on the political spectrum have pushed for a government-run system reminiscent of our neighbors to the north — but is Canada’s health care system really better than ours?

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The Big Pension Grab

It has been quite some time since we last collaborated on an article, opting instead to chase other pursuits and let some of the hysteria going on in the world fade into some type of steady state. It hasn’t happened, but there are pressing matters that need attention regardless. The circus going on all around us makes for great theater and distraction – and that is its intent.

The topic at hand is the failing pension and retirement system. Americans are notorious for spending well in excess of what they make, saving nothing in the process. The only way most save are the deductions from their paychecks for a 401k or IRA. Or perhaps they contribute to an IRA at tax time, when they realize doing so will reduce their tax liability.

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Trustees Report: Medicare to Go Broke 3 Years Sooner

By Associated Press – Re-Blogged From Newsmax

Medicare will run out of money sooner than expected, and Social Security’s financial problems can’t be ignored either, the government said Tuesday in a sobering checkup on programs vital to the middle class.

The report from program trustees says Medicare will become insolvent in 2026 — three years earlier than previously forecast. Its giant trust fund for inpatient care won’t be able to fully cover projected medical bills starting at that point.

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Out Of Money By December 12th – Social Security Partial Inflation Indexing (Part 2)

By Daniel Amerman – Re-Blogged From http://www.Silver-Phoenix500.com

Most advice on long-term planning for retirement and Social Security benefits is based on the assumption that Social Security will fully keep up with inflation. As we are establishing in this series of analyses, the full inflation indexing of Social Security is a myth and there are major implications for standard of living in retirement as well as the associated decisions with regard to both Social Security and investment planning.

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Three Myths About Fixing Social Security

By Brenton Smith – Re-Blogged From Newsmax

Social Security is the largest, and arguably most important, program in the federal government. It is a life-line for millions. For the rest of us the program is a set of never-ending, polarizing arguments.

The contentiousness is caused in large part by the number and conflicting nature of the urban legends surrounding the system. Everyone has a fact that is someone else’s myth.

These convictions about the program shape who voters elect, and seriously limit what candidates are willing to say to the electorate. These beliefs have so penetrated the public conscience that actual policy makers are left herding unicorns.

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Higher Interest Rates May Force Higher Inflation Rates

By Daniel Amerman – Re-Blogged From http://www.Gold-Eagle.com

1) Financial analysis of the three way relationship between interest rates, inflation and the U.S. national debt.

2) Higher interest rates causing higher interest payments on the $20 trillion national debt would ordinarily cause soaring deficits over time.

3) Detailed analysis of the “loophole”, which is that if inflation even moderately increases – then interest rates can rise without exploding the real debt.

4) This simultaneous increase in interest rates and inflation would have a major impact on all markets, as well as long term retirement planning.

5) The logical response to rising interest rates may be to sharpen one’s focus on how to better deal with higher rates of inflation over the long term.

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Larry Kudlow: Democrat Plan for Government-Run Healthcare a ‘Disaster’

By Rob Williams – Re-Blogged From Newsmax

Larry Kudlow, the economist and former adviser to President Ronald Reagan, said the economic agenda spearheaded by Senate minority leader Chuck Schumer, D-N.Y., will be a “disaster,” if Medicaid is any guide.

“A government plan is not going to work. Medicaid, which is a disaster and has spiraled out of control and has expanded and expanded and expanded with no eligibility requirements anymore – that’s the perfect example,” Kudlow said on CNBC. “If you want a Democratic program that is going to be government-run, single payer – take a look at Medicaid, which has been a disaster.”

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Senate Pushing Obamacare Bailout

By Bill Hoffmann – Re-Blogged From Newsmax

Sen. Rand Paul, R-Ky., told Newsmax TV on Thursday he remains dead set against the newly tweaked Senate healthcare bill and warned Republicans they will be clobbered with blame when their watered down version of the failing Affordable Care Act similarly begins to collapse.

“I don’t think some miracle happens with this Republican plan,” Paul, a Kentucky Republican, said on “Newsmax Now” with Bill Tucker. “The main thing that happens is now the . . . dysfunctional part of the marketplace is going to be blamed on Republicans.

Important: Newsmax TV is available on DirecTV Ch. 349, U-verse 1220, and FiOS 615. If your cable operator does not have Newsmax TV just call and ask them to put us on — Call toll-free 1-844-500-6397 and we will connect you right away to your cable operator! Continue reading

How to Run a Medicare Surplus Without Raising Taxes or Cutting Benefits

By Chuck Bolotin – Re-Blogged From Newsmax

The numbers are hard to ignore.

According to the 2016 report from the Boards of Trustees, Medicare Part A will run out of money in less than 11 years. As a country, the United States is experiencing “deer caught in the headlights syndrome”; We’ve been alerted to a grave impending danger, but we’re frozen into inaction.

Whether we choose to accept it or not, something has to give. The truck is barreling down the road, and if we don’t do something soon, we’ll all be roadkill. Why don’t our leaders act? Because they can’t come up with a solution that doesn’t either cut Medicare benefits or raise taxes, or both, and what politician wants to run on a platform of cutting benefits and / or raising taxes?

