My Blog

Tag: Debt

  • We’re Dying — Another 5.4 Million Get SS Disability

    Yesterday I re-wrote about Tytler:

    A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury.

    The post when on to cite recent news about how we’re nearing this point.  We have a record number of folks on food stamps, approaching a majority.  We also have a record number of folks who do not pay any taxes… also approaching a majority.  Therefore we are at the point whereby the majority will vote in their own self interest and sink the entire country.

    Today this story comes along:

    A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program.  …

    Since the recession ended in June 2009, the number of people who’ve signed up for disability benefits is twice the job growth figure. (See nearby chart.) In just the first four months of this year, 539,000 joined the disability rolls and more than 725,000 put in applications.via Investors.com.

    Incredible.

    For those that don’t know, disability is something you’re on forever… as in until you die.  You basically become a drain on everyone else in society.  The story goes on:

    This is straining already-stretched government finances while posing a long-term economic threat by creating an ever-growing pool of permanently dependent working-age Americans.

    A long-term economic threat indeed!!

    As a result, by April there were 10.8 million people on disability, according to Social Security Administration data released this week. Even after accounting for all those who’ve left the program — mainly because they hit retirement age or died — that’s up 53% from a decade ago.

    We need everyone to understand that for every person doing nothing collecting a check we need 15, 20, or 30 people out there working and paying taxes for those that don’t.  Further, for every government worker, you need another 20, or 30 workers to pay for their salary and benefits.

    Our ratios of workers to non-workers and workers to government employees is out of whack and unsustainable.  Those who do can no longer support those who don’t (and those who do but do so for the government.)

    Big BIG trouble ahead.

  • European Markets Tank

    European markets took a big hit today, obliterating any hope generated by yesterday’s rally. Contagion is back, baby!  …

    Italy and Spain led the downward trend, with the latter index briefly down over 4 percent.  Yields on Spanish government bonds continued to push 6 percent, but did not exceed that benchmark level.

    via Business Insider.

    The wheels are falling of the bus.  Italy and Spain will soon be Greece, Ireland is not far behind.  The Germans cannot afford to bail-out all of the Eurozone.  They too will fall if pushed much further.

    Our own demise is not much farther away.  The debt is staking up with no end in site.  Investors have to make the choice of holding Europe’s bad paper or the U.S.’s bad paper.  They’ll choose to hold neither.

    Good time to get into the long term commodity market.

  • Illinois Teachers’ Pension Troubles

    It’s important to note that this fund do NOT include CPS teachers.

    Illinois public school teachers and retirees could have reason to worry about the kinds of pension checks they will be getting down the line.  …

    The Springfield State-Journal register reported over the weekend that pension director Dick Ingram sent a memo to his board on Feb. 9, saying he was no longer confident that the state’s largest pension system will continue to pay it enough money to stay above water. The state owes Ingram’s fund $43 billion.  …

    Ingram said pension funding is under severe threat from the state’s unpaid bills, soaring Medicaid costs and the $85 billion in overall unfunded pension liability, which is expected to rise.

    “If that is the case, the only other option available that would significantly change the amount owed is to reduce past service costs for active members and retirees,” Ingram wrote in the memo.  …

    Gov. Pat Quinn addressed the pension crisis shortly after releasing his budget plan in February.  …

    “Everybody is going to get a haircut. No one will get scalped – that’s the basic concept,” the governor added.

    via CBS Chicago.

    Decades of the Machine running both Chicago and the state have led to every government entity in the state not being able to meet it’s obligations.

    This is a wake-up call to not only teachers, but police officers, firefighters, and government workers of every sort.  The good ‘ole days are over.  The gravy train is ending.

    Time to get real.

  • Countries Move to Isolate the U.S.

    Are other countries planning for a U.S. demise?

