Well its been a while since my last post and so much has happened out there its difficult to make a start. So my first stop are the Big Global Banks that have made great profits over the last decade but now are in real difficulties because of there irresponsible leading. How many will go Bust
Why does nobody bring them to task? When the good times are here, they lend money hand over fist even if you don't need it they try to get you to borrow more money than you need to finance, bigger cars, bigger houses and more exotic holidays.
They are only interested in there targets not the people, we have to move away from the idea that banks are there to help you. They don't care if you are sick, die or need help the money is king 1st and last. Now I don't mind them being in the business of making money but the thing that drives me mad is the way they advertise the services to us that they really care about you as a customer and they want to help you and your family for a better future. What rubbish as we are seeing how they deal with there mistakes in the subprime sector.
My letter box regularly gets between 5 and 10 loan offers a week. Then I get the cold calling on my telephone offering me vast sums of money to improve my lifestyle.
The problem with all these offers is that the money has to be paid back and with high interest rates. Then when the hard times come they draw in there lending and start to refuse to offer money to any body even people with proven track records. They react to the herd instinct, they get easily frightened and react without first assessing the risks. The CEO's of these corparations get fantastic salaries with great bonus's and still cock it up.
In the 70s and 80s Bank Managers were skilled in the financial markets and could assess individual risks from there customers, they did not have to rely on ticks sheets to form an opinon, they had the power and experience to make an educated decision before he would grant a loan.
Want went wrong with this system?
I have my ideas but perhaps you the readers might like to answer them?
The Governments are aware of this mess but are reluctant to take on the big Banks.
Saturday 3 November 2007
Monday 30 July 2007
Test your Country's Wealth
I have been asked by family and friends how I judge a countries wealth.This is how I do it.
Do the simple test:
Take a look at your country's infrastructure its a good test of wealth and how good or bad the government politics are running in your country. Its not rocket science but it brings home the truth.
Answer these questions?
with 2 point for Good, 1 point for ok. and -0 for bad:
>Water supplies =
>Telecom systems =
>Gas supplies =
>The condition of the public roads, =
>Public transport, =
>Health care, =
>Education in schools =
>Crime =
>Rubbish clearance =
Now if any body gets the maximum of 18 points drop me an email of where you live and I will be your new neighbor!
Of course there are other factors that affect the quality of life such as unemployment, taxation rates, inflation and interest rates but these move up and down through cycles in most countries but if the infrastructure is crumbling then its the biggest signal to the man in the street that things have stopped working within the government.
Look at this way if you drive to work and the road condition starts to get worst every day and very little repairs are carried out and the cars are starting to get damaged by driving over pot holes but the taxes keep rising its time to start to take notice about your counties government.
Do the simple test:
Take a look at your country's infrastructure its a good test of wealth and how good or bad the government politics are running in your country. Its not rocket science but it brings home the truth.
Answer these questions?
with 2 point for Good, 1 point for ok. and -0 for bad:
>Water supplies =
>Telecom systems =
>Gas supplies =
>The condition of the public roads, =
>Public transport, =
>Health care, =
>Education in schools =
>Crime =
>Rubbish clearance =
Now if any body gets the maximum of 18 points drop me an email of where you live and I will be your new neighbor!
Of course there are other factors that affect the quality of life such as unemployment, taxation rates, inflation and interest rates but these move up and down through cycles in most countries but if the infrastructure is crumbling then its the biggest signal to the man in the street that things have stopped working within the government.
Look at this way if you drive to work and the road condition starts to get worst every day and very little repairs are carried out and the cars are starting to get damaged by driving over pot holes but the taxes keep rising its time to start to take notice about your counties government.
Saturday 21 July 2007
The US Social Security System: Analysis & Commentary
Government politics is all about power and greed so after reading this article on the U.S social security system I thought it was worth entering it into the blog.
The US Social Security System: Analysis & Commentary by JOHNNY FUERY
Finance & Investment,Government,Law
The US Social Security System: Analysis & Commentary
© 2006 by Johnny Fuery Originally published at fuery.com on 5/2006. This article is freely distributable provided this notice remains.
Social Security is a social insurance program. The United States Social Security program provides benefits for retirement, disability, and death. There has been a great deal of public discussion recently, largely spawned from President Bush’s 2005 State of the Union address, when he said that “on its current path, [Social Security] is headed toward bankruptcy… by 2042 the entire system would be exhausted and bankrupt” (C-SPAN, 2005). This essay examines that statement from an economic perspective and analyzes some of the highly publicized proposed solutions. While historical aspects of the program will be mentioned peripherally, “Social Security” within this context refers to only the defined-benefit pension plan, with a specific focus on the retirement benefits.
How Social Security Works
The Social Security Act was signed into law under President Franklin D. Roosevelt in 1935. As originally drafted, the program was far less ambitious than it has become. It outlined a wealth transfer system whereby current workers were taxed at a rate of 2%, paid equally by the worker and the employer. While both the defined benefits and the tax rate have changed, the fundamental act of transferring wealth via payroll tax from current workers to retirees remains in effect presently (Wikipedia, 2006).
In the years since the act was first signed into law, the program has expanded to include medical insurance to the elderly through Medicare, disability insurance, and the expansion of participation to include nearly all workers. Whereas half of workers in 1935 were exempt from the program, it is now nearly impossible to avoid participation. The defined-benefits pension portion of the program is funded today by a 12.4% tax split evenly between employers and employees. Medicare is funded and accounted for separately with a 2.9% tax, also split between workers and employers (Social Security Online, 2005). These taxes are imposed only on the Social Security wage base, or “Contribution and Benefit Base”. The wage base was $90,000 in 2005, having risen dramatically since the 1983 Amendments to Social Security (Social Security Online, 2005), signed into law by President Reagan based on recommendations from a commission chaired by Alan Greenspan. This amendment allowed for adjustments to both the wage base and benefits payments based on the National Average Wage Index, an index compiled by the Social Security Administration, rather than direct congressional direction through a statute.
Social Security has run a surplus since its inception. Since 1983, the program has run a dramatic surplus. However, due to unified budgeting, the practice of including social security surpluses (or shortfalls, were there any) in the government’s general accounting, these receipts have served to offset annual budget deficits. As of 2005, the Social Security program has amassed a surplus of $1.86 trillion (Social Security Online, 2006). However, this “result[s] in the issuance of Treasury bonds to the [Medicare and Social Security] trust funds in years of annual cash flow surpluses” (Social Security Online, 2005). This means that government “buys” bonds from itself. Furthermore, “since neither the interest paid on the Treasury bonds held… nor their redemption, provides any net new income to the Treasury, the full amount of the required Treasury payments to these trust funds must be financed by some combination of increased taxation, increased Federal borrowing and debt, or a reduction in other government expenditures” (Social Security Online, 2005). These bonds are also excluded from the accounting of the National Debt. Ultimately, this means that the Social Security Trust Fund is merely an accounting ruse and that these paper surpluses have long since been spent through mismanagement of funds. Despite political rhetoric to the contrary, the current Social Security system is entirely a “pay as you go” program. Funding to retirees, beneficiaries drawing income from the system, is provided directly from current worker contributions.
