QE2 or you get a 20% pay cut

[Shea]

Amid all the Republicans patting themselves on the back and Obama saying it wasn't a repudiation of his policies, the Federal Reserve today began to implement "Quantitative Easing 2"....aka debt monitization. This wonderful slight of hand basically is them printing money out of thin air and then buying T-Bills since there is no longer a market for them (no one wants to buy worthless paper, even the Chinese). Ostensibly this is to "prime the market with liquidity", which in normal human-speak is "pump worthless money into the system in the 'hopes' that it will cause you to spend more". Any first-year economic student (maybe even Canuck) can tell you more money chasing the same amount of goods will cause an increase in prices (that's inflation kids).

So thanks to the brain trust at the Fed, everyone who has a job and doesn't get a cost of living increase every year (pretty much everyone) will have the net effect of getting a 20% pay decrease (you get paid the same but it's actually worth less).

http://news.sky.com/skynews/Home/Bus...01011115792652

The Dow will go up and the politicians will sing, but it will only go up because there is more money, not because any actual values have risen. Meanwhile you and I will pay more for food (Milk is already up 18% this year, wheat futures are up 48.5%) and gas since a bbl of oil is pegged to the dollar. I hear ammo is a pretty good investment at this time...

[mtnairlover]

lol...wow...seems to me that it continues to be big business in the driver's seat. Aren't we tired of being dragged by the tow chain, yet?

Hey Shea, what do you think of this guy's ideas? You kinda have to read the whole article to get what he's saying, but I am not an economist, so I'm not sure if that would be any better.

[Shea]

lol...wow...seems to me that it continues to be big business in the driver's seat. Aren't we tired of being dragged by the tow chain, yet?

Hey Shea, what do you think of this guy's ideas? You kinda have to read the whole article to get what he's saying, but I am not an economist, so I'm not sure if that would be any better.

Tax cuts (which I am all in favor of) without a cut in spending (which I am very much in favor of) is just plain stupid. We HAVE to balance our budget, which unfortunately will be painful to a great many people. Spending money we don't have just exacerbates our problems. Bush cutting taxes, then adding an completely unneeded entitlement program (Medicare Part D) and THEN launching two very questionable military campaigns was the epitome of idiocy. Obama had just continued the process of destruction, just with a bigger deficit.

Reducing FICA taxes as a means to spur the economy, which is what the link suggested, is the worst idea. The ponzi scheme that is Social Security is already paying out more in benefits then it takes in:

http://www.nytimes.com/2010/03/25/bu.../25social.html

Reducing the contributions will only hasten it's demise, despite all our politicians proclaiming that it doesn't need to be fixed. Only drastic cost cutting will prevent us from going over the cliff. The alternative, according to the Fed, is to inflate the money supply so much that our 14 trillion dollar debt is actually only $.50. Personally I don't want to carry $5 million to buy a loaf of bread.

[jbnwc]

The ponzi scheme that is Social Security is already paying out more in benefits then it takes in:

http://www.nytimes.com/2010/03/25/bu.../25social.html

Reducing the contributions will only hasten it's demise, despite all our politicians proclaiming that it doesn't need to be fixed.

Our new senator, Ken Buck, is ALL about fixing the SS ponzi. Oh wait. Crap.

[Bueller]

Cutting spending will lead to tough decisions, where oh where to start?

http://en.m.wikipedia.org/wiki/List_...y_expenditures

[Sarge]

Cutting spending will lead to tough decisions, where oh where to start?

http://en.m.wikipedia.org/wiki/List_...y_expenditures

As much as I'm for that, I'm just afraid of #2 on that list.

[derekm]

???

[The Black Knight]

SUCKS!!
Attachment 15982

[Canuck]

Why did I get thrown into this Shea? I agree with most of your first post. The SS is were we part ways.

[Shea]

Why did I get thrown into this Shea? I agree with most of your first post. The SS is were we part ways.

Because you're a self-professed socialist, and I hate you

Just poking you with a stick. Which part of the SS part did you disagree with? That its a ponzi scheme? Sorry brother but from SEC's own website:

"A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investor."

It takes three working people to fund the benefits of one retiree. Sounds pretty much like the very definition, does it not?

[Canuck]

I'm putting my money in Plastics. It's the future.

[MetaLord 9]

I'm putting my money in Plastics.

Meanwhile, Blanket's busy taking money OFF your plastic!

[Devaclis]

Mass composting of excess humans with an IQ under 120. Turn the compost into feed for the animals that the smart people will eat.

[Shea]

Mass composting of excess humans with an IQ under 120. Turn the compost into feed for the animals that the smart people will eat.

I am intrigued by your comments and wish to subscribe to your newsletter...

[mtnairlover]

People are afraid to lose out on their SS benefits...it's their fall back. Thing is a lot of people rely on that and only that.

Here's one thing I've learned after working in the public sector...PERA is a lot more friendly and it's a whole lot more comfy retiring with PERA benefits. The money came out of my paycheck before taxes. I did not pay into SS, only PERA. Had I stayed in the public sector, after working for 30 years in that sector, the way PERA worked was it took your earnings for the last 3 years of your service and averaged it, then you get paid 75% of that average for the rest of your life. That's amazing to me, especially since at that time of a person's life, the mortgage is paid and so living is a whole lot easier. At least, that's what I saw when I spoke with others who had retired and were living quite happily.

Anyway, people on the outside (not in the public sector) don't like PERA, cuz they see folks retiring early and living well. In my opinion, it's more a jealousy factor (stay with me, I'm getting to some kind of conclusion)...but the bigger issue is because everyone else realizes they more than likely will not have SS when they retire...so they're stuck and freaking out.

