The final collapse of the US dollar it is just around the corner

Discussion in 'Economics' started by SouthAmerica, Mar 10, 2011.

  1. HELLO? Just WHO is EVER going to be able to PAY for all these PONZI schemes?

    They gave everything out to people who didn't pay in, and now its time to pay the piper because the people that were paying it, now all want to collect. There were no savings. They are just PRINTING the money.

    You will get hyperinflation form the currency collapse or reductions in the services or a combination of the two. There is no way it can be paid for in its present form with income taxes because our taxes are so high now that we are killing what few jobs are left.
     
    #111     Apr 10, 2011
  2. the1

    the1

    Well said TB. +1

     
    #112     Apr 10, 2011
  3. piezoe

    piezoe

    You are dead wrong about Social Security. It is most definitely NOT a Ponzi scheme. You have bought hook line and sinker into the Republican line where Social Security is lumped together with Medicare in the same sentence. These folks are philosophically opposed to the very idea of Social Security. I have no problem with that position. What I take issue with are their lies and dishonesty. The Social Security detractors in congress have teamed up with Wall Street to spread all sorts of falsehoods Re SS. Social Security is ironically one of the most efficient, and likely the most useful, things the Federal government has ever done in the nature of a valuable social program. Social security has absolutely nothing to do with the overspending in Washington, nor is it in any way responsible for deficit spending in the U.S. (Medicare is another matter altogether, of course.)

    You owe it to yourself to get the facts before spouting off this ridiculous line about SS being a "Ponzi Scheme." It needs only very minor adjustments to make it sound into the foreseeable future. But sadly, Wall street wants to kill it for quite obvious, selfish reasons. Unless folks such as yourself wake up to reality, they are likely to succeed.

    The main problem that Social Security has is that the Treasury owes billions to the Trust Fund and their is no money to pay that debt without further borrowing. The money was borrowed via debt obligations issued by the Treasury and then spent on subsidies to the military industrial complex via endless wars. (The U.S. spends ~4K$ per capita on "defense" each year while Germany spends ~300$. That together with an out of control medical cartel is the cause of the deficits, current and projected -- not Social Security.

    Get your facts straight and then come back. I'll be happy to debate this with you, but only if we start with reality.
     
    #113     Apr 10, 2011
  4. Forgetting about the fact that all the money SS taxes took in was spent and all they have is a bunch of IOU's owed by a country that is only able to collect 2/3 or so of what it spends, and prints the rest, the fact is that the very first person to file for Social Security paid in less than $25 and received $23,000 in benefits. The people that filed after her likely also collected way more than they had paid in as well. As with all Ponzi schemes, the last to try to collect get short changed. The system design was flawed from the outset by design, and unless taxes are raised again it will run out of funds well before those who paid into it die.

    If it really was the case that those who have retired previously had paid in equal to what they collected, the savings (if they had been money instead of IOU's) would be sufficient to pay off those who are owed by SS currently. That is NOT the case, and it has been known about for DECADES, yet the system has never been corrected. Sure sounds like fraud to me.
     
    #114     Apr 10, 2011
  5. ajcrshr

    ajcrshr

    Unless entitlements are substantially reformed, the U.S. will likely default on its debt; not in conventional ways, but via inflation, currency devaluation and low to negative real interest rates.

    -- Bill Gross April 2011
     
    #115     Apr 10, 2011
  6. .
    April 11, 2011

    SouthAmerica: Reply to thriftybob

    They already started cutting Social Security here in the United States, every year in the last 3 years, and that is the strategy that they are going to use to destroy that safety net.

    The US government has not given a cost of living adjustment for social security recipients here in the United States in the last 3 years, because they claim that there's no inflation here in the old USA.

    And it's just a matter of time for them to freeze the amount people get from social security as they did with welfare.

    Today the priorities of the United States government are: 1) Massive welfare program for Wall Street and financial institutions, and 2) Infinite amount of money available for the United States to wage wars around the world...


    *****


    We discussed that subject a number of times over the years here on the ET economics forum - here is an example:

    http://www.elitetrader.com/vb/showthread.php?s=&postid=2427678#post2427678

    October 26, 2008

    SouthAmerica: Did you know that the US government froze in 1974 the amount that Americans can get as WELFARE monthly benefit payments?

    Until recently WELFARE – was an issue that not even the Republicans had the nerve to touch on that subject.

    Welfare is money paid to persons, from a government, who are in need of financial assistance but who are unable to work for pay.

    A social welfare provision refers to any program which seeks to provide a minimum level of income, service or other support for disadvantaged peoples such as the poor, elderly, disabled, students, unpaid workers such as mothers and other caregivers, and underprivileged groups.

    From January 1974 to January 2008 = 34 years

    What $ 1.00 bought in January 1974 in January of 2008 we need at least $ 5.00 to buy that same item. In another words, if you still receiving today the same amount of money that you used to receive in 1974 then you lost 80 percent of your purchasing power or you got a cut on your income of 80 percent because of inflation during that period.

    Today there is a subject that even the Republicans don’t have the nerve to talk about – and the Republicans usually don’t care which group of people they are screwing most of the time.

    Here is why:

    Do you remember all these programs on television showing to the American people how well all those people were living out of their WELFARE check? And how much fraud was going on in the early 1970’s on that government program?

    Have you seeing any candidate from either political party talking about the subject of welfare and how to cut the welfare program for the very poor in the political campaigns for president in 1996, 2000, 2004, and also in the current presidential campaign?

    The answer is NO, not even the Republicans have the nerve to touch on that subject.

    The candidates talk about reducing entitlements programs, but they are talking about Social Security, Medicare, and Medicaid. They are not talking about the WELFARE program for the very poor.