Finally, Social Security is a regressive tax, since the tax rate drops as income rises. According to the U.S. Census Bureau, nearly 15% of the American population earned over $100,000 in 2002 (2003, p. 23). Thus, the top 15% of wage earners paid a smaller portion of their wages than the 85% of Americans in the lower and middle socioeconomic classes.
The Social Security Crisis
Much of this attention has been created because the Bush Administration has proposed to privatize portions of the social security program. Because, as outlined above, there are no underlying economic assets in the Social Security Trust Fund, the system’s solvency is dependent entirely on current receipts. Changes in demographics, including an earlier average retirement age, a longer average lifespan, and a large group of soon-to-be retired workers, the Baby Boom generation, have all contributed to a reduction in the ratio of workers to beneficiaries. In 1950, there were 16 workers paying into the system for each retiree drawing from it. This had fallen below 4 as of 2000 and continues to decline (Goldman Sachs, pp. 4, 11). As President Bush said in 2005, “instead of sixteen workers paying in for every beneficiary, right now it’s only about three workers. And over the next few decades that number will fall to just two workers per beneficiary. With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees” (C-SPAN, 2005).
It is estimated that the first shortfall will occur in 2018 (C-SPAN, 2005), “a day of reckoning, [when] retiree benefits will exceed payroll tax receipts” (Washington Post, 2005). Furthermore, because current surpluses are included in the unified budget, the decreasing surplus is contributing to growing deficits today. The deficits will have to be paid for through spending reductions, tax increases, or additional debt, all of which would have a contractual effect on gross domestic product over the medium and long term.
Proposed Solutions
President Bush has outlined a solution centered around the establishment of Personal Retirement Accounts. This is an opt-in program that would allow younger workers to allocate a portion of their payroll taxes to privately held retirement accounts. These accounts would be highly regulated and offer limited flexibility to the worker, but would nonetheless be separated from the general social security fund and thus unavailable to the unified budget. As a young worker myself, this sounds like a positive idea at first glance. However, from an economic perspective, this does nothing to resolve the underlying problem, the fact that the ratio of workers to beneficiaries is dropping. Privatization, in fact, exacerbates the problem, because the allocation of funds away from the current social security program means that there will be fewer dollars available for current beneficiaries.
Another point of controversy is the manner in which benefits increases occur. They are currently increased automatically based on the National Average Wage Index, as described above. This index tracks wages, not inflation, and should thus cause Social Security benefits to echo overall improvements in the nation’s standard of living. Due to expansionary economic growth, each successive generation should be better off than its predecessor. This means that, given a consistent worker-to-beneficiary ratio, it should be both possible and plausible to expand social security benefits indefinitely. Switching to a price-indexing model effectively maintains the standard of living at the time of the transition. While this seems trivial, it fundamentally alters the philosophy behind the Social Security program from a pension plan, where retirees receive benefits akin to the amount they paid into the program, to a form of welfare, guaranteeing only a basic level of support as defined at the time of transition. For example, if current benefits had been price-indexed at 1990 price levels, than basic services would not include any improvements in the standard of living since 1990, such as wireless communication or access to the internet. “Price indexing would preserve the purchasing power of Social Security benefits [at today’s levels], but these benefits would represent an ever-declining percentage of earnings before retirement” (Munnell & Soto, 2005, p.1).
One suggestion that is popular among politicians from the Democratic party is to actually exercise the Social Security Trust Fund. If it were possible to return the nearly two trillion dollars currently owed to the Trust Fund from the general federal budget, this would delay any shortfalls until 2042 according to Social Security trustees, or 2052 according to the Congressional Budget Office (Washington Post, 2005). This represents getting the general federal budget in order and generating a surplus annually to repay the debt to the trust fund. This is a very positive suggestion that would have a great deal of positive side effects. Increasing the national savings rate would tend to lower interest rates, spawning further business investment, increasing the aggregate supply curve. The improved growth would also tend to delay the 2042 day of reckoning, since the estimate includes a relatively anemic annual growth in gross domestic product of only 1.8% (Washington Post, 2005). This would certainly alleviate the crisis in the immediate term. Still, the fundamental issue of a decreasing worker-to-beneficiary ratio would remain.
Conclusion
The 1983 Amendments to Social Security were inappropriate. The solvency of the Social Security system was not in serious jeopardy and the hike in payroll taxes was used to hide lack of fiscal responsibility in the general federal budget at the time. “In 1983, Congress knew that new revenue would be used to reduce the budget deficit, not saved to fund future obligations. But when the time came to pay back Social Security, it was understood that the burden would be shared by taxpayers and the government at large” (Washington Post, 2005).
I believe that social security is a worthwhile institution that works relatively well and needs only minor updating. The simple, hard truth is that the worker-to-beneficiary ratio needs to be increased back to a manageable level. From 1950 to 1997, the average life expectancy at birth for both genders was 68.1. The same figure in 1997 was 76.5, an improvement of over eight years (Moody, 2006). This would imply that a similar increase in retirement age over time is appropriate. In 1950, the worker-to-beneficiary ratio was 16 to 1, and the payroll tax was 3%. Benefits, such as a provision for early retirement and disability benefits, were added throughout the 50s, and the tax was steadily increased to 6% by 1961 (Wikipedia, 2006).
Setting aside the political difficulties of implementation, I propose the following changes. First, the unified budget should be dissolved. Legislators cannot be allowed to raid the coffers of our national pension system to cover up their own inability to manage a budget. In return, the federal government should be forgiven the nearly two trillion dollars they’ve already stolen from the pension fund. The American people were lied to in 1983, but that’s water under the bridge at this point, and there are enough fiscal difficulties that will be created by the removal of the Social Security surplus from the budget as it is.
Secondly, the retirement age should be shifted upwards to increase the worker-to-beneficiary ratio. This is difficult politically, but it addresses the problem directly and definitively. A sliding scale retirement age, with congruent benefits definitions for early retirees, should be implemented. Including the number of years worked in this formula also seems like a fair stipulation that would partially make up for the regressive nature of payroll taxes. For example, a worker with little education who began working and contributing to the system at 16 should certainly be entitled to withdraw benefits earlier than a privileged, highly educated citizen who delayed entering the workforce until the age of 30. Not only does the lower-skilled worker have a shorter life expectancy, but more has been contributed to the system relative to the benefits ultimately received, since benefits are based on 35 years of work history.
Finally, payroll taxes should be lowered to match the reduced benefit liabilities. This would provide a stimulus to the economy and encourage spending. A baseline Trust Fund reserve should be immediately established through the issuance of bonds. The payroll tax should then be lowered to a break-even point, including the interest and modest repayments on these new bonds. A drop in payroll taxes would immediately provide economic stimulus. Savings passed on to workers would spawn additional consumption and increase the aggregate demand curve. Savings passed on to employers would spawn additional investment, increasing the aggregate supply curve (Tucker, 2004, pp.284-293).
Both Keynesian and supply-side ideologists should be pleased by this proposal. The additional growth would also help reduce the impact the removal of social security surplus receipts would have on the general budget.
by JOHNNY FUERY
Works Cited
C-SPAN. (February 2, 2005.) State of the Union 2005 Transcript. National Cable Satellite Corporation. Retrieved from http://www.c-span.org/executive/transcript.asp?cat=current_event&code=bush_admin&year=2005 on April 22, 2006
Goldman Sachs. (July 31, 2005.) Global Aging – Capital Market Implications. Goldman, Sachs, & Co. Retrieved from http://www.ced.uab.es/jperez/PDFs/GoldmanSachs.pdf on April 21, 2006.