    “I was in Australia earlier this month and there, as elsewhere on my recent travels, the consensus among the politicians I met (at least in private) was that Washington lacked the will for meaningful course correction, and that, therefore, the trick was to ensure that, when the behemoth goes over the cliff, you’re not dragged down with it. It is faintly surreal to be sitting in paneled offices lined by formal portraits listening to eminent persons who assume the collapse of the dominant global power is a fait accompli. . . . Greece’s total debt is a few rinky-dink billions, a rounding error in the average Obama budget. Only America is spending trillions. The 2011 budget deficit, for example, is about the size of the entire Russian economy. By 2010, the Obama administration was issuing about a hundred billion dollars of treasury bonds every month — or, to put it another way, Washington is dependent on the bond markets being willing to absorb an increase of U.S. debt equivalent to the GDP of Canada or India — every year. And those numbers don’t take into account the huge levels of personal debt run up by Americans. College-debt alone is over a trillion dollars, or the equivalent of the entire South Korean economy — tied up just in one small boutique niche market of debt which barely exists in most other developed nations.”

    Same page there’s this:

    I’m a Canadian, and you might be interested to know that the Harper government are working very hard (in the background) along the same lines as the Aussies. They are doing everything possible to diversify Canada’s export markets away from the US as fast as possible, for example the pipeline to move Alberta and Saskatchewan oil to world markets via the sea, not to the US. Ditto aeroplanes, rail cars, fibre-optic electronics, robotics, lumber, and a wide range of other products.

    The quiet back-room planning is driven by the alarming extent to which the Obama administration has already deeply damaged the US economy (compared to Canada) with its policies, actions, and insane deficits. The Harper government are now moving to shut down US environmentalist activity in Canada — “We’re not going to be your National Park.” says the PM — and are already developping scenarios for maximum-possible disconnect from the States in the event Obama and his crew are returned to power in the coming elections.

    via Instapundit.

    Hummm… not good.  Not good.

  • Our Per Capita Government Debt Worse Than Greece

    This chart was put together by Senator Jeff Session’s office.  I found it over at The Weekly Standard.

  • Athens: Our Future?

    BBC News has a few shots of Athens.  On one of the photos there’s an interesting quote by on of the protesters.

    “Even if they eat the flesh of the people, bankruptcy will not stop.  It will just get worse.  That is why we support a write off of the whole debt and to be free of the European Union.”

    This is an interesting sentiment.  Perhaps the protester is upset that he (or she) is young and did little by way of voting to create the debt problem in the first place.  And yet they refuse to blame their parents and the voters of the previous generation who first caused and then continued down a path to bankruptcy.

    It is either that or the protester simply doesn’t believe in taking any personal responsibility for decisions made; that debt is just something that one can just walk away from at any time.  That running up a huge debt that you cannot afford to pay and walking away is  just something that is completely acceptable.

    Neither rational is good.

    Our day is coming.  How will our youth react to the misdeeds of their parents?  Will they assign blame where it belongs or will they instead believe that just simply walking away is the best option?

  • Illinois, the Greece of America

    It all started with this story:

    Even though the legislature and Gov. Pat Quinn last year imposed a temporary 67 percent state income tax increase, Quinn’s office expects to have a $500 million budget deficit this year.

    Quinn is calling for a 9 percent cut in most areas of state government, except education and health care. But even with cuts at that level, the state would have a projected $800 million budget deficit for fiscal 2015, the year when most of the tax hike expires.  …

    Looking at the bigger picture, the state has a backlog of about $8.5 billion in unpaid bills and owes about $27 billion in outstanding bonds. And then there’s the roughly $80 billion owed to the state’s public employee pension funds.

    via Belleville News-Democrat.

    Think about that: One Hundred Fifteen Billion Five Hundred Million Dollars.  I’m told there’s about 12.9 million people in Illinois.  So were looking at $8,953.50 per person.  That’s pretty astonishing!

    And that story led to this story:

    [W]hy aren’t we more worried about Illinois? It’s more or less the same size as Greece, its finances are in the same generally catastrophic shape, and its leaders are just as feckless and dishonest. It owes tens of billions of dollars to various investors and stakeholders and will clearly have to stiff many of them at some point.  …

    How a state with a constitutional mandate to balance its budget can do this in the first place — and how an “unpaid bill” can be excluded from the annual budget — is a question for future prosecutors. But for investors it’s a clear sign that some sort of default is coming.

    via: Dollar Collaspse.

    Dare to dream that someone (cough cough Madigan) would go to jail on this mess.

    Hat tip to SCC.