During the State of the Union Address, the president said the Republicans want to cut Social Security. Several boos were heard; Rep. Marjorie Taylor Greene shouted “liar!” The pushback was swift; a nonsense deflection of the major problems facing America.
Social Security accounts for almost 20% of federal spending, approximately $1.25 trillion. By 2034 it’s estimated to only be able to cover 77% of scheduled benefits.
Andrew Biggs, at the American Enterprise Institute told ABC news: (emphasis mine)
“Congress has been a poor steward of this program, in the sense that they simply delayed acting on the solvency issue and it’s clear they’re delaying for political purposes because they don’t want to make the difficult decisions.
But it can’t kick the can down the road forever. And the longer you kick it down the road, the harder it gets.”
Social Security is the tip of the iceberg. Politicians of all flavors are standing on the deck of the Titanic, the iceberg is looming, and they do nothing meaningful; their only concern is placing blame on their political opponents.
Social Security’s solvency is pale in comparison to the dangers looming ahead.
Deficit spending has skyrocketed; congress shows no fiscal responsibility whatsoever. They used to borrow money to support their folly. Since 2008, they borrowed what they could at artificially low interest rates, while the Federal Reserve created trillions out of thin air to make up the shortfall. Inflation is raging, the dollar is tanking and could easily collapse. Politicians are doing what they do best – ignoring the real problems – while screaming that it is their opponent’s fault.
As the debt ceiling showdown nears, the noise level will be unbearable, politicians and news media shrieking at one another. The government, as always, will threaten to stop paying social security and other social programs to create public pressure on congress to do something and get the debt ceiling raised.
“Vote for me, I’ll make all your problems go away!” BS, the politicos broke it and don’t have the courage to fix it.
Bill Bonner explains it clearly: (Emphasis mine)
“The fight over the debt ceiling increase is a sham battle. Both sides fire blanks. Both vow to fight to the last man to get what they want.
…. They say that every time the ceiling is raised. And in the end, the ceiling is raised without any real constraints on federal spending.
Yes, the decline of the US empire happens with the advice and consent of both parties.
Republicans and Democrats pretend to be fierce competitors. But the typical member of congress has much less in common with his own voters than with his fellows in the Capitol – even those in the opposite camp. …. They all…earn the same amount of money – enhanced by the same slimy contributions from the industries they regulate. …. They all have the same interest in seeing the flow of money from the public to the elite deciders continue without interruption.”
When the dust clears, “politicians” will claim victory, trillion-dollar deficits will keep their gravy train rolling.
The binge spending continues – until it stops!
The Washington Examiner updates the scorecard: (Emphasis mine)
“The federal deficit was $460 billion through the first four months of the fiscal year,…a 78% increase from the same period a year before.
Revenues…were 3% lower than during the same period,…while spending was 9% higher.
…. The U.S. borrowed $39 billion this January alone, while January last year saw a $119 billion surplus, a difference of 133%.
‘Today’s Treasury numbers confirm that, when it comes to unsustainable borrowing, our nation is quickly reverting to type. In just the first third of the fiscal year, we’ve already borrowed $460 billion, or $3.8 billion per day,’ said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.”
The US Debt Clock projects government debt over $44 trillion by 2027. The government will be forced to raise interest rates if they wish to continue borrowing to finance their reckless spending.
CNN warns:
“The US is paying a record amount of interest on its debt. It’s only going to get worse….
…. The Treasury Department paid a record $213 billion in interest payments on the national debt in the last quarter of 2022, up $63 billion from the same period a year earlier.
“The fourth-quarter tab was also nearly $30 billion more than in the prior quarter, which is the largest quarterly increase on record”, said Jerry Dwyer, an economics professor emeritus at Clemson University.
Borrowing costs are expected to become an increasingly heavy burden in coming years.
…. Until recently, it cost the federal government very little to issue debt to finance its operations.
“It was almost free money,” Dwyer said. “You could borrow a trillion dollars, and if you financed it with Treasury bills, you paid almost no interest. But interest rates weren’t going to stay there forever.”
| “Considering these facts, it should be clear that the irresponsible ones are those who think the government should increase its credit limit without cutting spending.”
— Ron Paul |
…. The spike in interest payments also contributed to the federal government hitting the debt ceiling that much faster. And it adds to the pressure on Congress to raise taxes, cut spending or allow the government to borrow more to meet all its obligations.”
Interest on the national debt will soon dwarf the cost of social security benefits. When the party stops, does the government default on it’s debt, go to war and/or cut entitlement programs? Frightened politicians will go to extraordinary means to retain their power.
What about Social Security?
Despite the rhetoric, the politicians are consistently weaseling out of commitments they know they can’t keep. I recently wrote, Dealing With Reality – There Is No “Security” In Social “Security.”
We recently received our annual proclamation; they were raising our inflation adjusted benefits 8.7% Why did our net income only go up 5.4%, while our Medicare premiums increased 35%?
Over 66 million people receive Social Security checks, the politicians have to reduce benefits without causing voters to storm the palace.
The day of reckoning is looming near.
I loved Chuck Butler’s comments about interest costs affecting HIS social security:
“…. Those numbers will pale when compared to future costs… Hello, Mr. Butler? Yes, it’s me, how can I help you? This is the Soc. Security Administration, and we have some bad news for you. You see, the Gov’t can’t pay your Social Security payment, because our bond servicing costs have taken over all of our tax receipts…
And I respond… But, it was MY MONEY! I put that money in there per the requirements through the years, and it was for my golden years! And now you’re telling me that you spend MY MONEY? You rotten tomatoes, I hope you rot in… hello, operator….
