America's $1.3 Trillion 06' Deficit

[Nbadan]

The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows.

The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.

"We're on an unsustainable path and doing a great disservice to future generations," says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.

USA Today (http://www.usatoday.com/news/washington/2007-05-28-federal-budget_N.htm)


Incidentally, there was a study long ago that tracked the distribution of wealth and revolutions. There was a clear correlation between the 1% owning more than 20% and a revolution ensuing through history. Thus, the 1-20 threshold was observed through the Russian revolution, the French revolution, the fall of the Roman empire (which was not a single internal event though), the bankruptcy of the Spanish crown, etc. Ironically the US passed that threshold 15+ yrs ago. So two things can be going on here, either Americans are one of the most patient people on Earth, or they are one of the dumbest lazies motherfuckers in history.

Some kids are willing to fight half a world away in the sand for some nebulous idea of liberating some people that never attacked us, but when it comes to defend their own interests -i.e. they are earning less than their fathers, having to work more for less pay, and no economic future whatsoever at the current debt rate- they are quite passive, disorganized, and frankly they display such an apathy that is either genetic, or the end product of a brillian campaign of devolution by the ruling oligarchies.

[Wild Cobra]

And when president Bush wanted to try to fix the probelms on Social Security, the demoncraps went nuts on him!

[boutons_]

"fix the probelms on Social Security,"

dubya didn't want to fix shit. He wanted inefficiently to privatize the highly efficient SocSec to the benefit of his corporate owners and to the detriment of SocSec particpants.

[01Snake]

the highly efficient SocSec


:lol

[RandomGuy]

:lol

Social Security isn't run by a management that takes $200M severance packages...

[DarkReign]

Incidentally, there was a study long ago that tracked the distribution of wealth and revolutions. There was a clear correlation between the 1% owning more than 20% and a revolution ensuing through history. Thus, the 1-20 threshold was observed through the Russian revolution, the French revolution, the fall of the Roman empire (which was not a single internal event though), the bankruptcy of the Spanish crown, etc. Ironically the US passed that threshold 15+ yrs ago. So two things can be going on here, either Americans are one of the most patient people on Earth, or they are one of the dumbest lazies motherfuckers in history.

Ask that question when a very large portion of the American people start starving and living well below the pverty level.

Out of all the Empires you cited, Russia was the best off. That says alot for the others and how fucking terrible it truly was before any meaningful change occured.

The US isnt in that position (as of yet). But if/when we do get to that point, the hungry will find food...by any means necessary.

[RobinsontoDuncan]

Ask that question when a very large portion of the American people start starving and living well below the pverty level.

Out of all the Empires you cited, Russia was the best off. That says alot for the others and how fucking terrible it truly was before any meaningful change occured.

The US isnt in that position (as of yet). But if/when we do get to that point, the hungry will find food...by any means necessary.


Uh...Russia has never, ever, ever been well off.

I think you mean Rome

[George Gervin's Afro]

And when president Bush wanted to try to fix the probelms on Social Security, the demoncraps went nuts on him!


It was a bad idea. Like other decisions dumbya has made.

[Yonivore]

It was a bad idea. Like other decisions dumbya has made.
Why is privatization of Social Security a bad idea?

[BacktoBasics]

Of all the shit Bush has done to fuck up our society I do think his efforts to help the SS problem should have been looked at with more open eyes.

[George Gervin's Afro]

Why is privatization of Social Security a bad idea?


Where will the money come from to start up these private accounts? Who is going to monitor/maintain these accounts? Will the money come from the SS fund now? Who or what will make up this difference? What if I don't want to participate? Will my benefits be cut because the money was partially used to start up these private accounts for which I chose not to participate? Will the creation of these private accounts affect my potential future benefits?

[Extra Stout]

Where will the money come from to start up these private accounts?
Part of the current SS withholdings of those who choose to opt out.


Who is going to monitor/maintain these accounts?
Those who opt out of SS would have been responsible for managing their own funds.


Will the money come from the SS fund now? Who or what will make up this difference?
Those who opted out of SS would have gotten zero SS benefits, but still would have had to pay some SS tax. So SS itself would have seen a net gain (fewer contributions, but even fewer benefits owed).


What if I don't want to participate? Will my benefits be cut because the money was partially used to start up these private accounts for which I chose not to participate? Will the creation of these private accounts affect my potential future benefits?
Opting out would have been optional. Those who preferred to have the government manage their accounts still would have been able to do so, and it would be expected that most Americans would maintain the status quo.