Munnell, Alicia & Soto, Mauricio. (2005.) What Does Price Indexing Mean for Social Security Benefits? Trustees of Boston College, Center for Retirement Research. Retrieved from http://www.bc.edu/centers/crr/facts/jtf_14.pdf on April 20, 2006.
Moody, Errold F. (2006.) Life Expectancy Tables from the National Vital Statistics System. Errold F. Moody. Retrieved from http://www.efmoody.com/estate/lifeexpectancy.html on April 22, 2006.
Social Security Online. (October 14, 2005.) Automatic Increases: The Contribution and Benefit Base (2005). The Social Security Administration. Retrieved from http://www.ssa.gov/OACT/COLA/cbb.html on April 21, 2006.
Social Security Online. (February 7, 2006.) Actuarial Publications: Trust Fund Data (2006). The Social Security Administration. Retrieved from http://www.ssa.gov/OACT/STATS/table4a3.html on April 21, 2006.
Social Security Online. (March 23, 2005.) Actuarial Publications: Status of the Social Security and Medicare Programs (2005). The Social Security Administration. Retrieved from http://www.ssa.gov/OACT/TRSUM/trsummary.html on April 21, 2006.
Tucker, Irwin B. Survey of Economics (4th ed.). Mason, Ohio: South-Western, 2004.
US Census Bureau. (September, 2003.) Income in the United States: 2002. U.S. Department of Commerce. Retrieved from http://www.census.gov/prod/2003pubs/p60-221.pdf on April 20, 2006
Washington Post, The. (January 2, 2005.) Revamping Social Security: Experts Disagree on Severity of Shortfall’s Consequences. The Washington Post. Retrieved from http://www.washingtonpost.com/wp-dyn/articles/A41423-2005Jan1.html on April 21, 2006
Wikipedia (April 22, 2006.) Social Security (United States). Wikipedia, the Free Encylopedia. http://en.wikipedia.org/wiki/Social_Security_(United_States) on April 22, 2006.
About the Author
Johnny Fuery is a technologist, real estate investor, and occasional author. He commonly opines, advises, and whines on these topics at fuery.com.
This article is © 2006 by Johnny Fuery Originally published at fuery.com on 5/2006. This article is freely distributable provided this notice remains.
Related Articles - Social Security, Baby Boomers, entitlement programs, government pension system, government, politics, economics, investing for the future, government,
The US Social Security System: Analysis & Commentary by JOHNNY FUERY
Finance & Investment,Government,Law
The US Social Security System: Analysis & Commentary
© 2006 by Johnny Fuery Originally published at fuery.com on 5/2006. This article is freely distributable provided this notice remains.
Social Security is a social insurance program. The United States Social Security program provides benefits for retirement, disability, and death. There has been a great deal of public discussion recently, largely spawned from President Bush’s 2005 State of the Union address, when he said that “on its current path, [Social Security] is headed toward bankruptcy… by 2042 the entire system would be exhausted and bankrupt” (C-SPAN, 2005). This essay examines that statement from an economic perspective and analyzes some of the highly publicized proposed solutions. While historical aspects of the program will be mentioned peripherally, “Social Security” within this context refers to only the defined-benefit pension plan, with a specific focus on the retirement benefits.
How Social Security Works
The Social Security Act was signed into law under President Franklin D. Roosevelt in 1935. As originally drafted, the program was far less ambitious than it has become. It outlined a wealth transfer system whereby current workers were taxed at a rate of 2%, paid equally by the worker and the employer. While both the defined benefits and the tax rate have changed, the fundamental act of transferring wealth via payroll tax from current workers to retirees remains in effect presently (Wikipedia, 2006).
In the years since the act was first signed into law, the program has expanded to include medical insurance to the elderly through Medicare, disability insurance, and the expansion of participation to include nearly all workers. Whereas half of workers in 1935 were exempt from the program, it is now nearly impossible to avoid participation. The defined-benefits pension portion of the program is funded today by a 12.4% tax split evenly between employers and employees. Medicare is funded and accounted for separately with a 2.9% tax, also split between workers and employers (Social Security Online, 2005). These taxes are imposed only on the Social Security wage base, or “Contribution and Benefit Base”. The wage base was $90,000 in 2005, having risen dramatically since the 1983 Amendments to Social Security (Social Security Online, 2005), signed into law by President Reagan based on recommendations from a commission chaired by Alan Greenspan. This amendment allowed for adjustments to both the wage base and benefits payments based on the National Average Wage Index, an index compiled by the Social Security Administration, rather than direct congressional direction through a statute.
Social Security has run a surplus since its inception. Since 1983, the program has run a dramatic surplus. However, due to unified budgeting, the practice of including social security surpluses (or shortfalls, were there any) in the government’s general accounting, these receipts have served to offset annual budget deficits. As of 2005, the Social Security program has amassed a surplus of $1.86 trillion (Social Security Online, 2006). However, this “result[s] in the issuance of Treasury bonds to the [Medicare and Social Security] trust funds in years of annual cash flow surpluses” (Social Security Online, 2005). This means that government “buys” bonds from itself. Furthermore, “since neither the interest paid on the Treasury bonds held… nor their redemption, provides any net new income to the Treasury, the full amount of the required Treasury payments to these trust funds must be financed by some combination of increased taxation, increased Federal borrowing and debt, or a reduction in other government expenditures” (Social Security Online, 2005). These bonds are also excluded from the accounting of the National Debt. Ultimately, this means that the Social Security Trust Fund is merely an accounting ruse and that these paper surpluses have long since been spent through mismanagement of funds. Despite political rhetoric to the contrary, the current Social Security system is entirely a “pay as you go” program. Funding to retirees, beneficiaries drawing income from the system, is provided directly from current worker contributions.
Finally, Social Security is a regressive tax, since the tax rate drops as income rises. According to the U.S. Census Bureau, nearly 15% of the American population earned over $100,000 in 2002 (2003, p. 23). Thus, the top 15% of wage earners paid a smaller portion of their wages than the 85% of Americans in the lower and middle socioeconomic classes.
The Social Security Crisis
Much of this attention has been created because the Bush Administration has proposed to privatize portions of the social security program. Because, as outlined above, there are no underlying economic assets in the Social Security Trust Fund, the system’s solvency is dependent entirely on current receipts. Changes in demographics, including an earlier average retirement age, a longer average lifespan, and a large group of soon-to-be retired workers, the Baby Boom generation, have all contributed to a reduction in the ratio of workers to beneficiaries. In 1950, there were 16 workers paying into the system for each retiree drawing from it. This had fallen below 4 as of 2000 and continues to decline (Goldman Sachs, pp. 4, 11). As President Bush said in 2005, “instead of sixteen workers paying in for every beneficiary, right now it’s only about three workers. And over the next few decades that number will fall to just two workers per beneficiary. With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees” (C-SPAN, 2005).
