Zero Hedge — Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard

This is not a joke. He really means it.

If the world listened to his advice, it would result in a Great Great Depression. aka the grandmother of all depressions.

Zero Hedge
Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard
Tyler Durden

Here's why bull market in stocks and economic expansion guaranteed for next 20 years

There's only one statistic that you need to know to in order to understand what the outlook is for the economy and the stock market for the next 20 years and it's not how big the deficit is,

It's the fact that for the next 20 years 10,000 baby-boomers PER DAY will be retiring and becoming eligible to receive Social Security, Medicare and Medicaid.

Those problems are already 42% of annual Federal spending. ($1.8 trillion out of $4.3 trillion.) However, they're just going to continue to grow and grow and grow for the next 20 years.

You know what that is? It's government guaranteed income support. Just like what they're proposing in Switzerland only maybe half. Still, it's something and in the aggregate, when you consider the numbers--tens of millions of people--it's a massive and ongoing fiscal transfer to the economy.

This is why this recovery has lasted longer without a recession than anyone predicted (other than us, here). And it's why stocks keep going up.

With those kind of guaranteed flows the companies in the S&P 500 can ALWAYS squeeze out their trillion and a half or trillion eight of earnings.

Bull market...next 20 years.

Note to Chris Christie and other "entitlement fixing" sociopaths. (That means you, too, Hillary.)

Christie came out the other day with this fucked-up "tough love" message about how we need to "fix" Social Security and how he's the man to do it. I presented my thoughts on that speech here. (BTW...Christie's state is in a shambles.)

Now a little lesson on why Social Security can never be "fixed" and repeating, for the umpteenth time, why it's not broken.

A tax is a tax. It is the removal of all or part of this income. Why should this be put on seniors and workers? It won't make Social Security more "secure." First of all it can never be insecure in a financial sense because the US government cannot run out of dollars. Greenspan explained that already to Paul Ryan in a video/post I have put up many times.

Secondly, all Social Security taxes flow into the Treasury's general account and are used for general expenditures. That's always how it has been. There is no "lockbox" like Al Gore once laughably told everyone. In fact, the government has no means whatsoever to "save" its own fiat. The whole notion is idiotic. Is the money stored up in some warehouse somewhere?

The fact of the matter is, any additional Social Security tax would a) hit workers the hardest and; b) just flow right into the Treasury's general account as it always has and be spent. Probably on war.

So, 10 years down the road they'd be saying we have to save Social Security...again. Then what? More taxes? Come on. Wake up. This is Wall Street wanting our tax dollars so it can play its casino games.

Must see TV!

I know this has been posted on the blog in the past, but I just had to do it again. It's so good!

Like Greenspan explains, it's not about the money. The gov't makes the money. There's always enough money to pay. It's about, do we have the real "stuff" (i.e. hospitals, food, medicine, doctors, nurses, housing, etc) to take care of seniors? And the answer is yes. And if we don't, then employ people NOW to create that stuff and pay them to do it. Did we have the "stuff" to fight WWII when we were attacked by the Japanese on Dec 7, 1941? Did we have teh money?? Well, we neither had the stuff nor the money, so we printed the money and built the stuff and succeeded spectacularly!

Ryan, the clueless little boy ideologue who read one book in his life, "Atlas Shrugged," by sociopath Ayn Rand. Listen to Greenspan school him, but it goes right over the little boy's head.

Steven Pearlstein — I am a job creator: A manifesto for the entitled

Sums it up.

The Washington Post | Business
I am a job creator: A manifesto for the entitled
Steven Pearlstein | Washington Post columnist and Robinson Professor of Political and International Affairs at George Mason University
(h/t Unknown in the comments)

Hey, Paul Ryan...we can't run out of money!

Hey, Paul Ryan...we can't run out of money. Dollars are created when the government spends and that's the only way they can be created, so there's no risk of not being able to "pay" for entitlements.

That's point number one.

Point number two is that Medicare is eminently sustainable so long as we have the real assets (hospitals, doctors, nurses, technicians, medicine, etc) for people to consume. The only possible way that Medicare could not be sustained is if these assets were unavailable for some reason and that is not the case. And by the way, Alan Greenspan schooled you on this a while back.