The effect on future benefits would depend on how many people opted out. The more people that did so, the fewer the future obligations on Social Security, and the greater chance that the system could remain solvent through the retirement of the Baby Boomers.

Most of the people who would have opted out would have been the affluent and investor classes, who could get a better return on their money in their own accounts than the state could in SS, even taking into account the leftover SS tax they still would have to pay. And then, the government could collect taxes on those accounts once the well-off retired.

So those who opted out would end up with more money, the SS program itself would see a boost, and the capital markets would enjoy the influx of extra cash.

But it can't be explained in a 10-second soundbite, so it was D.O.A.

[boutons_]

Snake, what's the %age of admin overhead to run SocSec funds?

How much do SocSec mgmt take in over-compensation and golden parachutes?

How many $Bs are paid out in dividends to SocSec stockholders?

For-profit SocSec fund is as stupidly wasteful as for-profit health care.

[Aggie Hoopsfan]

"fix the probelms on Social Security,"

dubya didn't want to fix shit. He wanted inefficiently to privatize the highly efficient SocSec to the benefit of his corporate owners and to the detriment of SocSec particpants.

Highly efficient? :lmao

[Aggie Hoopsfan]

Snake, what's the %age of admin overhead to run SocSec funds?

How much do SocSec mgmt take in over-compensation and golden parachutes?

How many $Bs are paid out in dividends to SocSec stockholders?

For-profit SocSec fund is as stupidly wasteful as for-profit health care.

For perspective here for the forum dumbass (that would be you, boutons):

The most fees I am paying on any of my 401k funds is 1.8% of the yearly return. Last year, after the management fees and expenses of my portfolio, I made about 19% return on my 401k (granted this is rolled forward to my retirement, but the point remains, even after management fees that's a hell of a return).

Conversely, even if people didn't take the time to research funds, and just parked them in an index fund (which has very little management and expense fees, on average somewhere around 0.5% of annualized returns), they would have made 6-8%.

So as opposed to watching what everyone is putting into SS nowadays, think about having control of ones own retirement funds. It'd be pretty damn nice.

The sad thing about Bush's SS reformist talk is that it needed to be done but the Democraps turned it into a partisan political issue and killed it on arrival.

And moving forward, we're still fucked as far as our future goes.

And if you really think Social Security is 'highly efficient', I have some nice ocean front property outside of Lincoln, Nebraska for your clueless ass.

[Yonivore]

Where will the money come from to start up these private accounts?
Where's the money going to come from to keep the current Ponzi Scheme afloat?

Eventually, the country is going to have to reboot their entire entitlement mentality.

I for one am willing to forgo all the contributions I've made to the Social Security Administration, to date, if they would allow me to roll an amount equivalent to my current Social Security contribution into a private retirement account, Roth IRA, 401K, whatever.

I just want out...


Who is going to monitor/maintain these accounts?
It's my money, I'll monitor it.


Will the money come from the SS fund now?
As I indicated above, they can keep what they have of mine so far. They just can't have anymore.


Who or what will make up this difference?
Again, where's the shortfall going to come from if we keep going down the path we're on now?


What if I don't want to participate?
You're an idiot.


Will my benefits be cut because the money was partially used to start up these private accounts for which I chose not to participate?
Trust me, your benefits are already going to be cut -- if nothing changes. And, on top of that, you'll have to work longer before becoming eligible to receive Social Security payments.


Will the creation of these private accounts affect my potential future benefits?
Yeah, if you opt into them, your return will be greater than it would be if you stayed with Social Security.

[Nbadan]

Where's the money going to come from to keep the current Ponzi Scheme afloat?

Bingo. We are using today's taxes to pay for today's retirement benefits, and the 'excess' goes into the general treasury where it is quickly replaced by IOU's to pay for things like Dubya's misadventure into Iraq and make the budget appear to be more in balance. This ponzi scheme will continue only as long as the money being paid into the system is more than the money the system will have to pay out, but once the majority of baby boomers retire, the only real answer I see is means-testing, but by then today's politicians won't have to face questions about why they didn't do anything to save SS while there was still time. Just like global-climate change.

[Yonivore]

The point is, the federal government has no business saving for my retirement.

Give me 100% of my wages and let me invest for my own freakin' retirement, buy my own insurance, etc...

[clambake]

The point is, the federal government has no business saving for my retirement.

