The Unrelenting March To The Government Debt Bomb Implosion, Part 2

Over the past couple of weeks we have done three posts that show how quickly the country is going over the edge as it pertains to fiscal insolvency, given that the American political class has racked up about $109 TRILLION in debt that will have to be faced at some time soon:

• Current Federal government national debt - well over $21 TRILLION.
• Current unfunded Federal government liabilities from Medicare and Social Security - $82 TRILLION.
• Current unfunded liabilities of state governments - $6 TRILLION.

Those three posts and the dire news they portray can be accessed at:

https://loathemygovernment.blogspot.com/2018/11/the-unrelenting-march-to-government.html

https://loathemygovernment.blogspot.com/2017/04/dont-worry-be-happy-bursting-of.html

https://loathemygovernment.blogspot.com/2018/10/dont-worry-be-happy-any-short-term.html

Failure to address these debt mountains by American politicians will make the debt implosion worse and more devastating the longer the problem festers. And given that no politician even mentioned the debt issue in the just completed midterm elections means that they are unlikely to fix the problem anytime soon.

To the dire numbers listed above, let’s list out a few more facts that should scare you even more: but which hopefully give you a little perspective on how large the problem is:

• In fiscal year 2018, the Federal government collected $3.422 TRILLION in tax revenue, the most tax revenue the government has EVER collected.
• In fiscal 2018, the Federal government is expected to have paid out $952.5 billion just in Social Security benefits.
• Thus, almost 28% of the Federal government’s tax revenue is sent right back out in Social Security benefits.
• Given that about 10,000 Baby Boomers retire every day, the total number of dollars and percentage of Federal tax revenues paid out in Social Security benefits is going to go up dramatically in coming years.
• While the Federal government paid out $952.5 billion in Social Security benefits, it only collected about $917 billion in Social Security taxes, putting it in a negative cash flow situation worth about $36 billion, a tidy sum of money that the Federal government had to close with general Treasury Department revenues.
• This $36 billion will get larger and larger every year as more people retire and there are fewer and fewer workers paying Social Security taxes, adding to the $21 trillion national debt. 
• In fiscal 2018, the Federal government programs Social Security, Medicare and Medicaid will suck up $2.7 TRILLION of the Federal government budget, about 64% of total spending and about 79% of the Federal government’s tax revenue.
• 50 years ago these three programs accounted for only 25% of the Federal budget, which means that this piece of the Federal government budget has grown two and half times in those years.

As you can see, trimming Federal spending around the edges (or even eliminating whole government departments) will have no real impact on this $109 TRILLION debt crisis. Taxing the rich more will have no real impact on this $109 TRILLION crisis. Blaming each other will have no real impact on this $109 TRILLION crisis. And most importantly, thinking that the American political class will take this $109 TRILLION seriously is a fool’s hope.

We have allowed the political class to get us into this situation. Thus, it is up to us to force these clowns in Washington and state capitals to face reality and come up with a coherent plan that fixes the crisis. The longer we wait, the more we let skate by on the hard decisions, the more painful the final outcome will be.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Februrary, 2017, Part 3, Political Class Insanity: The Wall Is (Relatively) Cheap, Bait and Switch In Illinois, and The Economic Plight of Millennials

It has been several weeks since Donald Trump has been sworn in which means at some point in the future we may run out of material to talk about. With the demise of the Obama administration, eight years worth of wasteful and excessive spending for nothing in return, foreign affairs blunders, Obama Care disasters, and assorted other administration and government blunders and screwups might end with the onset of a new administration. Trump may usher in a new paradigm of government actions that are limited, effective, cost efficient, and protective of the Constitution. If so, then this blog would run out of material to discuss and would have to be shut down.

But I doubt it. Even if Trump is truly a different type of President, he is still fighting over 500 embedded and entrenched politicians in Congress and thousands and thousands of government bureaucrats who will not go peacefully into the night for the good of the country. I wish him well and hopefully he can fix at least some of the myriad of problems the American political class creates everyday but until then, enjoy the latest political class insanity from Washington and beyond:

1) There has been a lot of discussion recently on Trump’s plan to build a wall along the Mexican border to staunch the flow illegal immigrants, illegal drugs, human trafficking, and possible terrorist infiltration. Many people, mostly liberals, are going nuts over this concept, often using the excuse that it is a waste of money. And “the wall” will not be cheap, with Senate Majority Leader Mitch McConnell estimating a cost of between $12-15 billion House Speaker Paul Ryan putting the price tag at between $8-14 billion.

They certainly have a right to their opinions but if they find the cost of the wall excessive without having at least the same outrage with the following Federal government projects, then please do not bother to argue your cost viewpoint with me without any outrage to the following insanity, as outlined by Jeff Poor on January 27, 2017 for the Breitbart website:

- The American taxpayer has paid $22 TRILLION, according to an analysis done by Robert Rector of the Heritage Foundation, since the War On Poverty began in the 1960s under the Johnson administration. Fifty years ago the U.S. poverty rate was about 14%. Twenty two trillion dollars later, the U.S.Census Bureau puts the most recent poverty rate calculation at….14.3%.

That $22 trillion could have built over 1,400 border walls and at least we would have something to show for it. Right now, we have nothing to show for the $22 trillion, 50 year effort called the War On Poverty.

