"David Allen" <
[email protected]> wrote in message
news:
[email protected]...
>
>
> I just don't buy it. Wall street didn't know he would be president until
> December. The slowdown was underway well before the election. Further,
> Wall St. has historically appreciated conservatives in much the same way
the
> military does. They're on the same page.
>
Wall Street doesen't give a **** about Republicans or Democrats.
The problems with the economy are much more basic and serious
than a simple business turndown.
Fundamentally, we have a big problem with Social Security and Medicare.
Simply put, the way the program is run now - paying for the retirees out
of the general fund, and having NO Social Security investment trust fund -
is utterly unsupportable over the long haul.
And, now we are totally ****ed because ever since Social Security
was instituted, people have been saving less for retirement. After all,
why should they save for retirement? SS will pay for it, and besides that,
the money they would have been putting away for retirement has gone to SS
taxes.
There's really only one way out of it. Wall Street knows what it is, and
so do all the Presidents and party leaders. Simply put, the way out is to
NOT pay the retirees back even the principle of what they put into the
SS program, let alone the interest they should have gotten.
Now, obviously if the government just simply comes right out and tells
people this, there will be a revolution. So they have to do it more subtly.
The way this is being done is simply to devalue the currency, otherwise
known as inflation. Basically you just print up a bunch of money and
give it to the retirees, and by the time they notice that the dollars your
paying them aren't worth **** compared to the dollars they paid you,
they are dead. (and the smart ones that notice this early will just simply
not retire, they will continue to work)
Now people aren't total dim bulbs so you can't just go publishing high
inflation figures any more than you can tell them that they aren't going
to get the value they put into SS back. So the government hides the
true rate of inflation by redefining how inflation is calculated. The
government also makes subtle adjustments in the economy to create
"targeted" inflation.
For example, take mortgage interest rates. If you drop mortgage
interest rates, you create a lot of housing demand from people who
are already in homes. They sell and buy new homes, other people
buy theirs, etc. It's a big money circle and every time it goes around,
housing prices go up. Thus, if you can run 20% inflation in housing
prices alone, and 1% inflation in everything else, you can claim to the
ignorant that the inflation rate is only 1%.
And of course since local government funding is usually tied to property
taxes, if you can get housing prices jacked up, the local governments
can raise assessed value of property, and thus rake in more taxes. In
short, it's a tax increase that occurs without an actual percentage change
on the bill.
Anyway, all these games have been enough to keep SS balanced so
far, but we are coming up on a serious bulge of retirees in the next
10 years. So Bush has to start running big budget deficits now. Those
big deficits cause the government to borrow big money from the
investment community, which then allows the government later on to
owe giant amounts of interest. What you will see is that when all the
retirees start drawing SS, the government will start printing up a ton
of money and using it to pay all that interest
back - that will flood a bunch of extra money into the economy, which
will devalue the currency, thus your tax revenues go way up in dollar
figures (because the inflation this causes raises the dollar figures of
everything) and as soon as the actual inflation (as opposed to the
"reported" inflation figures) exceeds the SS COLA, then bam-
your able to pay the retirees.
It makes no difference that the money the retirees get off SS is going
to only be enough to allow them to buy tins of cat food for dinner,
the government won't be liable because they will have met the "letter"
of the SS guarentee.
> > I used to think that he should come out and at least rally the country
> > on the economy. Then I checked the stats and found out that every
> > day he came out to speak, Wall Street went short. Some folks made
> > a good pile of money anticipating that. "Selling the President short"
> > is now part of the nomenclature there.
> >
>
> I don't buy this either. There's no emnity between Bush and Wall Street.
> And whether investors like what he says on any particular day or not only
> points out the different jobs they have.
> Bush is one of the most
> disciplined and principled Presidents we've ever had. The principles he
> holds to are sound and promise to take us where we need to be as a
country.
This is very true. It takes someone very disciplined to understand exactly
what he's doing to SS and still go through with it.
> He doesn't believe in cheap gimmickery
>
He may not but his party still is run by the folks that ran that Monica
Lewinsky sideshow, and that was cheap gimmickery if there ever
was gimmickery. At least though, they did finally get rid of Trent Lot
and Newt.
>
> I hope you didn't miss the sarcasm. Also, I'll give Clinton credit for
> practicing fiscal conservatism. Combined with a period of growth, the
> result can be... well.... Reagan-like. Reagan couldn't get fiscal
> conservatism with his Congress, but it was HIS policy. It's what he ran
on.
> Cut taxes, cut spending.
>
Clinton did a lot of economic damage that Bush is repairing. Fundamentally
Clinton did not have the stomach to set up what is going to be the biggest
ass-screwing of the Baby Boomers once they all retire and find out their SS
benefits are worthless. If Clinton and his policies were in office 15 years
from now, there would be no targeted high inflation rate, no way to pay back
the
SS holders. Instead the country would just have to declare bankruptcy.
Ted