So, what if there was some other "scheme" to take pre-tax money of everyone's paycheck, invest it, and when a person is ready for retirement, there it is? I'm saying across the board...not something separate for public employees, but something that is the same percentage no matter where you work?

Is this idea hard to do? Is it because everyone is freaked out that pre-tax dollars are going somewhere like a black hole? Am I way off base?

Oh and yeah...no doubt we will have to cut spending, but it's the what kind that is hard to come to a consensus about. Those graphs in Wikipedia are freakin scary.

[Canuck]

My work schedule is busy today, so I'm not going to get into anoter 3 page (+) debate on the success and failures of SS. But what is your solution. Give it to the Bankster scumbags on Wall St?

[Shea]

My work schedule is busy today, so I'm not going to get into anoter 3 page (+) debate on the success and failures of SS. But what is your solution. Give it to the Bankster scumbags on Wall St?

Canada's system, as you've described it, sounds workable. The problem is no one has the stones to get into it since it's the "third rail" of politics. The only options apparently available to us are 1) raise the retirement age, 2) means test the benefits 3) cut benefits or 4) raise the tax. None of those are particularly palatable and doing any of them would lead to a firestorm of hate from whoever is in the opposition and the AARP. Doing nothing is not acceptable.

I would prefer "ownership" of an individuals retirement. If you've put money aside your entire adult life, it should be yours. As it stands now, you pay into the system for 40+ years and if you die on your 64th birthday the government takes it all.

In the grand scheme of things, defined benefits (you get X every month, no matter how much you've put in) as opposed to defined contribution plans (you put in X amount and you get Y amount based on that) are a problem and will be the doom of the massive amount of underwater pension plans in the US. These mismanaged union plans that have been underfunded for years are going to be bailed out by us taxpayers at some point in the very near future.

[dirkterrell]

I would prefer "ownership" of an individuals retirement.

PRIVATIZATION?!?!?!?!?!? You fucking selfish bastard! How dare you expect people to be responsible for themselves. Hell no! That would be an unmitigated disaster. We need big daddy to take care of everybody.



Dirk

[Shea]

The problem Canuck is that ALL that "money" that the SSA says is in the the "trust fund" doesn't actually exist. In order to cook the books, our illustrious government took the cash from that fund and replaced it with special treasury notes (aka IOUs). In 2000, Bill Clinton's OMB stated:

"These [Trust Fund] balances are available to finance future benefit payments and other trust fund expenditures-but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, make it easier for the government to pay benefits. "

Social Security liabilities are PURPOSEFULLY kept OFF the government balance sheets because they would freak people out. The system is definitely in trouble with fictitious bookkeeping that makes Enron look tame.

[Canuck]

In the grand scheme of things, defined benefits (you get X every month, no matter how much you've put in) as opposed to defined contribution plans (you put in X amount and you get Y amount based on that) are a problem and will be the doom of the massive amount of underwater pension plans in the US. These mismanaged union plans that have been underfunded for years are going to be bailed out by us taxpayers at some point in the very near future.

Mismanaged is a vague generalization. I'll give you an empirical example. My Union pension is now at "endangered" stage. Meaning that we are between 70-85% solvent. Our pension took a dive when the stock market took a massive shit in '08. The real-estate scandal and all of these CDS (credit default swaps) were/are tied into the stock and bonds that alot of pension plans and private investors bought into. Most of what is at fault are the Banksters and the 100 or so uber rich in this country that really control things.
Viva la resistànce!

[dirkterrell]

Mismanaged is a vague generalization. I'll give you an empirical example. My Union pension is now at "endangered" stage. Meaning that we are between 70-85% solvent. Our pension took a dive when the stock market took a massive shit in '08.

Then it was mismanaged. Clearly it was too heavily invested in equities for the payouts it had to make.

And yes, the banksters have pulled off some massive fraud, especially on the MBS stuff. They're trying to get out of paying for the mess they've created and the politicians are playing right along. But bullshit can't overcome the mathematical realities in play forever, and the more of this quantitative easing crap they foist on us, the more disastrous the final collapse will be.

Dirk

[Shea]

Mismanaged is a vague generalization. I'll give you an empirical example. My Union pension is now at "endangered" stage. Meaning that we are between 70-85% solvent. Our pension took a dive when the stock market took a massive shit in '08. The real-estate scandal and all of these CDS (credit default swaps) were/are tied into the stock and bonds that alot of pension plans and private investors bought into. Most of what is at fault are the Banksters and the 100 or so uber rich in this country that really control things.
Viva la resistànce!

I know you have a special love for unions, but for a group of people (powerful elite themselves) that put more emphasis in promoting their political agenda rather then funding their own members pension plans...and then to use their bought politicians to shift that burden onto American taxpayers. I've got a problem with it.


So we are on the hook for $500+ Billion, and that is just for publicly traded companies, state union pensions underwater add billions more.

http://www.washingtonexaminer.com/op...-95056214.html

[Ghost]

Viva la resistànce!

The Resistance that "resists" by posting diatribes on obscure forums with no intention/ability to actually effect change?

La résistance est morte mon ami.*

*(though the idea still manages to sell a lot of Che shirts to college kids who think it'll get them laid)

[Canuck]

The Resistance that "resists" by posting diatribes on obscure forums with no intention/ability to actually effect change?

La résistance est morte mon ami.*

*(though the idea still manages to sell a lot of Che shirts to college kids who think it'll get them laid)

touché.
Thanks for the acute accent correction on the first 'e'. I'm an Anglophone Canandian. No Québécois for me. But I'm trying.