Wednesday, April 13, 2016

Prediction of a Guanteed Crisis

- "The beauty of compound interest is that it keeps growing even without water."
-  Old Jewish proverb.

When Eastern Airline got killed by deregulation which was signed into law by Bill Clinton, not only did he murder the pension program of all the employees of that airline, but thousands of others across the nation. How soon people forget. Anyway, the government used a back-up plan for these people. It is called the Pension Benefit Guaranty Corporation. It takes over failed pension plans of private companies. They have $168B in liabilities and $88B in assets. Not looking good. Anyway, for many workers, something is better than nothing. Just ask the 20,000 A & P Grocery chain workers who worried that they were going to be ripped off. Well, in a sense they were, but they will now collect most of what they were due.
Now, I predict this program will be expanded and probably will add a new feature, taxpayer revenues. You see, by the kindest of some legislatures to cover the lying, greedy executives of many of our private corporations, this plan has saved millions of workers and fulfilled the promise of a pension with their employment and loyalty to a company. These executives never paid into their employees retirement program as promised and so, the government came to the rescue.
National, State, Local and City
government agencies are doing exactly the same thing as the private executives did in the private sector. They are not paying into their respective pension programs. Dear reader, both the Democrats and Republicans are guilty and corrupt!
At present, the unfunded liabilities for various federal employee programs and military benefits is around $3.5Trillion. This figure equals 20% of all US GDP. Think that is bad, read on!
Then, combine that number with state and local government pension plans and the percentage of GDP increases to 40%. It gets even worse than that.
Now, add the elephant labeled social security to the entitlement scenario. By the way, dear reader, it pains me to include social security to this mess because in reality the benefits from the social security program has already been received by the agency. It is complied and returned based on the redemptions over the person's working years. The money forms the individual beneficiary retirement supplement. Social Security was never intended to be a pension, but in reality it is. Back to the equation. In addition to the elephant, there is the gorilla called Medicare. Together, these two programs raises a debt that needs to be paid every year and it balloons the estimated yearly liability to $13.4T or 75% of all GDP. Now, how can the government do anything constructive at all because with our national deficit that needs to be paid there won't be any money left for anything! This, by the way is the real reason for low interest rates around the world. Fiat money is a corrupt policy that devalues money in circulation and this inflationary aspect is classified as a positive economic indicator. BS!
That's Not All, Folks!
there is also other obligations on the books like hospital insurance component of Medicare which will add another $3.2T to the pending disaster which will bust any budget and this crisis is coming to us all sometime in 2018. I also predict that Chicago will be the next major US city to follow Detroit. In fact, it will be a double-dip as Illinois will be the first state to stare at bankruptcy. We'd better start protecting whatever we got left and put tariffs on anything that is imported. Screw all the opposing shills! He may not have any tack, but Trump is right on that call. Keep in mind this is all due to both political parties that have not lived up to their obligations to do what is best for America caused by their overspending and the Federal Reserve who backs up their recklessness by printing money. End the Fed!