It is estimated that the first shortfall will occur in 2018 (C-SPAN, 2005), “a day of reckoning, [when] retiree benefits will exceed payroll tax receipts” (Washington Post, 2005). Furthermore, because current surpluses are included in the unified budget, the decreasing surplus is contributing to growing deficits today. The deficits will have to be paid for through spending reductions, tax increases, or additional debt, all of which would have a contractual effect on gross domestic product over the medium and long term.
Proposed Solutions
President Bush has outlined a solution centered around the establishment of Personal Retirement Accounts. This is an opt-in program that would allow younger workers to allocate a portion of their payroll taxes to privately held retirement accounts. These accounts would be highly regulated and offer limited flexibility to the worker, but would nonetheless be separated from the general social security fund and thus unavailable to the unified budget. As a young worker myself, this sounds like a positive idea at first glance. However, from an economic perspective, this does nothing to resolve the underlying problem, the fact that the ratio of workers to beneficiaries is dropping. Privatization, in fact, exacerbates the problem, because the allocation of funds away from the current social security program means that there will be fewer dollars available for current beneficiaries.
Another point of controversy is the manner in which benefits increases occur. They are currently increased automatically based on the National Average Wage Index, as described above. This index tracks wages, not inflation, and should thus cause Social Security benefits to echo overall improvements in the nation’s standard of living. Due to expansionary economic growth, each successive generation should be better off than its predecessor. This means that, given a consistent worker-to-beneficiary ratio, it should be both possible and plausible to expand social security benefits indefinitely. Switching to a price-indexing model effectively maintains the standard of living at the time of the transition. While this seems trivial, it fundamentally alters the philosophy behind the Social Security program from a pension plan, where retirees receive benefits akin to the amount they paid into the program, to a form of welfare, guaranteeing only a basic level of support as defined at the time of transition. For example, if current benefits had been price-indexed at 1990 price levels, than basic services would not include any improvements in the standard of living since 1990, such as wireless communication or access to the internet. “Price indexing would preserve the purchasing power of Social Security benefits [at today’s levels], but these benefits would represent an ever-declining percentage of earnings before retirement” (Munnell & Soto, 2005, p.1).
One suggestion that is popular among politicians from the Democratic party is to actually exercise the Social Security Trust Fund. If it were possible to return the nearly two trillion dollars currently owed to the Trust Fund from the general federal budget, this would delay any shortfalls until 2042 according to Social Security trustees, or 2052 according to the Congressional Budget Office (Washington Post, 2005). This represents getting the general federal budget in order and generating a surplus annually to repay the debt to the trust fund. This is a very positive suggestion that would have a great deal of positive side effects. Increasing the national savings rate would tend to lower interest rates, spawning further business investment, increasing the aggregate supply curve. The improved growth would also tend to delay the 2042 day of reckoning, since the estimate includes a relatively anemic annual growth in gross domestic product of only 1.8% (Washington Post, 2005). This would certainly alleviate the crisis in the immediate term. Still, the fundamental issue of a decreasing worker-to-beneficiary ratio would remain.
Conclusion
The 1983 Amendments to Social Security were inappropriate. The solvency of the Social Security system was not in serious jeopardy and the hike in payroll taxes was used to hide lack of fiscal responsibility in the general federal budget at the time. “In 1983, Congress knew that new revenue would be used to reduce the budget deficit, not saved to fund future obligations. But when the time came to pay back Social Security, it was understood that the burden would be shared by taxpayers and the government at large” (Washington Post, 2005).
I believe that social security is a worthwhile institution that works relatively well and needs only minor updating. The simple, hard truth is that the worker-to-beneficiary ratio needs to be increased back to a manageable level. From 1950 to 1997, the average life expectancy at birth for both genders was 68.1. The same figure in 1997 was 76.5, an improvement of over eight years (Moody, 2006). This would imply that a similar increase in retirement age over time is appropriate. In 1950, the worker-to-beneficiary ratio was 16 to 1, and the payroll tax was 3%. Benefits, such as a provision for early retirement and disability benefits, were added throughout the 50s, and the tax was steadily increased to 6% by 1961 (Wikipedia, 2006).
Setting aside the political difficulties of implementation, I propose the following changes. First, the unified budget should be dissolved. Legislators cannot be allowed to raid the coffers of our national pension system to cover up their own inability to manage a budget. In return, the federal government should be forgiven the nearly two trillion dollars they’ve already stolen from the pension fund. The American people were lied to in 1983, but that’s water under the bridge at this point, and there are enough fiscal difficulties that will be created by the removal of the Social Security surplus from the budget as it is.
Secondly, the retirement age should be shifted upwards to increase the worker-to-beneficiary ratio. This is difficult politically, but it addresses the problem directly and definitively. A sliding scale retirement age, with congruent benefits definitions for early retirees, should be implemented. Including the number of years worked in this formula also seems like a fair stipulation that would partially make up for the regressive nature of payroll taxes. For example, a worker with little education who began working and contributing to the system at 16 should certainly be entitled to withdraw benefits earlier than a privileged, highly educated citizen who delayed entering the workforce until the age of 30. Not only does the lower-skilled worker have a shorter life expectancy, but more has been contributed to the system relative to the benefits ultimately received, since benefits are based on 35 years of work history.
Finally, payroll taxes should be lowered to match the reduced benefit liabilities. This would provide a stimulus to the economy and encourage spending. A baseline Trust Fund reserve should be immediately established through the issuance of bonds. The payroll tax should then be lowered to a break-even point, including the interest and modest repayments on these new bonds. A drop in payroll taxes would immediately provide economic stimulus. Savings passed on to workers would spawn additional consumption and increase the aggregate demand curve. Savings passed on to employers would spawn additional investment, increasing the aggregate supply curve (Tucker, 2004, pp.284-293).
Both Keynesian and supply-side ideologists should be pleased by this proposal. The additional growth would also help reduce the impact the removal of social security surplus receipts would have on the general budget.
by JOHNNY FUERY
Works Cited
C-SPAN. (February 2, 2005.) State of the Union 2005 Transcript. National Cable Satellite Corporation. Retrieved from http://www.c-span.org/executive/transcript.asp?cat=current_event&code=bush_admin&year=2005 on April 22, 2006
Goldman Sachs. (July 31, 2005.) Global Aging – Capital Market Implications. Goldman, Sachs, & Co. Retrieved from http://www.ced.uab.es/jperez/PDFs/GoldmanSachs.pdf on April 21, 2006.
Munnell, Alicia & Soto, Mauricio. (2005.) What Does Price Indexing Mean for Social Security Benefits? Trustees of Boston College, Center for Retirement Research. Retrieved from http://www.bc.edu/centers/crr/facts/jtf_14.pdf on April 20, 2006.
Moody, Errold F. (2006.) Life Expectancy Tables from the National Vital Statistics System. Errold F. Moody. Retrieved from http://www.efmoody.com/estate/lifeexpectancy.html on April 22, 2006.
Social Security Online. (October 14, 2005.) Automatic Increases: The Contribution and Benefit Base (2005). The Social Security Administration. Retrieved from http://www.ssa.gov/OACT/COLA/cbb.html on April 21, 2006.
Social Security Online. (February 7, 2006.) Actuarial Publications: Trust Fund Data (2006). The Social Security Administration. Retrieved from http://www.ssa.gov/OACT/STATS/table4a3.html on April 21, 2006.