- The F-35 Stealth Fighter Jet Project has been going on for decades. Total research, development, and construction costs, as we have reported before, are likely over a trillion dollars already. Reuters reports that the cost now to build out the fighter jet program will possibly another $379 billion. The plane has been a colossal failure since day one, plagued with massive cost overruns, schedule delays, and malfunctioning operations. Just that $379 billion could have build about 125 border walls.

- The Federal government has a mind numbing budget annual budget of about $3.8 trillion. At that rate, it is spending about $7.2 million a MINUTE, another mind boggling, obscene number. This comes out to about $10.4 billion a DAY. Thus, building a wall at say $15 billion consists of about one and a half days of Federal government spending, less than .3% of the annual Federal budget.

- A 2015 Government Accountability Office (GAO) report found that in 2014 the Federal government made $59.9 billion in improper/criminal Medicare payments and $17.5 billion in improper/criminal Medicaid payments, a grand total of $76.4 billion in one year in just these two government programs. This is equivalent to about five border walls. And the assumption is that the border wall would be basically a one time cost with smaller annual maintenance requirements while the Medicare and Medicaid almost $80 billion is an annual, recurring waste of money.

And by the way, if you include all 122 Federal programs like the GAO analysis did, you will find that in 2014 the Federal government made $124.7 billion in improper and criminal payouts, up from $105.8 billion the year before. In other words, under Obama, the inefficiencies and ineffectiveness of the Federal government and the money it wastes was growing steadily year over year.

- The Federal government now spends about $1.7 billion a year to maintain vacant and unused Federal buildings around the country. Not only is there an annual recurring cost just to keep these unused buildings from falling apart from neglect and decay, tens of billions of dollars have probably been already spent on them to obtain the land and buildings that now lay unused, more than enough money to build multiple walls.

- The Littoral Combat Ship program was costly to research and incurred higher than expected costs to build, with total costs estimates now around $29 billion, about twice the cost of the wall. And there is serious concern in the military and in Congress if these ships are even worth building and having with one Senator, John McCain saying that we may need to stop building and paying for thee ships that are not combat worthy or needed...after $29 billion has been spent.

- And last but not least is the Earned Income Tax Credit Program, an IRS program that paid out $69 billion to 28 million taxpayers in 2015. But according to the Treasury Inspector General for Tax Administration, “The IRS estimates that 23.8 percent ($15.6 billion) of EITC payments were issued improperly in Fiscal Year 2015.” In other words, cleaning up just one year’s screw ups in the Earned Income Tax Credit program could pay for the one time costs of the wall.

Look, I am not saying the wall is a good idea or not. But if you are trying to condemn the wall because it costs too much, please consider focusing your anger at far worst wastes of Federal government money vs. an effort that does not show up in the rounding error of the Federal government over the years.

2) While the Federal government seems to have no problem spending and wasting incredible amounts of taxpayer money, the state of Illinois has the opposite problem: they are so financially strapped that while they continue to sell state lottery tickets to Illinois residents, they no longer pay off on winning lottery tickets that involve more than trivial amounts. 

Phil Velasquez, recently writing for the Chicago Tribune, reported that two Illinois lottery winners have had to file a Federal lawsuit against the state in order to collect their winnings. Rhonda Rasche, who's awaiting a $50,000 payout, and Danny Chasteen, who won $250,000, are the litigants who are seeking class-action status and the halt of lottery ticket sales. Since the state government never passed a budget, the state comptroller claims there is no legal authority to pay off winnings of over $25,000 until maybe some time in the future.

Ms. Rasche raises a very good point on the idiocy and unfairness of this bait and switch effort: "How the heck can they do this, and they're still selling tickets? If I was the one selling raffle tickets and I didn't pay, I would be sued or in jail or both." Her lawyer, Thomas Zimmerman, Jr. also makes some common sense points: "The lottery represents that you can win instantly. They fail to tell you as of July 1 they're not going to pay. But yet they continue to sell the tickets under those false pretenses."

According to the article, “The lawsuit names lottery Director B.R. Lane, the Illinois Lottery Control Board and Northstar Lottery Group as defendants. It seeks to force the lottery to pay winners of more than $25,000 with 5 percent interest and asks that the lottery be barred from paying its administrative or operational costs until the winners receive their prizes. The lawsuit alleges that dozens await more than $288 million in prizes.”

Reminds of the old saying: Government is just like the Mafia except the Mafia is profitable. Here we have the government shaking down lottery players with no ability to pay off the winners, classic bait and switch, classic political class insanity.

3) We have often reported on how Obama and the Washington political class have done a horrible job at supporting and creating robust economic growth. Despite spending over $800 billion on a (failed) economic stimulus program, enjoying record low energy costs, and enjoying trillions of fake dollars the Federal Reserve pumped into the economy, Obama could not leverage these tailwinds into anything better than these anemic economic results:

• Annual economic growth never got close to the long term trend of about 3% a year.
• Wages were more or less stagnant until the past six months or so during the entire length of the “Obama recovery.”
• Job creation could not even keep up with adult population growth.
• As a result, the labor participation rate is at 40 year lows, it has not been this low since the horrible stagflation days of the Carter administration.
• Over 94 million adult Americans are out of the workforce.
• More Americans over 65 years old are still in the workforce and the highest proportion of young American adults are still living at home since the Great Depression.
• Jobs that were created during the Obama recovery tended to be part time, contract work, and in low paying economic sectors such as food services.

