The Social Security Trust Fund should be solvent and able to continue to pay all benefits (including cost-of-living adjustments each year), except for the fact that although everyone paid into the trust fund with every paycheck and their employers had to match it, Congress stole, pilfered, plundered, and embezzled it all.
By Mary Halloway Love
(INTELLIHUB) — The term “trust fund” is quite ironic, because there is no accountability. Is the answer really to cut the benefits for the most downtrodden?
The costs of fiscal tightening will soar and even more workers will lose their jobs with the implementation of Obamacare—only one of the many consequences that will result from this atrocity. High unemployment is here to stay with this president, especially when the statistics are fabricated to make his numbers meet whatever level or point he says they will. On April 5, 2013, the unemployment numbers warned us that the economy was still slowing. The U.S. Bureau of Labor and Statistics said that March’s participation rate was at its lowest since 1979.
Along with these troubles, the quantitative easing that the Fed has done results in nothing more than creating additional U.S. Federal Reserve notes. As Bill Gross said, it is nothing but then “monetary Red Bull.” Quantitative easing may be a quick shot in the arm, but the crash is hard. In addition, there have been no increases in recovery to speak of in the most crucial areas: jobs, inflation, and a bloated federal government. Instead, it seems the federal government is trying to completely take over all the states and absorb their power.
As if a slowing global economy along with slow domestic growth wasn’t bad enough, news breaks of $1 trillion in student loan debt on the books in the country (much of it co-signed for by parents). Remember when Obama “nationalized” the student loan debt program? No more local banks would be on the hook for those iffy loans: they could put them on “his” (yours, our children’s) back.
Don’t forget that the current student-loan interest rate of 3.4 percent will jump to 6.87 percent on July 1, 2013—in other words, doubling! It is estimated now that the federal government makes thirty-six cents on every dollar it loans to students. Its estimated earnings for 2012 were $34 billion! Why is the executive branch making money off the citizens it will need to be the future leaders of this country? Instead, our government chooses to saddle an entire generation with a $1 trillion-dollar debt, creating yet another bubble getting ready to burst.
Add cutting Social Security, and the scenario gets worse. (And by the way, Social Security is NOT an entitlement program—we have all paid in over our working lives, making it a return of principal, not a handout.) Now Obama is not only putting Social Security, Medicare, and Medicaid on the negotiating table, but his plans call for a reduction in the already paltry monthly stipends that seniors are being forced to try to subsist on. (And don’t forget that many of these upcoming seniors have co-signed those burgeoning student loans as well.) When the cost-of-living allowances are calculated by the government, the price of food and energy (gasoline, natural gas, etc.) are not used to determine how much more everything costs this year. (And do not think anyone in power notices the smaller sizes of all the packaging despite the rising prices!
We are now seeing cities going bankrupt (and taking their municipal bonds with them); how much longer before states go belly up? Stockton, California was recently given the go-ahead by a federal judge for the bankruptcy of the most populous city to proceed. Its largest debt is $900 million, owed to the California Public Employee Retirement System. It has managed to keep current on that debt by not paying other debt holders. Many municipal bond holders are very concerned that the GM debacle will play out again here in the Stockton bankruptcy. By law, bond holders have a first lien at bankruptcy; that is the way the contract for the bonds are written, yet with GM, the bond holders were kicked to the curb and the unions took their place along with the money that was rightfully and legally theirs. The rule of law had been breached.
Speaking of the rule of law, there used to be a need for due process before seizure of private property. Those were the good ol’ days: probable cause for a judge’s signature on search warrants, freedom to travel unmolested, knowing that the federal government did not have the power to “clawback” and take one’s deposits without asking or due process… I could go on and on, but I would rather not.
The steady rise of the BRICS nations (Brazil, Russia, India, China, and South Africa) is an even more significant game-changer. The scale of the impact of the BRICS on the global economy is still not fully appreciated. China’s GDP is now about half of that of the U.S. (although in terms of purchasing power parity, it may already exceed that of the U.S.), while the combined GDP of the BRICS is forecast to equal that of the G7 countries by the mid-2020s at the latest. These countries have been trading with each other in their own currencies for several years and do not want to be forced to turn their currency into U.S. dollars prior to transactions. The BRICS have decided to open a global international bank that will rival the IMF and the World Bank. By combining the remarkable resiliency and can-do attitude of emerging markets and the experience of Russia and China, this new currency has a better-than-even chance of making it and an even better chance of pulling off the bank coup they are looking for somewhere down the line.
Don’t be fooled by what you hear in the news: just because the stocks are rising doesn’t mean the economy is recovering. Perhaps the best analysis comes from Marc Faber, one of the pre-imminent forecasters, traders, and analysts of the last two decades. He gives his sage advice in a no-holds-barred way, as he is not here to convince anyone; he is here to speak to those who are already convinced, committed, and have a system in place to take care of themselves and their families when things hit rock bottom again. One subject Faber emphasizes is his disapproval of fiat currency, adding, “President Herbert Hoover felt similarly. Hoover said [unbacked] paper currency helps politicians by making it possible for government to take ‘the savings of the people by manipulation of inflation and deflation. We have gold,’ Hoover said, ‘because we cannot trust government.’”
The bottom line? Be ready to protect yourself and your family, and make sure you have a financial bug-out bag along with the rest of your preps. Only you know what you need, but be sure to be prepared.