Give me 100% of my wages and let me invest for my own freakin' retirement, buy my own insurance, etc...
Yoni, basically, thats what you're doing now. There's no guarantee SS will be there in the end, but I get your point.

[mikejones99]

Gov't don't give a fuck, they can just print more whenever they want.

[BradLohaus]

Gov't don't give a fuck, they can just print more whenever they want.

That is their plan. Their only option, really.

The whole SS system has to be unconstitutional. If the government had tried to take Jefferson's money and invest it for him he would have been killing people before he let that happen.

Always remember that the unconstitutional Federal Reserve caused the Great Depression that resulted in the SS system in the first place. In fact, they admitted it in a speech by Chairman Bernanke to Milton Friedman honoring Friedman on his 90th birthday:

http://www.federalreserve.gov/boarddocs/speeches/2002/20021108/default.htm

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

Best wishes for your next ninety years."

Well at least they're sorry :rolleyes

I'm sure they now possess all of the knowledge necessary to prevent anything like the Great Depression from ever happening again. :rolleyes
I'm not counting on that. I'm not counting on getting the full value of my SS payments back either. Maybe I will, maybe I won't, but sooner or later some generation is going to get it stuck to them.

[jacobdrj]

Funny that it is republicans who call for a balanced budged law...

That would have stopped this war right in it's tracks a while ago... or killed the economy worse than it already is...

If we are gonna talk about couldda wouldda shouldda, the fact is that Daddy Bush should have finished the job back in the eighties. The timing is bad.

[Wild Cobra]

"fix the probelms on Social Security,"

dubya didn't want to fix shit. He wanted inefficiently to privatize the highly efficient SocSec to the benefit of his corporate owners and to the detriment of SocSec particpants.
I see you don't know what you are talking about. No solid plan was set in place, but the general idea was to allow part of your SS deduction to be used as a private account. The current SS system wouldn't lose much, at the most half. The future number of people collecting would be reduced too.
It was a bad idea. Like other decisions dumbya has made.
It was a good idea. I guess if you only listen to the leftist pundits, it's easy to believe it to be a bad idea.

Yes... president Bush has made some bad decisions. He at least had the integrity and moral fortitude to do as he believes and not flip-flop on issues.

Talking about bad ideas? Consider this. Refusing to even talk about the issue like the democraps did is a bad idea!

[smeagol]

"fix the probelms on Social Security,"

dubya didn't want to fix shit. He wanted inefficiently to privatize the highly efficient SocSec to the benefit of his corporate owners and to the detriment of SocSec particpants.
:lol

Man you're stupid

[Nbadan]

Good article by Greg Palast...

The Future May Not Suck
by Greg Palast


We're not asking for much: a Social Security check that won't bounce, schools for our kids that won't make them dumber, a fighting chance for a job that will let us take the tykes to Disney World, health insurance, and, when the waters rise, a government that will have some kind of plan to pluck us from the flood.

Fat chance.

Thom Hartmann's written a killer new book, "Screwed: The Undeclared War Against the Middle Class — And What We Can Do About It." Here's the Afterward I wrote for it. Read this, listen to Thom and I today on your local Progressive Talk/Air America station. Then get the book, get the point, get active.

Since Thom first wrote this alarm-ringing book, the war has turned severely, senselessly brutal. I'm talking about the Class War -- and if you're in the middle zone, No Man's Land, well, Good luck, Jack!

Since Thom's book hit the street, 38,000 workers at Ford Motor lost their jobs. Add that to the Delco Auto Parts bankruptcy and all of Michigan is busted. In the Bush years, the average annual income in that state declined by $9,000 per family.

You didn't have to move to Michigan to get it in the neck. Average income in the U.S has fallen $2,000 per household since the last days of Bill Clinton.

Hartmann once told me that Thomas Jefferson said his greatest accomplishment was the founding of the University of Virginia -- establishing the right of Mr. and Ms. Average Income to a decent, free education. "Universal education." That's what made this nation King of the Planet -- a conquest of ideas, ideals and inventions that no imperial army could have accomplished.

Jefferson thought free universal education so important he had his university presidency, not the U.S. presidency, carved on his tombstone.

But I think that behind Jefferson's seemingly over-the-top enthusiasm for educating the country was an unstated fear that, unless Americans stayed continually informed, knowledgeable and alert, we'd end up a nation of knuckleheads and pea-brains ruled by dangerous, pompous pinheads who would take away our rights on the way to taking our wealth.