And now we can add the death of the American dream for today’s millennials to the above list of failures:

• According to a Federal Reserve analysis, the median income of today’s millennials, $40,581, a full 20% lower than what Baby Boomers were earning at the same time in their lives, taking inflation into account.
• Millennials have half the net worth, a lower home ownership rate, and drastically higher student debt vs. Baby Boomers at the same age.
• College educated millennials have it a little better than the overall millennials average but they are barely doing better than high school educated Baby Boomers, indicating that a college education is less valuable than it was for Baby Boomers.
• A recent study out of Stanford University found that Baby Boomers born in 1950 had a 79% chance of making more money than their parents while those born in 1980 had only a 50% chance of making more money than their parents.

Thus, Obama and the rest of the Washington political class have been able to create economic conditions where younger Americans, despite being much more educated, have higher student debt, have less of a chance of making more than their parents, and are earning far less than the Baby Boomer generation. Nice job Washington.

That will do it for today’s insanity: economic mismanagement, government bait and switch in Illinois, and wasteful government spending that dwarf the cost of a border wall. More insanity tomorrow.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

January, 2017, Part 6, Polticial Class Insanity: MIllennials Depressed, Congress Wasting Time, and More Minimum Wage Nonsense

It is the beginning of another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us. 

Today and for all of the insanity posts this month, let’s start off with a welcome piece of honest political dialog. It comes from a State Department spokesperson. Mark Toner, who is about to start the daily State Department press briefing. In a joking matter, he makes the following quote: "Welcome to the State Department. I think we have some interns in the back. Welcome. Good to see you in this exercise in transparency and democracy." 

He then burst out laughing at his own quote, indicating he also knew what a joke the Obama administration has been, especially Mr. Toner’s State Department, when it comes to cover ups, lack of transparency, denial of Freedom of Information Act requests, the prosecution of whistleblowers, etc. But at least it was a little refreshing to finally hear some actual honesty out of Washington as we see from the actual clip of the news conference:

http://www.againstcronycapitalism.org/2016/08/when-even-the-state-department-spokesperson-cant-keep-a-straight-face-about-things-anymore-video/

With that context of honesty, let’s see what other insanity has been going down:

1)  If millennials are the future of the country, then the country is in a for a rough time. According to an annual opinion survey that was done by Country Financial Group last November:

• Its annual financial security index found that millennials, those aged 18 to 34, had the lowest score of all age groups, 60.9 out of 100, regarding their financial optimism.
• This score was even lower than the millennials pessimistic responses to the 2016 survey, making them the only age group to score lower on their 2017 expectations.
• Gen X respondents had an index score of 66.6, Baby Boomers came in at 69.2, and those age over 65 had the highest optimism for the country’s financial state at 71.2.
• Furthermore, about one out of three millennials do not think they will ever have enough money to retire comfortably, about half of them have not set any money aside in either bank accounts or investment accounts, and 29% felt unsure that they would be able to pay off their debts.

Given that Obama’s economic policies have restricted national economic growth, that most of the Obama recovery jobs have been part time or short term contract opportunities, that a record number of millennials are still living at home or with relatives, and wage and income growth has been mostly stagnant over the past eight years, it should not be a surprise that those just starting out on their own economic journeys are not optimistic on the financial future of the country or themselves. Horrific economic management by Washington in general and Obama in particular.

2) My father’s side of the family did not arrive in this country until 1914, almost fifty years after the Civil War and slavery ended in this country. My mother’s side of the family did not arrive in this country until 1920, about 55 years after the end of the Civil War and slavery. Thus, no ancestor on either side of my family had anything to do with slavery. And I would bet that there are millions of similar stories and families like mine across the country.

But that reality did not prevent the Congressional Black Caucus from again issuing a demand that white people like myself pay so-called reparations to African-Americans TODAY, none of whom were alive during the Civil War and the slavery era. According to the Washington Examiner: “Specifically, Michigan Rep. John Conyers and his fellow CBC members have “re-introduced legislation that would set up a commission to consider whether reparations should be paid to black Americans for slavery.” 

Such insanity, such stupidity, for the following reasons:

• As we mentioned above, all white people, and black people, who took advantage of slavery, died long, long ago and many of the current non-black citizens of this country have ancestors who arrived in this country long after slavery ended.
• No African-American living today was ever a slave in the old South and thus, none of them suffered the ills of slavery.
• Using this argument by the Congressional Black Caucus, reparations should be paid to the families of the 600,000 or so mostly white soldiers who fought and died to end slavery in this country, a reality that the Caucus never seems to grasp or champion.
• According to the article, “Moreover, according to The Root magazine, known for its usually unapologetically pro-black stance on the issues, even some free black Americans “bought and sold other black people, and did so at least since 1654, continuing to do so right through the Civil War.”
• And finally, “even one of the most leftist papers in existence, The New York Times, admitted two years ago that were a reparations bill passed into law, payments would “have to come from taxpayers, who have no culpability for those past crimes and little, if any, of the benefit.”