Paul Ryan will never wake up to these facts. He's a blind, ideologue. He's a little boy who read a book a long time ago and now has the crazy beliefs of that book deeply embedded in his mind.

The sad part is that the people of this country beleive him. They believe him because they have been brainwashed into believing all that hogwash about running out of money and "not being able to afford" Medicare, Medicaid and Social Security. These have been some of the most succesful social programs this country has ever seen and millions of Americans have been kept out of poverty thanks to them. Yet despite this, Ryan and the GOP want to do away with them for reasons that are both ideological and irrational.

The powers that be love Ryan. He's their handome and "brilliant" messenger. But when we have millions of sick and homeless, then and only then will we will feel the REAL cost to society. It will be a burden that dwarfs any purported burden we face now.

In Paul Ryan the GOP have chosen a plan, but is it a plan whose ultimate consequences they truly understand?

Matt Stoller — Obama’s Second Term Agenda: Cutting Social Security, Medicare, and/or Medicaid

This is probably the least important Presidential election since the 1950s. As an experienced political hand told me, the two candidates are speaking not to the voters, but to the big money. They hold the same views, pursue the same policies, and are backed by similar interests. Mitt Romney implemented Obamacare in Massachusetts, or Obama implemented Romneycare nationally. Both are pro-choice or anti-choice as political needs change, both tend to be hawkish on foreign policy, both favor tax cuts for businesses, and both believe deeply in a corrupt technocratic establishment.
So while the election lumbers on like the death rattles of the wounded animal known American democracy, no one on either side is asking what the plan is for the next term. For Obama, his team is going into rooms of donors and shouting “Supreme Court”, while mumbling something about bipartisanship and $4 trillion, or Simpson-Bowles. What this means is that term two of the Obama White House will be organized around cutting entitlements.

Read it at Naked Capitalism
Obama’s Second Term Agenda: Cutting Social Security, Medicare, and/or Medicaid
Matt Stoller, a political analyst on Brand X with Russell Brand, and a fellow at the Roosevelt Institute

Social Security is not insolvent. Here's why.

Social Security is not bankrupt. It can never go bankrupt. Here's why.

David Walker Invents Reverse IQ Test

Former US Beancounter-in-Chief David Walker was out today in the media rolling out a new "Fiscal IQ" test for the public and policymakers.  Related OpEd from Walker at Politico here.

It looks like this IQ test works in reverse to most normal IQ tests, in that with Walker's test here, the higher score you get, the less intelligent you are.

Here is a link to the online test.  (Where do these people get the funds to do this stuff?)

Interesting excerpt from his Question 9 here: "Health care is the one thing that could literally bankrupt America."  This does not square with his own assertion to Mike from months ago that "there is no solvency issue" with regards to the US government finances.

TIP:  Go back to counting your beans David, and leave macro policy recommendations to those who know how a Free Floating Non-convertable currency system operates.

Important Message on Social Security and Medicare

Stephanie Kelton reveals why there is no "entitlement problem" in 4 Trust Fund[s], 3 Problems: Why is the Other one so "Healthy"?

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"Every year, the Trustees of Social Security and Medicare issue an annual report that examines the financial status of the various "trust funds" that purportedly sustain these vital programs. Social Security's (OASI) and (DI) Trust Funds, as well as Medicare's (HI) Trust Fund all face chronic problems, some in the not-too-distant future. In contrast, Medicare's (SMI) Trust Fund always receives a clean bill of health. Why is that?

"The answer is so simple it apparently escapes notice, but here it is, straight from the annual report:

"Part B of Supplemental Medical Insurance (SMI), which pays for doctors' bills and other outpatient expenses, and Part D, which pays for access to prescription drug coverage, are both projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet the next year's expected costs.

In other words, it is sustainable -- INDEFINITELY -- because the government is committed to making the payments. Indefinitely.

"And, as we have argued many times on this site (and elsewhere), the same commitment can easily be made to sustain Social Security (OASDI) and Medicare (HI) in their current form. There is no economic justification for cuts to either program. The decision is entirely political.

"The American people must realize this before it is too late."

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Pass it on.