…. Ask me no more questions. Please tell me no more lies.
OK, for those of you who are wondering if that really happened… No, it did not, it was just me playing out a future call that could happen, given our soaring bond servicing costs!”
Yes, 66 million Americans were told there is a trust fund and the government is saving OUR money for OUR retirement.
It’s a lie, they spent OUR money. In response to my article, subscriber Dan B. writes: (Emphasis mine)
“I doubt that 1 person in 100,000 living in America understands this article. But your article is correct and for reference please look up the SCOTUS decision made in 1937, written by Chief Justice Benjamin Cardozzo, who stated that the tax on an employee’s wages, plus the excise tax paid by the employer are not intended to be used as a retirement fund, but they are placed in the general fund of the USA to be used as congress directs every year.
FDR had campaigned earlier that the funds were to be used as benefits for retirees, but changed course during the hearing and argued the funds were to be placed in the general funds and used as directed by congress each year. The SCOTUS agreed with this argument, and allowed congress to collect these taxes ever since. Social Security payouts are included in the annual budget congress approves each year.”
Since Social Security’s inception all politicians reinforced the illusion that OUR money was tucked away safely for OUR retirement.
We can raise the debt ceiling until hell freezes over, while lenders demand even higher interest. The house of cards is collapsing; politicos and citizens alike will be forced to face reality; OUR retirement money is gone.
What can we do?
Despite the government offering incentives to wait before filing, there are no guarantees. The cookie jar is about empty, claim your benefits as soon as you can.
Chuck always asks the question, “Got Gold?” He sent along the following quote:
“Governments lie; bankers lie; even auditors sometimes lie: gold tells the truth.”
— William Rees-Mogg.
Who knows what desperate politicians will do? While politicos squabble over the debt ceiling, the debt is unsustainable, along with the buying power of a dollar. Expect benefit reductions, higher taxes and inflation. Get out of debt, budget accordingly, hedge your bets with gold and most of all – Don’t get sidetracked by the political shenanigans.
For more information, check out my website or follow me on FaceBook.
Until next time…
Dennis
“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken
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MOAR, duh . . .
SVB and the Only Choice We Have
Keep in mind who these depositors are: the very very wealthy in the West Coast venture capital world. The corruption didn’t start just with the bank. The VCs often initiated it. As a friend and former Silicon Valley entrepreneur pointed out to me recently:
Where Does That Leave Us, Part I
Where that leaves us is here: The U.S. banking system, which hasn’t been private in my recent memory, has been officially taken under the wing of the federal government, with every deposited dollar now de facto insured by the FDIC.
Where Does That Leave Us, Part II?
The second “where does that leave us?” leaves the financial realm and enters the political. If Saagar Enjeti is right (see the clip above), the rich decided that taking even a 10% loss (“haircut”) via the normal unwinding process was still too big an ask.
The Only Choice
Which brings us to the point of this piece. If indeed…
• The culture of the obscenely wealthy is “pathological” and predatory.
• There’s one set of rules for the rich, another for the rest of us.
• They will never stop asserting their right to profit and thrive at everyone else’s expense until they are forcibly stopped.
The Government cares about you Charade….
In nursing homes, impoverished live final days on pennies
New pants to replace Alex Morisey’s tattered khakis will have to wait. There’s no cash left for sugar-free cookies either. Even at the month’s start, the budget is so bare that Fixodent is a luxury. Now, halfway through it, things are so tight that even a Diet Pepsi is a stretch.
“How many years do I have left?” asks 82-year-old Morisey, who lives in a Philadelphia nursing home. “I want to live those as well as I can. But to some degree, you lose your dignity.”
Across the U.S., hundreds of thousands of nursing home residents are locked in a wretched bind: Driven into poverty, forced to hand over all income and left to live on a stipend as low as $30 a month…
Nearly two-thirds of American nursing home residents have their care paid for by Medicaid and, in exchange, all Social Security, pension and other income they would receive is instead rerouted to go toward their bill. The personal needs allowance is meant to pay for anything not provided by the home, from a phone to clothes and shoes to a birthday present for a grandchild.
One problem: Congress hasn’t raised the allowance in decades…
Medicaid was created in 1965 as part of the Great Society programs of Lyndon B. Johnson. A 1972 amendment established the personal needs allowance, set at a minimum of $25 monthly. Unlike other benefits like Social Security, cost-of-living increases were not built into personal needs allowance rules.
Had it been linked to inflation, it would be about $180 today. But Congress has raised the minimum rate only once, to $30, in 1987. It has remained there ever since.
https://apnews.com/article/nursing-home-medicaid-personal-needs-allowance-poverty-2e0a2d90d7d63d4b476397a50a9cddff
How long till we all take the final journey to the Soylent green factories?
My plan is to swim to Cuba from Key West when the time comes for me to go into a “home”.
I just came up with a new retirement plan. Minnesota doesn’t have the death penalty, so all I have to do is commit a capital crime. Voila’ – 3 hots and a cot. Mama didn’t raise no fool.
And all the black cock you can handle ,no thanks.
LOL
You may want to transition into a trans lesbian so you can be put in the wimmens prison.
Meanwhile, in Europe….