Rather than working on real problems facing African Americans today, e.g. higher than average African-American unemployment rates, failing inner city schools, urban violence in cities like Chicago, etc., these politicians keep introducing a bill that is stupid and has no chance of ever passing. Einstein once said that the definition of insanity is doing the same thing over and over and expecting different results and this reparations non-issue fits that definition to perfection.

3) Given the sad state of the economy in many parts of the country and the historically weak economic recovery orchestrated by the Obama administration, it is pretty obvious, as we have pointed out many times, that the American political class does a pretty lousy job when it comes to economic policy and strategies. This inability was recently illustrated again by a Young Conservative website article by Andrew Miller on January 4, 2017. Mr. Miller reviewed how the political class in California had passed legislation to jack up the minimum wage in that state to $10.50 an hour with the intention to get it to $15 an hour by 2021. 

In their minds this will provide a better life for California workers since they would be taking home more money. But the fault in their logic is that this assumes that businesses that employ these California workers can actually afford to pay higher wages. What if they cannot? This reality never seems to enter politicians’ minds when they start messing with economic realities.

However, the article illustrated one of these realities. Houman Salem is the founder and owner of a small fashion design and clothing manufacturer in San Fernando, California. While most of the clothing industry has sent their manufacturing offshore to cheap labor countries overseas, Mr. Salem should be congratulated for keeping Americans workers employed in California in the manufacturing segment of the economy. 

But that noble effort was recently endangered by the new minimum wage increase drive by California politicians, as witnessed by an article Mr. Salem had published in the LA Times:

After two years in business, my company now has more than 150 clients from all over the world and 18 employees. It’s what’s known as a cut-and-sew house, part of the garment industry that generates about $17 billion in annual economic activity in Los Angeles County, including $6.9 billion in payroll, according to a 2016 industry report by the California Fashion Assn. This is the epicenter of apparel design and manufacturing in the United States; domestically manufactured clothing is more expensive, but retail and wholesale customers who care about quality and working conditions have historically been willing to pay for it.

Unfortunately, the industry is on a downward trend. Los Angeles County used to have more than 5,000 apparel factories; today, my company is one of roughly 2,000 — and many (e.g. American Apparel) are looking for a way out. One Los Angeles Times headline, quoting a California State University economist, warned that “the exodus has begun.”

So what did Mr. Salem do from a good business perspective? He has moved his operation out of California to Nevada which has a lower minimum wage than California in order to keep his business financially viable. Thus, bad economic policy by bad politicians had the following negative effects:

• While California residents now have the advantage of a higher minimum wage, they have a disadvantage of not having a job or wage at all as California businesses like Mr. Salem’s move to where they can stay financially viable as a business.
• Remaining California businesses lose the economic benefit of customer actually having a job, if at a lower salary, further depressing the local economy.
• State and local government lose the tax inflows that these now unemployed citizens would have provided if the minimum wage had not been raised.

All of these California losses are now Nevada’s gain in Mr. Salem’s case, thanks to the continued economic ignorance of America’s politicians.

That will do it for today’s insanity: more economic ignorance from politicians, Congressional members focusing on an inane and stupid priority at the cost of other worthy efforts, and young Americans looking at the future pessimistically. More insanity tomorrow.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

February, 2016, Part 5, Political Class Insanity: A Greedy Politician, Needy Millenialls, and Obama's Lies In One Place

It is the beginning of another month which means it is time again to review the latest political class insanity from the American political class. Each month it takes us multiple posts to cover the wasteful spending, incompetent government organizations and employees, government programs that usually make a problem worse than resolving it, inane and idiotic politician comments, etc.

To review past posts on this insanity and idiocy, just click on the first few posts in each month listed to the right of this page. After reviewing just a handful of these insanity posts we think you will agree that we are currently being served by the worst set of American politicians ever to hold office in our entire history.

So let’s get started with the latest insanity:

1) The following discussion is not new insanity as much as a review of the insanity of lies from the first seven years of the Obama administration. We have reviewed just about every of the following lies listed under the Obama administration but it is nice and convenient to see most of the lies, deceptions, and failures in one list.  
For a look at the most recent writings we did on the failures of this Presidency, go to:

http://loathemygovernment.blogspot.com/2015/12/the-obama-era-part-1-memories-from.html

Starting on that day and the subsequent days to that post, you will find a total compilation of the lies, failures, embarrassments, and law breaking of the Obama administration. Today, we provide a short summary of those Presidential disasters in the context of other Presidential lies from other Presidents, most of which come from to us courtesy of Point News with some additions by myself:

Famous Presidential Lies Contest

Written by To The Point News

LBJ: None of our boys will die on foreign soil.

Nixon: I am not a crook.

GHW Bush: Read my lips - No New Taxes.

Clinton: I did not have sex with that woman... Miss Lewinski.

GW Bush: Iraq has weapons of mass destruction.