Social Security Online. (March 23, 2005.) Actuarial Publications: Status of the Social Security and Medicare Programs (2005). The Social Security Administration. Retrieved from http://www.ssa.gov/OACT/TRSUM/trsummary.html on April 21, 2006.
Tucker, Irwin B. Survey of Economics (4th ed.). Mason, Ohio: South-Western, 2004.
US Census Bureau. (September, 2003.) Income in the United States: 2002. U.S. Department of Commerce. Retrieved from http://www.census.gov/prod/2003pubs/p60-221.pdf on April 20, 2006
Washington Post, The. (January 2, 2005.) Revamping Social Security: Experts Disagree on Severity of Shortfall’s Consequences. The Washington Post. Retrieved from http://www.washingtonpost.com/wp-dyn/articles/A41423-2005Jan1.html on April 21, 2006
Wikipedia (April 22, 2006.) Social Security (United States). Wikipedia, the Free Encylopedia. http://en.wikipedia.org/wiki/Social_Security_(United_States) on April 22, 2006.
About the Author
Johnny Fuery is a technologist, real estate investor, and occasional author. He commonly opines, advises, and whines on these topics at fuery.com.
This article is © 2006 by Johnny Fuery Originally published at fuery.com on 5/2006. This article is freely distributable provided this notice remains.
Related Articles - Social Security, Baby Boomers, entitlement programs, government pension system, government, politics, economics, investing for the future, government,
Saturday 14 July 2007
The State of Canada
The State of Canada Before The Next Federal Elections by ROY WHYTE
Ask yourself this question – are you happy with Canada as it stands right now? If you answered no, don’t worry you are in the majority. The reasons vary, but the underlying feeling is pretty much the same.
To get positive result changes, we must identify and expose the weaknesses and segments that have gone rotten.
To begin, let us look at where we came from.
Starting with the Second World War, Canada saw its position in the world propelled forward through the horrors and tribulations of total war. Little Canada grew up in that period and those that lived through that time took the initiative and kept on going.
Canada in the immediate post-war period saw tremendous social change. Soldiers returning from the war, and those that fueled the war machine at home, wanted to ensure that they really did put their lives and effort on the line for more than the freedom of others. They all wanted to see their blood, toil and sweat pay off here at home as well.
Our national industrial base and capacity was greatly expanded due to the war effort. Our farms were maximized and other resource-based industries were brought to full speed. Our ability to play with the big boys had come.
But it was not only what we were capable of doing with our hands that had changed, our attitudes about government and our society had also changed. Canadians came to realize that forging ahead with social change was something that was not only attainable, but also desirable. It was with that prevailing thought that the new Canada was born.
Social ideals and movements were no longer dirty words or bad ideas. The CCF more than proved this and the foundations of our social systems were born. Scare mongering on behalf of the elite did not succeed.
The Canadian people came to realize that the Canada they sought to obtain for themselves, their families and the future generations of Canadians should be based on a social system. It was a system that was compassionate and inclusive. Government had a new role to play, and Canadians were more than willing to be a part of that new expanded role. Governments now had a central role to play in Canadian lives.
Social systems were expanded and employee unions grew in strength and numbers. The Canadian economy grew rapidly to match those strides. The Canadian dream in many ways had become the envy of the world. Many post-war immigrants put Canada at the top of their wish lists. Canada by the mid 1970’s was the premier middle power.
It seemed Canada could do no wrong.
But… the wheels eventually fell off.
With the post-war period of growth came new ideas and new ways of looking at the present scope of economic events. At the heart of these new ideas was the notion of ‘free markets’. Increasingly, the wealthy and powerful in Canada and elsewhere were coming to believe that governments had grown too big and had become too wasteful.
Combined with that general feeling was a sense that corporations and the ultra wealthy were overtaxed and overly burdened by the burgeoning social system, which Canadians had come to enjoy and actually depend upon.
At the core of this new mantra was the adoption of the ideas of Milton Friedman. Instead of using our own bank – the Bank of Canada – to finance our needs, we acquiesced our economic sovereignty to a handful of private banks. Instantly we saw our manageable national debt explode into what we see today – over $500 billion owing with no end in sight of the interest payments due.
Couple the abandoning of our own bank with a constant march of tax cuts for the rich and corporations at the expense of the entire system, we saw the inevitable curtailing of what Canadians had worked so hard to build. Our national social system was now enemy number one, and still is today to those that preach ‘free market’ fundamentalism.
Groups like the Fraser Institute, the C.C.C.E., and the C.D. Howe Institute have all but declared war on what Canadians have worked so hard to create. To many traveling in those circles, social institutions and pubic entities are just added waste to be trimmed so others may reap the benefit. With that is the idea that governments are not to be central to social planning, but instead private institutions are to take over and take place of democratically elected officials.
Corporations now benefit from yearly record profits while our social system collapses around it. In its place are public entities turned private for profit. This panacea was the solution put forward by the few for the many. Thing is, it has not worked as advertised.
Although, increasingly, those that have pushed these ideas onto Canadians have refused to see the obvious, so they continue to push for more of the same in the insane hope that in the end it will all work out. Like an addicted gambler they are always betting that the next spin of the reel will be the winning spin.
To return Canada to its former glory we must turn back the clock. Rarely is this ever an answer for anything in life, but this is one of those times when exceptions count in the final formula. By once again utilizing the Bank of Canada and moving away from the all out ‘free market’ craze we can return Canada to its rightful place as the premier middle power that was respected and looked at as a world leader.
Sadly, if this does not happen we can lump ourselves in with the other failed experiments throughout history.
Roy Whyte writes for the Canadian Federal Politics Journal and Canada's Body Beautiful Health News
Ask yourself this question – are you happy with Canada as it stands right now? If you answered no, don’t worry you are in the majority. The reasons vary, but the underlying feeling is pretty much the same.
To get positive result changes, we must identify and expose the weaknesses and segments that have gone rotten.
To begin, let us look at where we came from.
Starting with the Second World War, Canada saw its position in the world propelled forward through the horrors and tribulations of total war. Little Canada grew up in that period and those that lived through that time took the initiative and kept on going.
Canada in the immediate post-war period saw tremendous social change. Soldiers returning from the war, and those that fueled the war machine at home, wanted to ensure that they really did put their lives and effort on the line for more than the freedom of others. They all wanted to see their blood, toil and sweat pay off here at home as well.
Our national industrial base and capacity was greatly expanded due to the war effort. Our farms were maximized and other resource-based industries were brought to full speed. Our ability to play with the big boys had come.
But it was not only what we were capable of doing with our hands that had changed, our attitudes about government and our society had also changed. Canadians came to realize that forging ahead with social change was something that was not only attainable, but also desirable. It was with that prevailing thought that the new Canada was born.
Social ideals and movements were no longer dirty words or bad ideas. The CCF more than proved this and the foundations of our social systems were born. Scare mongering on behalf of the elite did not succeed.
The Canadian people came to realize that the Canada they sought to obtain for themselves, their families and the future generations of Canadians should be based on a social system. It was a system that was compassionate and inclusive. Government had a new role to play, and Canadians were more than willing to be a part of that new expanded role. Governments now had a central role to play in Canadian lives.