I am proposing a third solution, one that will not only eliminate the Medicare funding deficit without raising taxes, but will do so without cutting benefits: Provide Medicare recipients with a voucher for 75% of what Medicare would pay for their procedure in the U.S. and then let them receive their healthcare services anywhere in the world they choose.

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Economy Contracting But Expect Higher Stock Prices

By Chris Vermeulen – Re-Blogged From http://www.Gold-Eagle.com

The United States is the world’s largest and most diversified economy! It is currently suffering through a protracted period of slow growth which has held down job creation and labor market participation.  The Pew Research Center reported, in late 2015, that a mere 19% of Americans trust the government either always or most of the time.

The FED must print more money in order to keep the party going forward.

The bottom line is that this current bull market has been driven mostly by corporations which are buying back their shares, over the years. Individual investors have increasingly been moving out of equity mutual funds and into equity ETF’s.

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Phasing Out Social Security

cropped-bob-shapiro.jpg   By Bob Shapiro

Social Security is in trouble. Money going out should exceed money coming in within three years. Of course, the current income on the Treasuries in the Trust Fund are counted as real, even though those Treasuries are little more than IOUs from Uncle Sam’s left pocket into his right pocket. In real world terms, the Trust Fund already is in Deficit.

Even with the rosy Treasury assumption, the Trust Fund balance should be zeroed out within 15-20 years, depending on whose projections you use.

Image result for Social Security Deficit

Economics Professor Laurence Kotlikoff of Boston University calculates that the actuarial deficit is around $100 Trillion, so anyone who says that we can tinker here and adjust there to save Social Security is just not living in the real world.

Social Security is dying. Social Security will end. The only question is whether it ends in a collapse – causing tens of millions of retirees to become destitute overnight – or whether Social Security is phased out, allowing current retires to get all they expect.

I suggest a phase out – a very long phase out.

  1. Today, end filing for early retirement for Social Security benefits. Seniors who already are receiving early benefits may continue, but no further applications will be accepted or processed. Transfer all non-retirement portions into one of the Welfare programs.
  2. For all Americans currently over 60 years of age, they may file and receive full Social Security benefits when they reach the current full retirement age.
  3. For all Americans currently under 60 years old, their full retirement age will be raised by one month for every two months until they reach 60. For example, a 50 year old has 120 months before he reaches 60, so his retirement age will be 60 months later than the current full retirement age.

    Image result for roth ira

  4. Americans under 60 may choose to opt out of Social Security. By opting out, they forfeit any accrued Social Security benefits. They will be allowed to deposit their FICA deduction tax free into a Roth IRA – that’s double Tax Free. The employer match, and self-employment tax, will continue to go into the Social Security Trust Fund. (This will cause large deficits near term but large surpluses down the road.)
  5. At some point, every American will be off Social Security, either by dying or by opting out. Any money remaining in the Trust Fund will go into the General Revenue Fund.
  6. Employer match after that point either:
    1. May be ended
    2. May go into the General Fund
    3. May by added to the employee’s Roth IRA

Image result for phase out

This phase out easily could take 60 years to complete. It will not be painless as the younger an American is, the less he will receive in benefits. But, it will put the burden where it can be handled most easily – with younger workers who have more time to plan. And, it sets up a system which still requires putting money aside for retirement, but that money is owned and controlled by each individual American worker.

It should be noted that Medicare is under the same pressures, also with a calculated actuarial deficit around $100 Trillion. A similar phase out for Medicare also makes sense.

 

Social Security And The National Debt Are Misleading The American Public

B Daniel Amerman – Re-Blogged From http://www.Silver-Phoenix500.com

We are told that many economics experts don’t worry about the total national debt because $5 trillion of that debt doesn’t really exist; it is rather just a theoretical bookkeeping transaction for money that the federal government owes to itself. Netting out this bookkeeping entry then allows some authorities assert that while the debt is a bit on the high side relative to the size of the economy, it is far from historically unprecedented, and certainly no cause for despair or rash talk about insolvency.

We are also told that many financial experts don’t worry about the solvency of Social Security and other federal government retirement programs, because they are funded with $5 trillion of the safest assets on earth, those being United States government Treasury obligations (i.e., the national debt), which are being held for our benefit by the federal government.

Unfortunately, both statements cannot be true simultaneously.

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A Government Ponzi Scheme Starts To Crack

By Nick Giambruno – Re-Blogged From http://www.Silver-Phoenix500.com

Government employees get to do a lot of things that would land an ordinary citizen in prison.

For example, it’s legal for them to threaten and commit offensive, rather than defensive, violence. They can take property from others without their consent. They spy on anyone’s email and bank accounts whenever they please. They go into trillions of dollars in debt and then stick the unborn with the bill. They counterfeit the currency. They lie with misleading statistics and use accounting wizardry no business could get away. And this just scratches the surface…

The U.S. government also gets to run a special type of Ponzi scheme.

According to the Merriam-Webster dictionary a Ponzi scheme is:

[A]n investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.