Obama:

1. I will have the most transparent administration in history.
2. The stimulus will fund shovel-ready jobs.
3. I am focused like a laser on creating jobs.
4. If my economic stimulus plan is enacted, unemployment will not exceed 8%.
5. The IRS is not targeting anyone.
6. Only those in the Cininnati office of the IRS were targeting.
7. Benghazi was a spontaneous riot about a video, not a pre-planned terrorist attack.
8. I will put an end to the type of politics that "breeds division, conflict and cynicism".
9. You didn't build that!
10. I will restore trust in Government.
11. The Cambridge cops acted stupidly.
12. The public will have 5 days to look at every bill that lands on my desk.
13. It's not my red line - it is the world's red line.
14. Whistle blowers will be protected in my administration.
15. We got back every dime we used to rescue the banks and auto companies, with interest.
16. I am not spying on American citizens.
17. Obama Care will be good for America.
18. The Obama Care negotiations will be broadcast on C-SPAN for the country to see.
19. You can keep your family doctor under Obama Care.
20. You can keep your current hospital under Obama Care.
21. Annual family health care insurance premiums will be lowered up to $2500 under Obama Care.
22. If you like it, you can keep your current healthcare plan under Obama Care.
23. Getting an Obama Care insurance policy will be as simple as shopping at Amazon.
24. I knew nothing about "Fast and Furious" gunrunning to Mexican drug cartels.
25. I knew nothing about IRS targeting conservative groups.
26. I knew nothing about what happened in Benghazi.
27. I have never known my uncle from Kenya who is in the country illegally and that was arrested and told to leave the country over 20 years ago.
28. And, I have never lived with that uncle. He finally admitted (12-05-2013) that he DID know his uncle and that he DID live with him.
29. If elected I promise not to renew the Patriot Act.
30. If elected I will end the war in Iraq and Afghanistan within the 1st 9 months of my term.
31. I will close Guantanamo within the first 6 months of my term.
32. I will bridge the gap between black and white and between America and other countries.
33. I will go through the Federal budget line by line to weed out wasteful spending.
34. If elected President, I will devote every waking moment to serving America and not take vacations or any leisure time for myself.
35. I will cut the Federal deficit in by the end of my first term.
36. I will follow the Constitution and not issue a lot of executive orders like my predecessor did.

And the biggest one of all:

"I, Barrack Hussein Obama, pledge to preserve, protect and defend the Constitution of the United States of America."

Was ever such insanely and useless bill of goods ever sold to the American public?

2) One of the truisms about America over the centuries was that, in general, every generation of Americans enjoyed a higher standard of living than their parents. The freedom and liberties enjoyed by Americans over time allowed them, the country and its economy to reach its full potential, increasing the economic lot and lifestyles of the majority of Americans. This was called the “American Dream” and for most people over time in this country, and the people from around the world that wanted to come here, it was the reality.

Unfortunately, Sam Rolley, writing for the Personal Liberty website on January 18, 2016, told us how “Broke Millennials Are Giving Up On The American Dream:”

• According to a New York Times report in 2015, the U.S. millennial population, those born between 1981 and 1997, will soon be the largest population sub-segment in the country, bypassing the Baby Boomer generation.
• But this new super segment of population will be far worse off economically than the Baby Boomer segment since according to a report from the Generation Opportunity organization, “2016 State of the Millennial Report,” high unemployment and underemployment coupled with high student loans will make the American Dream a myth for many of them.
• In fact, 48% of those surveyed currently claim that the American Dream is already dead for them.
• The millennial unemployment rate of 8% is more than twice the unemployment rate for workers aged 30 and older which stands at 3.7%.
• Already 1.8 million millennials have actually stopped looking for work out of frustration, putting their labor participation rate at 71%, lower than it has ever been for that age group.
• From the report: “For the young adults who have been able to find work, 40 percent are underemployed, either working part-time jobs, contract jobs, or one-time gigs. While Millennials have a strong desire to start businesses, only 3.6 percent of Americans under the age of 30 own or have a stake in a private businesses compared to 10.6 percent in 1989.”
• The number of Americans aged 18 to 29 who currently are earning less than $25,000 a year is higher than in the 1990s.
• The student loan burden in the face of low wages and high unemployment averages about $35,000 per person.
• In 1979, 8% of Baby Boomers were living in poverty while in 2013, years after the recession ended, the percentage of Millennials living in poverty was double that rate, 16%.
• These horrid economic conditions are causing societal changes with marriage, home ownership, and raising kids being delayed and delayed.

According to the Generation opportunity report, the best thing that governments and politicians can do to improve the lot of Millennials would be to do is to cut down on regulations and red tape which stifle the economy and entrepreneurial opportunities: “Young people are losing faith in the American Dream,” said David Barnes, policy director of Generation Opportunity. “It’s time for real reforms that allow us to unleash our potential and create a better society for ourselves and future generations. In order for that to happen, we need to stand up and let policy makers know that this is unacceptable.”

For well over two hundred years, the American Dream was alive and well and thriving. But now incompetence, economic ignorance, over regulation (especially during the Obama regime), ever increasing taxes, crony capitalism, and general ineptness and selfishness on behalf of our current crop of politicians is somehow doing the impossible: killing the American Dream and the futures of America’s next generation. Insanity.

3) During the destruction of the American Dream for Millennials, Harry Reid was not only a senior member of the Senate but was the Senate Majority leader for a long time. Thus, if anyone can be blamed for the policies and incompetence of the Federal government and the politicians that operate it and its policies, he has to be close to the head of the class.