Social systems were expanded and employee unions grew in strength and numbers. The Canadian economy grew rapidly to match those strides. The Canadian dream in many ways had become the envy of the world. Many post-war immigrants put Canada at the top of their wish lists. Canada by the mid 1970’s was the premier middle power.
It seemed Canada could do no wrong.
But… the wheels eventually fell off.
With the post-war period of growth came new ideas and new ways of looking at the present scope of economic events. At the heart of these new ideas was the notion of ‘free markets’. Increasingly, the wealthy and powerful in Canada and elsewhere were coming to believe that governments had grown too big and had become too wasteful.
Combined with that general feeling was a sense that corporations and the ultra wealthy were overtaxed and overly burdened by the burgeoning social system, which Canadians had come to enjoy and actually depend upon.
At the core of this new mantra was the adoption of the ideas of Milton Friedman. Instead of using our own bank – the Bank of Canada – to finance our needs, we acquiesced our economic sovereignty to a handful of private banks. Instantly we saw our manageable national debt explode into what we see today – over $500 billion owing with no end in sight of the interest payments due.
Couple the abandoning of our own bank with a constant march of tax cuts for the rich and corporations at the expense of the entire system, we saw the inevitable curtailing of what Canadians had worked so hard to build. Our national social system was now enemy number one, and still is today to those that preach ‘free market’ fundamentalism.
Groups like the Fraser Institute, the C.C.C.E., and the C.D. Howe Institute have all but declared war on what Canadians have worked so hard to create. To many traveling in those circles, social institutions and pubic entities are just added waste to be trimmed so others may reap the benefit. With that is the idea that governments are not to be central to social planning, but instead private institutions are to take over and take place of democratically elected officials.
Corporations now benefit from yearly record profits while our social system collapses around it. In its place are public entities turned private for profit. This panacea was the solution put forward by the few for the many. Thing is, it has not worked as advertised.
Although, increasingly, those that have pushed these ideas onto Canadians have refused to see the obvious, so they continue to push for more of the same in the insane hope that in the end it will all work out. Like an addicted gambler they are always betting that the next spin of the reel will be the winning spin.
To return Canada to its former glory we must turn back the clock. Rarely is this ever an answer for anything in life, but this is one of those times when exceptions count in the final formula. By once again utilizing the Bank of Canada and moving away from the all out ‘free market’ craze we can return Canada to its rightful place as the premier middle power that was respected and looked at as a world leader.
Sadly, if this does not happen we can lump ourselves in with the other failed experiments throughout history.
Roy Whyte writes for the Canadian Federal Politics Journal and Canada's Body Beautiful Health News
Sunday 1 July 2007
Protect yourselves now
We should all be protecting ourselves now against the meltdown of the financial system.
How do we do it?
For most of the worlds population that are not rich is to pay off your loans as soon as possible, so when the down turn comes you can live without worry or at least less of it.
Your house is your first priority to safeguard.
This is what I am currently doing with my life. Of course we have our own individual problems with loans and I am not indicating advice just for you but a general method of living within our means, IE don't spend more than we earn. If you do when the bad times come it will hurt you the most.
Don't trust governments to look after you that is a big mistake you must take control over your own affairs its the only way to secure your future.
How do we do it?
For most of the worlds population that are not rich is to pay off your loans as soon as possible, so when the down turn comes you can live without worry or at least less of it.
Your house is your first priority to safeguard.
This is what I am currently doing with my life. Of course we have our own individual problems with loans and I am not indicating advice just for you but a general method of living within our means, IE don't spend more than we earn. If you do when the bad times come it will hurt you the most.
Don't trust governments to look after you that is a big mistake you must take control over your own affairs its the only way to secure your future.
Thursday 21 June 2007
Governments race to devalue there Currencies
The Russian central bank is increasing its money supply at an amazing 57%.
The U.S is increasing its money supply by 14% per year.
It seems there's a real race going on between the 2 super powers on who can devalue there currency the quickest and do the most damage.
I think the only winner in this competition is the manufactures of printing presses they must be doing a roaring trade and of course the paper mills.
The U.S is increasing its money supply by 14% per year.
It seems there's a real race going on between the 2 super powers on who can devalue there currency the quickest and do the most damage.
I think the only winner in this competition is the manufactures of printing presses they must be doing a roaring trade and of course the paper mills.
Thursday 7 June 2007
China's wealth
The people's Bank of China now has the biggest pile of dollars in the world 1 Trillion of them.
Now they have a problem, what do they do with them. If the dollar continues its decline in value by the U.S printing presses working overtime to produce more of them, it does not sound like a good idea to keep hold of dollars to long.
The answer lies in buying the best protection possible in a troubled world and thats good old GOLD.
Now they have a problem, what do they do with them. If the dollar continues its decline in value by the U.S printing presses working overtime to produce more of them, it does not sound like a good idea to keep hold of dollars to long.
The answer lies in buying the best protection possible in a troubled world and thats good old GOLD.
Saturday 2 June 2007
Why Do we Follow Politicians Advice
I have tried to find a reason why we ordinary people follow politicians advice and as yet I cannot find one.
Maybe You the readers can give me one.
Politicians all over the world love to control the people that have put them in power. In the U.K ten years ago the politicians told the guy on the street that crime was getting out of hand and they needed to employ a high tech solution to the problem. This solution was to fit Closed circuit television cameras all over the country. Money was no object to getting them put up and with the help of the media whipping up a frenzy over crime. At this point the people where demanding to have the camera's fitted and lobbied there government ministers to be the first. This was music to the politicians ears and up they went.
Now 10 years on and we are the most monitored country in the world, we have 20% of all the worlds Camera's. They are everywhere.
They are now even building them into the cats eye's in the centre of the road to record cars that are speeding.
But you might be saying think of the benefits of such a monitored country. Well crime has risen and the jails are overflowing, with the highest recorded number of criminals ever. Now even the people who wanted them started to ask questions. So what do the politicians do but to find a new threat, Terrorism.
With this new more deadly threat announced to the people the media came on board with lots of different possible attacks pending, fear was created and the media made lots of money.
We are then told that to reduce the threat we need a better solution to getting information and that's digital camera's so they began to add extra camera's with the New smart technology that allowed there computer systems to track people using facial recognition across a town or city.
Now with all this technology being sent out onto our streets how come drug dealers still operate on our street corners and mugging still takes place in our big cities and drive by shootings take place when everything is recorded.
It certainly makes me think what the real use of this equipment is.
Maybe You the readers can give me one.
Politicians all over the world love to control the people that have put them in power. In the U.K ten years ago the politicians told the guy on the street that crime was getting out of hand and they needed to employ a high tech solution to the problem. This solution was to fit Closed circuit television cameras all over the country. Money was no object to getting them put up and with the help of the media whipping up a frenzy over crime. At this point the people where demanding to have the camera's fitted and lobbied there government ministers to be the first. This was music to the politicians ears and up they went.
Now 10 years on and we are the most monitored country in the world, we have 20% of all the worlds Camera's. They are everywhere.
They are now even building them into the cats eye's in the centre of the road to record cars that are speeding.
But you might be saying think of the benefits of such a monitored country. Well crime has risen and the jails are overflowing, with the highest recorded number of criminals ever. Now even the people who wanted them started to ask questions. So what do the politicians do but to find a new threat, Terrorism.