Jefferson was right: education's the key. I had feared that the 2004 presidential election, recording a Republican plurality, was an intelligence test that America flunked. But, by the end of 2006, the Great American Middle rose up in revolt and voted the scoundrels out.

Generally, we've done OK. FDR expanded our Bill of Rights with the Four Freedoms, including a New Deal guaranteeing our economic security. They don't dare take that away -- in the open. I know our nation has sometimes fallen into the Bushes, but we always seem to get back up on our hind legs and follow our populist scent back to the True Path.

Of course, the story's not over. Whichever party is in the majority in Congress, it remains a millionaire's club where Average Americans, plucked of their vote, are soon carved into chewable pieces for the corporate carnivores.

Like I say, we aren't asking for much: Hartmann's prescriptions to cure America can be summarized on a photo of Laura Bush's fake smile. That's the point. Ultimately, it's not up to the new congressional Democratic majority to save the Great American Middle -- it's up to us, to hold them to their promises.

I want you to photocopy Thom's conclusion, The Road to Victory, and check off each task as you complete it, from joining a union to calling into a radio talk show.

Then, years from now, when your kids ask you, "What did you do in the Class War, daddy?" you can point to the list and say, "My share."

Check out the podcast of Palast on Thom Hartmann's 5/29 show here: Linky (http://www.mythical.net/screwed/index.htm)

[Aggie Hoopsfan]

Of course, the story's not over. Whichever party is in the majority in Congress, it remains a millionaire's club where Average Americans, plucked of their vote, are soon carved into chewable pieces for the corporate carnivores.

Well, at least he got one part right.

[Nbadan]

Well, at least he got one part right.

It's bi-partisan class war-fare, he makes no bones about this, but the M$M, our fourth estate is DOA, that's why we all must be more diligent.

[SPARKY]

A preferable option for Social Security would be to transition it into an income guarantee for those retirees who truly need it. I can't think of a worse government program than one that taxes low income workers regressively to pay benefits to affluent retirees. The main tenet of Social Security is that those who can't work anymore should have some base level of income in our society. At the end of the day, I believe that's what most Americans want and if given the choice, would choose that over the current monstrosity that forces everyone to participate and is unsustainable without higher payroll tax rates or other tweaks such as requiring beneficiaries to work until they are 95 or so.

Regarding changing the system, the problem is that any fundamental change is subject to well-funded violent opposition from groups whose very existence is based on demagoguery of any such change. Political self-continuance is all that matters, not what's best for the country.

[Nbadan]

A preferable option for Social Security would be to transition it into an income guarantee for those retirees who truly need it. I can't think of a worse government program than one that taxes low income workers regressively to pay benefits to affluent retirees. The main tenet of Social Security is that those who can't work anymore should have some base level of income in our society. At the end of the day, I believe that's what most Americans want and if given the choice, would choose that over the current monstrosity that forces everyone to participate and is unsustainable without higher payroll tax rates or other tweaks such as requiring beneficiaries to work until they are 95 or so.

This is why means-testing is the only logical answer. If we let younger workers pull out of SS now, the ponzi sceme fails just that much quicker.

[SPARKY]

A system requiring payments only to those who need it should require lower a payroll tax rate for all workers.

[Nbadan]

Ideas like lowering the capital gains tax for those of us who manage to save enough to retire comfortably is a start, but it's all dependent on how many people actually need SS in the future.

[Nbadan]

The credit bubble that fed the housing boom is bursting....

Mortgage rates: biggest spike in 4 years
Rate on 30-year fixed mortgage gained 21 basis points in past week, to 6.74%,
highest level since July 2006.
By Rob Kelley, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Mortgage rates made their largest upward movement in nearly 4 years, and the 30-year fixed-rate reached its highest level since July 2006, Freddie Mac said Thursday.

The average rate on 30-year fixed-rate loans climbed to 6.74 percent for the week ending June 14, from 6.53 percent the previous week. That marked the biggest one-week increase since July 2003.

The 30-year rate stood at 6.15 percent on May 10th, just before it turned sharply up. Doug Duncan, chief economist for the Mortgage Bankers Association (MBA), expects mortgage rates to top out near 7 percent by the end of the year.

CNN Money (http://money.cnn.com/2007/06/14/real_estate/mortgage_rates/index.htm)

Cheap money led to people being able to afford larger homes. With interest and appreciation of these homes moving upward, there are fewer and fewer qualified buyers. This is why we have a 2-3 new home inventory back-log and why larger homes are starting to stay on the market much longer.