But you have to give Harry credit. Despite being part of the problem, according to one Federal Election Commission (FEC) commissioner, Reid has asked the FEC to allow him to use a “slush fund” to help him retire. According to Joe Schaeffer writing for NewsMax on January 4, 2016, Reid has asked the FEC to create a special exemption just for him that would allow him to spend $600,000 of unspent camping and PAC funds on personal matters after he retires from the Senate at the end of his current term.

According to the Washington Examiner, FEC Commissioner Lee E. Goodman labeled the funds an "administrative slush fund" as the extraordinary request was made. Reid wants to use the so-called slush fund "to close out his offices and aid his shift to becoming a former public official still intent on influencing the nation's agenda." He also wants money to hire a personal assistant to "schedule and organize appearances in which Senator Reid will discuss his tenure in office." I am assuming that he would be paid for those appearances.

FEC Commissioner Goodman told the Washington Examiner that "This issue of personal use vexes us." In other words, what the heck is this nonsense? I would bet that most, if not all, of the people who contributed to Reid’s political campaigns never expected the excess to be used in a slush fund to further enrich Reid once he left office. 

Thus, even in retirement, American politicians continue to suck money out of their government service. As always, their priorities are their well being and self enrichment and not the health and liberties of the American they are supposed to serve.

Enough insanity for today. A typical greedy politician, needy millennials, and a comprehensive list of Obama lies all in one place. Another insanity review tomorrow.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

The Myth Of The Social Security Trust Fund Continues To Live On

Before going into details regarding the myth of the Social Security trust fund, let's review an Associated press article that appeared on April 27, 2012, "Social Security Approaching Insolvency Even Faster." The extensive article reviews the timing and detail behind the stated approaching insolvency of the Social Security trust fund:

• Social Security's Trust Fund is now expected to run dry in 2033, three years earlier than previously estimated.
• This earlier date is being driven by retiring Baby Boomers, a weak economy, higher energy prices that are suppressing wages, and politicians' inability and cowardice to take painful actions to fix both the Social Security retirement program and the Social Security disability program.
• The 2033 date is a weighted date of both the retirement program and the disability program, which disguises the fact that the disability program will actually run out of its trust funds by 2016, less than four years from now.
• If the retirement program runs out of its trust fund resources, Social Security would only be able to pay 75% of the benefits it promised to retirees.

Sounds like bad news all around. Three years closer to insolvency. Baby boomer impacts that will only get larger and more onerous. A disability fund that is less than four years away from burning through its trust fund.

But the news is much worse. There really is no trust fund. Although the article estimates that the trust funds contain $2.7 TRILLION, that $2.7 TRILLION is strictly an illusion. There is no pile of gold bars worth $2.7 TRILLION in the trust fund that could pay off Social Security's liabilities. There is no stack of Apple stock certificates that could be used to pay off this liabilities. Nothing.

All of the wealth that the Federal government, and the political class, has collected via Social Security taxes over the decades, has ended up being used in two ways, and two ways only. Some of taxes were used to pay Social Security benefits over the decades. All of the excess wealth, above the benefits paid, was spent and wasted by generations of our politicians on non-Social Security efforts and programs. The extra wealth never actually made it into the trust fund, it no longer exists.

In order to make it look like the Social Security trust fund was not being raided by politicians, the U.S. Treasury Department gave the Social Security administration an accounting IOU. These IOUs have no value at all since the politicians have already burned through the wealth that was collected in the form of Social Security taxes. In order for the Treasury Department to actually pay on those trust fund IOUs, it will have to issue more debt or collect more taxes to cover the debt.

Obviously, either option is not a good one. Issuing more debt will add to our almost $16 TRILLION national debt. Raising taxes will suppress economic growth, resulting in less wages and less Social Security taxes collected, further depressing Social Security's financial situation.  

How do we know there is nothing of value in the trust fund except some worthless IOUs given to one government agency by another government agency? The President said so back in August, 2011 when it looked like the Federal government might shut down unless the debt ceiling was raised. When asked if Social Security checks would still be paid out the President replied: ""I cannot guarantee that those [Social Security] checks go out on August 3rd if we haven't resolved this issue, because there may simply not be the money in the coffers to do it."

Not enough money in the coffers to do it. What about the $2.7 TRILLION in the trust fund, couldn't that money be used to fund the Social Security checks? No, because since 2010, Social Security has been in a negative cash flow situation, i.e. it pays out more money than it takes in. This requires it to go to the Treasury Department which makes up the shortfall by collecting more in taxes or issuing more debt.

There is no wealth left in the trust funds, we are already in 2033 and paying for the Social Security shortfall out of ordinary taxes. Now, there are some superfluous government accounting schemes being used to make it look like we are paying the negative cash flow out of the trust fund but that is merely a smoke screen. The real payments for the negative cash flow are being paid by the American taxpayer today, not in 2033.

However, by claiming there is this mythical, robust, and wealth filled trust fund, politicians can postpone the hard and difficult decisions for reforming Social Security for twenty years, allowing the problems with the program to get worse and worse. This is what our politicians do best, protect their own selfish political career and personal interests, delay making the courageous decisions, and allowing the country and its citizens and their wealth to suffer in the process.