With this new more deadly threat announced to the people the media came on board with lots of different possible attacks pending, fear was created and the media made lots of money.
We are then told that to reduce the threat we need a better solution to getting information and that's digital camera's so they began to add extra camera's with the New smart technology that allowed there computer systems to track people using facial recognition across a town or city.
Now with all this technology being sent out onto our streets how come drug dealers still operate on our street corners and mugging still takes place in our big cities and drive by shootings take place when everything is recorded.
It certainly makes me think what the real use of this equipment is.
Thursday 17 May 2007
China's Financial Impact
When people ask me why do I beleive a crash is coming its hard to tell them the truth because most of the time they want to be told everything is fine and your living standards will keep improving. They would like me to say its great that you have moved into your big new house complete with a 50 year mortage, its no problem.
They want to be happy and secure in that belief that nothings wrong.
The government politicials keep telling them its fine nothing to worry about. What lies they tell to keep you in the dark.
I still believe China will be the key player of the next decade because they are cash rich. There vast foreigh curreny reserves are now rising at an annual rate of $500 billion dollars a year.This is at a time when the West is going in the opposite direction.
They want to be happy and secure in that belief that nothings wrong.
The government politicials keep telling them its fine nothing to worry about. What lies they tell to keep you in the dark.
I still believe China will be the key player of the next decade because they are cash rich. There vast foreigh curreny reserves are now rising at an annual rate of $500 billion dollars a year.This is at a time when the West is going in the opposite direction.
Tuesday 15 May 2007
The Property Bubble continues
Where will this bubble take us. Further and further into a black hole. I wish people paying these record high prices would stand back and ask the question is this property that we are looking at worth years and years of slaving away at work, working longer and longer hours and for more years than ever.
It is not realistic to sign up for a 40 year mortgage, even if you are 25 years old your be an old man before your loans are paid.
Be patient the prices will correct themselves in time.
This advice also applies to the U.S housing market.
It is not realistic to sign up for a 40 year mortgage, even if you are 25 years old your be an old man before your loans are paid.
Be patient the prices will correct themselves in time.
This advice also applies to the U.S housing market.
Wednesday 2 May 2007
The U.k already suffers from water shortages
Drinking water is already in short supply in the south of England with every year suffering hose pipe bans drought orders. Already this year on the 2nd of May my garden is very dry with cracks appearing every where with no rain in sight.
Many people keep asking the water companies why don't we desalinate sea water, and the answer is cost £££££.
It costs 9 times more to process sea water than using river or underground supplies. Who is perpared to pay such an increase.
Also the electricity generating companies could not keep up with demand if we elected to go down this route.
Many people keep asking the water companies why don't we desalinate sea water, and the answer is cost £££££.
It costs 9 times more to process sea water than using river or underground supplies. Who is perpared to pay such an increase.
Also the electricity generating companies could not keep up with demand if we elected to go down this route.
Thursday 12 April 2007
The U.S Wars Resource Wars part 2
Drinking Water Why We should Be worried
Hi guy's,
I thought that the resource wars was such a big issue that I would break it down into 2 parts, so here goes the second section.
The coming new resource to fight over will be Fresh Water, yes that's right fresh water not oil. Now everybody must be thinking he's gone mad I can turn my tap and out comes lovely drinkable water. That's now in 2007, turn the clock forward 10 years and it will be a different picture.
Only 3 percent of the worlds water is fresh non salty and 2 percent of that is locked up in the polar ice caps leaving 1 percent for us. The problem is the worlds population is rising at such a fast rate especially in India and China that there will not be enough drinking water to go around.
Already China employs 30,000 people to make rain. They use rockets fired from the ground and aeroplanes, both to seed the clouds passing over there country to make rain.
The problem with this issue is they are taking rain from falling somewhere else. Now if its out to sea there's no harm done but if it was meant to fall on a another country that was also suffering drought then a conflict could occur.
China already has a drought and 300 million Chinese have no access to fresh drinking water and are suffering with poor health.
Still its not a problem we can desalinate sea water to drink and create pipelines to supply inland. This would require a massive energy shift to free up enough power to supply these new desalination stations and then be able to pump this water inland.
Global warming springs to mind. President Kennedy stated in 1961 that whoever can extract fresh water from the sea without using massive amount of energy will create the biggest break through for mankind.
Sadly I think that Government politics are some way off achieving that goal, because the industrialised world has not bothered to look at the future requirements of mankind but forcus on short term visions.
Hi guy's,
I thought that the resource wars was such a big issue that I would break it down into 2 parts, so here goes the second section.
The coming new resource to fight over will be Fresh Water, yes that's right fresh water not oil. Now everybody must be thinking he's gone mad I can turn my tap and out comes lovely drinkable water. That's now in 2007, turn the clock forward 10 years and it will be a different picture.
Only 3 percent of the worlds water is fresh non salty and 2 percent of that is locked up in the polar ice caps leaving 1 percent for us. The problem is the worlds population is rising at such a fast rate especially in India and China that there will not be enough drinking water to go around.
Already China employs 30,000 people to make rain. They use rockets fired from the ground and aeroplanes, both to seed the clouds passing over there country to make rain.
The problem with this issue is they are taking rain from falling somewhere else. Now if its out to sea there's no harm done but if it was meant to fall on a another country that was also suffering drought then a conflict could occur.
China already has a drought and 300 million Chinese have no access to fresh drinking water and are suffering with poor health.
Still its not a problem we can desalinate sea water to drink and create pipelines to supply inland. This would require a massive energy shift to free up enough power to supply these new desalination stations and then be able to pump this water inland.
Global warming springs to mind. President Kennedy stated in 1961 that whoever can extract fresh water from the sea without using massive amount of energy will create the biggest break through for mankind.
Sadly I think that Government politics are some way off achieving that goal, because the industrialised world has not bothered to look at the future requirements of mankind but forcus on short term visions.
Wednesday 11 April 2007
Oil currency
More Oil producing countries around the world will refused to accept U.S dollars as payment for there oil. This process will acelerate the devaluation of the dollar. Some countries already have changed to euro's to protect there investments.
Monday 9 April 2007
The U.S Resources Wars
Future American governments will have to place a greater emphasise on its Oil, gas and even fresh water supplies than previous administrations. Now I no America has always looked after its interests above everything else, but the coming years will see military conflict around the globe fighting over precious resources.
The U.S will have no option but to use its military might either as a veiled threat or in direct action to secure its supplies.
The problem with taking this action for the U.S will be the lack of finance to fund a large conflict. As we are seeing in Iraq the cost of 2 years occupation fighting a guerrilla war is mind bogging $200 billion for the first year alone.
People might say what's difference from the previous wars, well America's main creditors ie China and Japan will be the countries that the U.S will be up against in its race to secure the resources it needs. These will have a big stick to hit America, which has been handed to them by the U.S government.
Any conflict that the U.S is engaged with can only last 3 months because the U.S strategic reserve can only last that long. So this is there time frame for any military action to start and finish.
The U.S will have no option but to use its military might either as a veiled threat or in direct action to secure its supplies.
The problem with taking this action for the U.S will be the lack of finance to fund a large conflict. As we are seeing in Iraq the cost of 2 years occupation fighting a guerrilla war is mind bogging $200 billion for the first year alone.