In the private sector, people who run Ponzi schemes are rightly punished for their fraud. But when the government runs a Ponzi scheme, something very different happens.

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Tea Party Drinking Too Much Decaf

By Michael Pento – Re-Blogged From http://www.Silver-Phoenix500.com

On December 16th, 1773 the Sons of Liberty in Boston, in protest of the Tea Act, destroyed an entire shipment of tea sent by the East India Company, in a political protest referred to as the Boston Tea Party.

Following the Wall Street bail-outs in 2009, a political movement also protesting their lack of representation in government sought a reduction of the U.S. national debt and deficits by reducing government spending and lowering taxes. They were referred to as The Tea Party, named from the aforementioned Boston variety.

Since then, supporters of the Tea Party have had a major impact on the internal politics of Republicans and have helped secure both houses of congress. But these representatives who were elected to bring fiscal discipline to Washington have failed to deliver on their promises.

A year before The Great Recession the Federal deficit was $162 billion, it peaked in 2009 at $1.45 trillion and this year came in at $439 billion, and is projected to increase significantly after 2018. All this overspend has driven our national debt to over $18 trillion dollars, which is already north of 100% of the Gross Domestic Product.

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Fewer Workers, More Beneficiaries, Less Prosperity

By Bill Bonner – Re-Blogged from http://www.davidstockmanscontracorner.com

In politics and economics, most people believe what isn’t true: that the common folk select their leaders … and that these leaders are wiser than God.

We recall an early experiment. The pilgrims washed up in the wrong place … and then proceeded to almost exterminate themselves with clumsy central planning. Their system discouraged work and encouraged zombies. Wrote Plymouth County governor William Bradford:

 [The system of] taking away of property and bringing [it] into a commonwealth [caused] confusion and discontent [and] retarded much employment that would have been to benefit and comfort [of the settlers].

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Believing Impossible Things

cropped-bob-shapiro.jpg   By Bob Shapiro

The other night, I talked with my new friend Jack about the Economy, Taxes, and eventually Social Security. I explained that the unfunded liability for Social Security was far beyond what was possible to meet, and that somewhere down the road, Social Security would default.

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Federal Budget in Pictures

Federal Spending and Debt are Out of Control – Re-Blogged From http://www.heritage.org

If America does not change course, the future will be dramatically worse. Now more than ever, it is crucial that Americans understand what our nation’s spending, taxes, and debt mean for them and their families. The Heritage Foundation’s Federal Budget in Pictures offers a unique tool to learn about the federal budget in a clear and compelling way.

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Stolen Retirement

cropped-bob-shapiro.jpg   By Bob Shapiro

I’ve been reading about retirement lately. One piece of the retirement planning puzzle is figuring out how much money you need.

Let’s make some assumptions, for the purpose of this discussion – your requirements likely will vary considerably. Your annual earnings over your work life average $60K (near the current median family income),

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When Does Helping Actually Hurt

cropped-bob-shapiro.jpg   By Bob Shapiro

The US Cost of Living has gone up relentlessly since Eisenhower was President – sometimes faster and sometimes slower. Every Administration, whether Republican or Democrat, has seen a higher CPI reading than his predecessor.

Some categories have gone up faster than others, year after year. Much of the reason for these categories not only rising year after year, but rising more quickly than other categories, is that this is where government money has flowed.

Let’s look at a few examples. The cost of a college tuition and the cost

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Government vs Free Market Solutions

cropped-bob-shapiro.jpg   By Bob Shapiro

I have written several times about how we should allow the Free Market to provide services rather than give the job to a government agency, mentioning ObamaCare and Medicare specifically. I have said that the Free Market will produce better, more efficient, more innovative results.

Now, it’s not that the people working for the government are trying any less hard to do a good job, compared to their private sector counterparts. When I worked as an outbound mail manager at a large mail service

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The Holiday Buying Season

cropped-bob-shapiro.jpg   By Bob Shapiro

When I first started working, the maximum yearly salary which required a FICA deduction was $4,800. (Yes, I’m old – don’t make fun.) Once you reach the maximum earnings, FICA deductions end for the year, and you get a bump up in your take home pay. (The Consumer Price Index (CPI) today stand more that 7 times as high as in 1966.)

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American Generosity vs Entitlements

cropped-bob-shapiro.jpg   By Bob Shapiro

Many people doubt the generosity of Americans, especially Americans. They don’t want to depend on the generosity of strangers to provide food for the hungry, shelter for the homeless, medical care for the medically indigent, or education for the poor. For them, if we don’t force all those American versions of Scrooge to cough up tax dollars, those in need won’t be provided for.

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Phasing Out Medicare

cropped-bob-shapiro.jpg   By Bob Shapiro

We’ve talked about phasing out Social Security and Food Stamps in a way that doesn’t hurt current beneficiaries of these programs, as well as stopping ObamaCare before it can become too intrenched.

But, the grand-daddy of the entitlement programs, as far as how deeply into the actuarial deficit hole the US has descended, is Medicare. By some measures, the US would need well over $100 Trillion in the bank today, earning interest, to pay for all the future promises of just this one program.

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