We need to get beyond the myth and take at least five concrete steps to fix the situtation that is happening today, not twenty years from now, as outlined in "Love My Country, Loathe My Government:"

• Step 10 - Reduce the size of the Social Security tax rate but upcap the amount that is subject to the tax and expand the tax from only wages to all forms of income in order to make the the tax's imposition fairer across all income ranges (see the details in Step 10 for the detailed rationale.)
• Step 11 - Raise the retirement age to 70 with a hardship exception. When the Social Security system was implemented, very few Americans lived long enough to collect their benefits. Americans are living longer now so to keep the program solvent, the retirement age must rise.
• Step 12 - Deny benefits to anyone whose net worth is over $3 million. Better to preserve limited resources for Americans who really need the Social Security program even if people like Warren Buffet, Bill Gates, and Donald Trump go without their monthly Social Security checks.
• Government experts estimate that the Social Security system loses over $100 billion a year to waste and criminal fraud. If this abuse could be stopped, it could fund an additional 6.7 million retirees every year. Thus, an extensive and effective anti-fraud effort needs to take place NOW since the fraud is so widespread NOW.
• Many times in this blog we have proven that the Social Security program is one of the absolute worst ways to save for retirement. In addition to the short term steps listed immediately above, a long term component of any plan has to be to get the government and political class out of the retirement program business and set up private savings retirement accounts that would provide much better retirement lives for future American retirees. Please go to the following post to see how Chile made life so much better for their citizens when they got out of their version of "Social Security:"

http://loathemygovernment.blogspot.com/2012/02/united-states-of-purple-presidency-some.html


So let's review:

• The Social Security Trust Fund is a myth. It became a myth in the 1960s when Demcoratic President Lyndon Johnson pushed to get Social Security funds intermingled with General Tax funds, giving the political class access to more of our money and wealth at the cost of a secure financial future for American retirees.
• The Social Security system is in a negative cash flow situation today, not in 2033. The 2033 date is an accounting trick that our polticians use to create the illusion that the crisis is twenty years away, that there is no immediate crisis today.
• But the crisis is TODAY and the short fall and negative cash flow is eating up more of our wealth TODAY via taxation and adding to more of our onerous national debt TODAY.
• There are five steps that need to be taken to save the process in the short term and improve the process in the long term. Steps that our political class are likely to avoid altogher since implementing those steps would require leadership, courage, and selflessness, three qualities sorely lacking in Washington today.

Myths are only illusions. They are not solid, they do not make bad situations good. It you hear a politician telling you that Social Security is good and solid for at least another twenty years, remember that two possibilities are in play:

1. They truly understand the myth and are lying to you to avoid making the difficult decisions required or
2. They truly are ignorant of reality, making a solution from them highly unlikely.

The myth exists, the wealth to fulfill the promise of the myth does not exist, Lyndon and the rest of the political class spent that wealth long ago, possibly on GSA type conferences in Las Vegas.




We invite all readers of this blog to visit our new website, "The United States Of Purple," at:


http://www.unitedstatesofpurple.com/


The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/

The Scam And Con Job That Is Social Security

Social Security has been in the news a lot lately, given that it, along with Medicare, have the biggest chances of bankrupting the country's financial health. With tens of millions of Baby Boomers about to enter retirement and the associated programs of Social Security and Medicare, unless serious steps are taken soon to get both programs under control, the future of the United States and the freedoms it should afford us will be serious jeopardy.

The big question is whether or not the American political class has the brains and the backbone to step up, make the difficult and unpopular choices, and fix the situation. Early indications are that they are not, given what happened when the President's Deficit Reduction Commission proposed, after months and months of analysis, changes to the current Social Security parameters in order to save it from insolvency. Quicker than you can say politics, Nancy Pelosi jumped up and vowed there would not be any changes to Social Security but gave no indication, as is her typical mode of operation, on why there should not be any changes, proposed an alternative solution, or gave any indication she understood the underlying numbers.

If she did take a few minutes to understand what a scam and con job the Social Security program has degenerated into and how it is unsustainable as currently configured, she would not look so ignorant. Recent and not so recent reputable analyses show how bad this program actually is from a financial and freedom perspective, making you wonder why anyone would want to keep the program as is:

- A recent Associated Press investigative report highlighted the work of two economists, Eugene Steuerle and Stephanie Rennane from the Urban Institute think tank. Their research examined just how well the Social Security program performs financially and whether it is a good  investment vehicle for individual citizens. In the AP article reporting their results, the two economists looked at an average-wage, two earner American couple earning $89,000 a year. Upon retiring in 2011, they would have paid $614,000 into the Social Security program.

But according to the payout schedule and the Urban Institute analyses, this couple can expect, on average, to receive only $555,000 in Social Security benefits. Thus, this analysis shows that as an investment and retirement vehicle, the Social Security program yields a negative 10% return rate on investment. In other words, you would have been better off taking the money you earned, but confiscated by the government to sustain Social Security benefits for retired Americans, and put it under your mattress. If you had a broker getting negative 10% returns on your investment, you would fire them. Negative 10% return, confiscated wages, and this is the program that Nancy Pelosi does not want to change one bit.