People might say what's difference from the previous wars, well America's main creditors ie China and Japan will be the countries that the U.S will be up against in its race to secure the resources it needs. These will have a big stick to hit America, which has been handed to them by the U.S government.
Any conflict that the U.S is engaged with can only last 3 months because the U.S strategic reserve can only last that long. So this is there time frame for any military action to start and finish.
Friday 6 April 2007
Oil Production Peaking
Oil production will peak this year, that means the world can no longer increase consumption which China and India are currently doing. Something has to give in a free market which usually means higher prices hence oil at $70 a barrel which will rise to $100 in the coming years.
The U.S has for too long consumed more than its fair share of the precious black gold found deep under ground, to power its gas guzzling motor cars. What a waste of a precious natural resource this has been for the human race and the planet.
Future generations will look back at the greed the U.S politics have had when squandering a natural asset that cannot be replaced and the conflict and wars that have been created in the past and the future just to power there waste full life styles.
The U.S has for too long consumed more than its fair share of the precious black gold found deep under ground, to power its gas guzzling motor cars. What a waste of a precious natural resource this has been for the human race and the planet.
Future generations will look back at the greed the U.S politics have had when squandering a natural asset that cannot be replaced and the conflict and wars that have been created in the past and the future just to power there waste full life styles.
Saturday 31 March 2007
Goverment politics destroy Global economy
Global economic Meltdown
We are entering a global economic meltdown started by the American governments desire to spend more than they earn year after year. The government politics being played out in America are destroying the foundations of there great country.
This year will see the Asian governments stop buying U.S government bonds, which will create a currency crisis in the dollar.
The U.S housing market will have a down turn causing wide spread repossessions as interest rates rise to support the dollar.
All of these problems have been caused by the U.S government's political decision to have an economy based on easy money, and ignoring the real issues affecting there economy.
The American government decided to mount 2 wars that are very expensive and had to be financed so they took the easy way to pay by printing money and lots of it, and when that was spent they would print some more. Then to hide the facts they stop disclosing the monthly money supply figures so nobody had any way of calculating how much extra cash they printed last month. Its a neat trick but it is devaluing the value of the dollar every month.
Every time the U.S Navy, is sent off on a mission there ships are powered by I.O.U’s from the main Asian governments and banks. In fact Americans war effort is funded mainly by China and Japan which are overflowing by American debts. This makes the U.S very weak and open to pressure from its bankers.
The European Union is also in a mess but not as bad as the U.S. There problems have also been caused by printing money to pay the bills. They have increased there money supply by an average of 8% this year.
The United Kingdom will suffer the biggest housing slump in Europe in the very near future, probably late this year. When this massive property bubble bursts it will affect all aspects of the U.K’s finances causing great hardship to the ordinary people. The average house in the U.K is now over 6 times the average wage, this cannot be supported for very long.
I believe the coming economic Global meltdown will cause the price of gold to rise to over $1000 per oz. this is the standard safety net that the rich will run to when the collapse occurs.
Why the U.S government believes it can continue to print money without being able to pay it back is completely mad.
To add to the problems they are losing ground in the there leadership in technology.
For many years the U.S has dominated the world in inventing new products, creating advanced manufacturing systems and applying for international patents. All of this supremacy is now being challenged by the up and coming third world countries, that are not heavily in debt. This view is reinforced by the recent world economic forum stating that the U.S has slipped down the global league table for world primary engine technology. This is a very important indicator that the American economy no longer has leadership in new cutting edge technology which has been used in the passed to drive there economy forward and stay ahead of there competitors
We have seen many industries such as aerospace where for decades the U.S has lead market with Boeing producing the largest slice of all the civil aircraft orders, but are now very much under attack from the European aerospace company.
The next crazy thing that happened, to cause this global meltdown was the transference of technology from the west to the east. This transfer of power was not done by governments it was carried out by big multinational companies. The Chinese quickly learnt all they could from there new friends and after 15 years are now moving into a position to challenge the west. More and more patents are being applied for from china and India, we have helped them industrialise and will now suffer the costs of doing so.
Every ordinarily citizen should be concerned because in the west we have become very lazy and have expected a continuing improvement in living standards. In the third world the workers powering there economies are used to working long hours in bad conditions for low pay, so they are ideally suited for western companies to exploit to generate higher profits.
We are entering a global economic meltdown started by the American governments desire to spend more than they earn year after year. The government politics being played out in America are destroying the foundations of there great country.
This year will see the Asian governments stop buying U.S government bonds, which will create a currency crisis in the dollar.
The U.S housing market will have a down turn causing wide spread repossessions as interest rates rise to support the dollar.
All of these problems have been caused by the U.S government's political decision to have an economy based on easy money, and ignoring the real issues affecting there economy.
The American government decided to mount 2 wars that are very expensive and had to be financed so they took the easy way to pay by printing money and lots of it, and when that was spent they would print some more. Then to hide the facts they stop disclosing the monthly money supply figures so nobody had any way of calculating how much extra cash they printed last month. Its a neat trick but it is devaluing the value of the dollar every month.
Every time the U.S Navy, is sent off on a mission there ships are powered by I.O.U’s from the main Asian governments and banks. In fact Americans war effort is funded mainly by China and Japan which are overflowing by American debts. This makes the U.S very weak and open to pressure from its bankers.
The European Union is also in a mess but not as bad as the U.S. There problems have also been caused by printing money to pay the bills. They have increased there money supply by an average of 8% this year.
The United Kingdom will suffer the biggest housing slump in Europe in the very near future, probably late this year. When this massive property bubble bursts it will affect all aspects of the U.K’s finances causing great hardship to the ordinary people. The average house in the U.K is now over 6 times the average wage, this cannot be supported for very long.
I believe the coming economic Global meltdown will cause the price of gold to rise to over $1000 per oz. this is the standard safety net that the rich will run to when the collapse occurs.
Why the U.S government believes it can continue to print money without being able to pay it back is completely mad.
To add to the problems they are losing ground in the there leadership in technology.
For many years the U.S has dominated the world in inventing new products, creating advanced manufacturing systems and applying for international patents. All of this supremacy is now being challenged by the up and coming third world countries, that are not heavily in debt. This view is reinforced by the recent world economic forum stating that the U.S has slipped down the global league table for world primary engine technology. This is a very important indicator that the American economy no longer has leadership in new cutting edge technology which has been used in the passed to drive there economy forward and stay ahead of there competitors
We have seen many industries such as aerospace where for decades the U.S has lead market with Boeing producing the largest slice of all the civil aircraft orders, but are now very much under attack from the European aerospace company.
The next crazy thing that happened, to cause this global meltdown was the transference of technology from the west to the east. This transfer of power was not done by governments it was carried out by big multinational companies. The Chinese quickly learnt all they could from there new friends and after 15 years are now moving into a position to challenge the west. More and more patents are being applied for from china and India, we have helped them industrialise and will now suffer the costs of doing so.
Every ordinarily citizen should be concerned because in the west we have become very lazy and have expected a continuing improvement in living standards. In the third world the workers powering there economies are used to working long hours in bad conditions for low pay, so they are ideally suited for western companies to exploit to generate higher profits.
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