    The word WELFARE is not part of any politicians’ vocabulary for a long time here in the United States, at least since the decade of the 1980’s.

    Most Americans don’t know it, because nobody in the American mainstream media is interested on this subject today.

    You must be wondering how the US government fixed the problems regarding that program?

    The answer is very simple: the United States government froze the amount people can receive as welfare payment in the year 1974 – the amount people receive as monthly WELFARE payments has not increased in value since 1974, for example if a single person received $ 140 per month from welfare in 1974, a single person still receiving only $ 140 per month as welfare payment in 2008. Inflation cut the amount people receive from WELFARE by 80 percent. Welfare recipients have been receiving an annual cut on their welfare benefits year after year because of inflation.

    To this day most Americans still think that the US government is spending a fortune with the people on welfare, and that welfare is one of the major causes for US government yearly budget deficits.

    They created a certain perception about welfare for the American people in the 1970’s that has nothing to do with the welfare program in the United States in 2008.

    I have no idea how people are surviving on their welfare checks in 2008 – today the amount of money they get as welfare on a monthly basis are below of subsistence level in most parts of the United States, and the only place they might be able to survive on that kind of income is in Zimbabwe.

    It is ironic that the last American president to increase the amount of money that any American can receive as WELFARE payment on a monthly basis it was Richard Nixon a Republican president.


    *****


    I wrote the above piece in January 2008, before the Republican administration had created the largest WELFARE program for the rich in American history to the tune of trillions of US dollars.

    Now the United States has one WELFARE program for the rich where some people are going to make a fortune.

    And the United States still has its old WELFARE program for the destitute and very poor where people are barely being able to survive. Today even in Zimbabwe they must have a better WELFARE program for the poor.

    Anyway, check out if you also qualify for the new US government welfare program for the rich and well connected.

    .
     
    #116     Apr 11, 2011
  7. piezoe

    piezoe

    Again, you should acquaint yourself with facts rather than myths. If as you say: "all the money SS taxes took in was spent," where do you suppose all those billions lent to the Treasury came from? I am fast losing my patience with you, you jackass. Why don't you read up on defined benefit plans, and then come back with something that makes sense.
     
    #117     Apr 11, 2011
  8. Ok, then why isn't there enough money (including the IOUs) there to pay off all all the people still alive that have contributed, if you stopped collecting taxes and stopped accumulating new benefits today?

    THERE ISN'T, IS THERE? ITS JUST THAT SIMPLE. THE DIFFERENCE WAS EITHER NEVER COLLECTED AS TAXES OR PAID OUT AS BENEFITS TO PEOPLE THAT HADN'T PAID IN ENOUGH.

    ITS ALWAYS BEEN A PONZI SCHEME. As soon as they started paying people more than they had contributed on average the result became inevitable.

    Q13: If Ernest Ackerman only received a single lump-sum payment, who was the first person to received ongoing monthly benefits?

    A: A woman named Ida May Fuller , from Ludlow, Vermont was the first recipient of monthly Social Security benefits.

    • Ida Fuller retired in November, 1939

    • Received the first check in January, 1940

    • She contributed $22 in taxes from 1937 through 1939

    • Her first check was for $22.54

    • Ida Fuller died in December 1974

    • She lived just over 100 years

    • In that time she collected Social Security payments totaling $20,944.42

    IMO, *ALL* Defined benefit plans should be illegal unless fully funded in an account in the name and under the control of the recipient each and every paycheck. I am an ex CFO and degreed Accountant.

    PS: My idea of a legitimate defined benefit plan would be that people would contribute each year till retirement, then at that point it could be calculated the payout based on life expectancy net of insurance purchased to make the payments if the person outlived the expected lifetime. Had it been done that way, it wouldn't be a Ponzi scheme because nobody else would need to be cheated if that person happened to live longer than expected.
     
    #118     Apr 11, 2011
  9. piezoe

    piezoe

    for an accountant you know damn little about defined benefit plans such as social security. www.ssa.gov/history/pdf/fr09summary.pdf


    from the 2009 summary (latest report for which a summary is available).

    "Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement.

    Conclusion:
    ... For Social Security, the reform options are relatively well
    understood but the choices are difficult. "

    Also you may search here on ET for many discussions of Social Security.

    You don't seem to be aware that in the case of the U.S. Social Security system those who die relatively young subsidize those who live much longer, and this is the trade-off for having an income stream that can be counted on no matter how long one lives and for lower monthly contributions compared to what is required by defined contribution plans for the same payout and insurance benefits.

    Furthermore, you might note that in 2009 the increase in the contribution rate needed to sustain the system on sound actuarial footing for the next 75 years, amounts to a penny per dollar earned for employer and employee. And there is a third option not mentioned in the summary report, and that is simply to raise the salary ceiling a few thousand dollars. As with any pension plan periodic adjustments are needed.

    Also see:

    http://www.ssa.gov/oact/progdata/fundFAQ.html

    Now go away and stop this absurd nonsense.
     
    #119     Apr 11, 2011
  10. You asked for detailed proof, and now are angry I provided it?

    Her VERY FIRST CHECK was about equal to the TOTAL AMOUNT she put in.

    How many more people collected similar sums in excess of their payments? What was the withholding percentage and cap back then? If the money had been SAVED and earned interest, they wouldn't big need increases now to cover the shortfalls.

    People are living longer, I'll grant that is true, but to argue the system is solvent and then say it needs a 14% increase in tax rate is sort of silly.

    And lastly, and most importantly, WHO is going to repay all those IOU's?
     
    #120     Apr 11, 2011