Just like most other political class and government run programs, this one is a money loser and a freedom depriver. While this program may have made sense long ago when people did not live as long and the base of contributors to the program far outnumbered the ones receiving the benefit, that situation is long gone. People like Pelosi either do not want to recognize the changing reality or are not competent enough to understand it, but the program today is nothing more than a con job of those too young to retire.

- If you do not believe these two economists, consider an analysis I did on my own Social Security situation that looks at this financial fiasco from a long term, year-over-year investment perspective. I recently received my latest individual numbers from the Social Security Administration and updated my analysis spread sheet. The main assumptions and calculations in this spreadsheet include the following:

1) I calculated all of the  money, year-by-year, that my employers and myself had contributed into the Social Security pool.
2) I assumed that I would have been able to keep that money but had to invest it in a tax free IRA or 401k account immediately.
3) I then located the historical annual S&P stock market investment returns and assumed that I put all of the Social Security money into a low cost S&P stock fund.
4) I grew, or shrank, my pool of money every year based on the S&P rate of return.
5) Starting this year, I assumed that I would get more conservative with my investment strategy since I am approaching retirement (I am 57), a standard investment tactic.  Thus, I assumed that I could get a 4% return with this more conservative investment approach and that I would stay at this 4% conservative approach for the rest of my life.
6) Social Security tells me that age 62 I can start receiving monthly Social Security payments of $1,592. This becomes my bench mark.

How much better or worse would this approach have been vs. what Pelosi wants to keep unchanged? Consider the following spreadsheet results:

• Under the above assumptions, starting when I was 62 years old, I could take out twice as much than what Social Security will pay me and not run out of money until I was 88 years old. At that point, if I was still alive, I could live off of other investments and savings.
• Under the above assumptions, starting when I was 62 years old, I could take out 75% more than what Social Security will pay me and not run out of money until I was 95 years old. At that point, if I was still alive, I could live off of other investments and savings.
• Under the above assumptions, if I wanted to be conservative, I could take out 50% more than what Social Security will pay me and not run out of money until I was 100 years old, at which point I would still have a $267,000 in my account.

Thus, a different approach from the Urban Institute but the same result: I am far better off investing my own money using standard investment knowledge than letting the political class dictate and control my retirement money and life style.

Another positive aspect of this theoretical approach is that I would have had the wealth and money under my control. I would not be  subject to the whims and ignorance of the political class and subject to their control. Its called freedom and the con job of Social Security does rob us of some of our financial freedom.

- Don't believe the stock market is a sound way to save for retirement? I took a much more conservative approach to find out if and when Social Security ever becomes a better deal. Using the same model above, I changed my long term investment approach so that it was not invested in an S&P stock fund but it was invested in long term U.S. T-Bills. I went to a government website to locate the historical annual returns of long term T-Bills. This is theoretically a safer, more conservative investment approach. What did I find out:

• Under the above assumptions, I could take $1592 out of the account each month, the same amount as what Social Security will pay me, and at age 100, still have $50,000 in the account.
• Under the above assumptions, I could take out 20% more than the $1592, and enjoy a 20% better life style, and not run out of money until age 92, if I lived that long.

In either approach, I and probably tens of millions of other Baby Boomers would have been better off if the government had allowed us to take care of our own retirement. They did not and now we are in a quandary, with unwilling or unable leadership to solve a problem that might sink the nation. And unless major changes are made, this con job will continue for generations of Americans to come.

The first step in retiring this scam is to fix the current problems and "Love My Country, Loathe My Government" proposes three steps to clear up the situation:

• Raise the retirement age to 70 with a provision for less wealthy and less fortunate Americans to draw full Social Security payments prior to that age if they need it. In 1950, there were sixteen workers for every retired, Social Security eligible person in the country. By 2030, that ratio will be down to two to one. It is unfair to burden the next generation of younger Americans with this burden for older Americans that do not need Social Security before reaching the age of 70. (Source: Time magazine article, March 20, 1995.)
• Prohibit any American with assets, not income, of over $3 million to not draw any Social Security payments until their asset level is below $3 million. A $3 million asset base, invested to give off a modest 5% return a year, would generate annual income of $150,000 a year without depleting the principle. $150,000 would put that American in the upper 5% of earners in the country, anyone should be able to live comfortable on $150,000 in retirement. This action would make the system more solvent and create a higher chance that the truly needy Americans would still get Social Security support in the future.
• Reduce the Social Security tax rate but uncap the earnings cap so that all income, wages, interest, dividends, etc., are taxed at the lower rate. An American who makes about $100,000 a year pays about the same amount of Social Security tax of someone who makes $10 million a year. This second person makes one hundred  times as much in a year but pays the same amount of taxes. This inequity needs to be changed and made fairer.

Longer term, once the above three steps help stabilize and correct the short term disaster that the political class has created, the longer term strategy needs to be the dismemberment of the entire Social Security program and the return of Americans' wealth and freedom to those Americans. Never again should we allow the politicians in this country to hoist a con job on us like the current Social Security program, a scam that reduces our freedom, reduces the life styles we can and should be able to afford in retirement, and allows the political class to control the end of our lives.

It's called individual responsibility and politicians hate it when we control our own destiny. It deprives them of one less way to divide the country for their own political advancement, no matter what the cost to our pocketbooks.




Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.


Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.org