They already print plenty of money. We already have plenty of inflation. The government doesn't want to turn off the presses so they stopped reporting M3. They don't want to raise interest rates so they claim their own measurements are wrong.
This is just the latest example of how inflation is "overstated." They have already taken out items that were in previous measures like... housing.
I have no doubt that hyperinflation or even very high inflation is devastating to the economy. The thread is titled retirement implosion for a reason. Governments don't try to create hyperinflation. They just keep running the presses a bit more, borrowing a bit more, lying and fiddling with the data a bit more until...opps. The currency is destroyed.
There isn't a way to fix the boomer retirement problem. They spent more, indebted themselves and the nation more, saved less and promised themselves more benefits than any generation in history. Massive wealth has been squandered and the generations that follow have had less investment, have had to take on more debt and is also much smaller population-wise but somehow are required to "solve" the problem their parents never took on and also pay for their parent's mistakes in terms of national debt and repayment of social security "bonds" that must be repaid just to keep the already bankrupt system "solvent" for the few years it will be.
The printing of money will meet the paper claims. It will lay waste to the economy but then so will default so the choices are pretty much the same. Only in the inflation scenario those still working and running on the treadmill can recover. It is only those who have stepped off the treadmill (retired) who will be destroyed and that is why it will be used as well. Inflation is great for borrowers and bad for lenders. When the kids are passed on their parents debts and do not want to be borrowers, they can inflation them away while sticking it to the people who originated the debts. This is why I think it will be the most politically palatable solution.
Nick
Still don't see it Nick. Let me present two options and I'll tell you which one I think will occur.
Option 1. Print money like it's going out of style so that the retired get what was promised to them by the government. Because this would lead to hyper inflation, the retirees really have considerably less in purchasing power. The hyper inflation destroys the economy so every one loses.
Option 2. The government continues to raise the age limits for SS benefits and institutes means testing to reduce benefits for wealthy retirees. This screws the boomer retirees who were promised more than they had a reason to realistically expect but the economy doesn't suffer and in-fact is aided by the solving of this problem by lower interest rates.
I choose and think ultimately the government will choose option 2.
Still don't see it Nick. Let me present two options and I'll tell you which one I think will occur.
Option 1. Print money like it's going out of style so that the retired get what was promised to them by the government. Because this would lead to hyper inflation, the retirees really have considerably less in purchasing power. The hyper inflation destroys the economy so every one loses.
Option 2. The government continues to raise the age limits for SS benefits and institutes means testing to reduce benefits for wealthy retirees. This screws the boomer retirees who were promised more than they had a reason to realistically expect but the economy doesn't suffer and in-fact is aided by the solving of this problem by lower interest rates.
I choose and think ultimately the government will choose option 2.
I have no doubt that option 2 is right and the smart solution. Now all you have to do is find an instance where our government has ever actually applied it.
I'll be waiting.
This isn't about what is right. We all know what is the right thing to do. You cannot promise more than you have. You cannot spend more than you make. Servitude and wealth redistribution are both still the same even if they occur across generations. Everyone seems to get and understand that.
Except for the boomers who have always thought they were above the rules. They aren't just going to disappear. They aren't going to vote for their own demise. They haven't ever made a hard choice against themselves in their entire lifetimes and they certainly aren't going to start when they are oldest and most vulnerable. They'll sue, vote, lobby, scream, you name it. They will prevent what is right because they have all along.
I'm not talking about what is right because again, what you suggest is what is right. I'm talking about taking current trends, projecting them out and then adding a good dose of human nature to try to chart any changes.
The second the boomers start retiring our government has to find and reverse nearly half a trillion dollars in spending per year. First they must stop spending the social security "surplus" because now it will actually be needed for its intended purpose. That stops about $150 billion of hidden spending right there. This spending must be stopped, but the government has NEVER, not even under the supposedly tight-fisted shut down the government Republicans stopped spending $150 billion.
Then the new debt must stop being taken on, that is roughly $250 billion a year. It runs higher or lower depending upon the president and circumstance but it is a good working average.
Then you add back the actual repayment of the social security bonds that make up the trust fund, the national debt and also likely loss of taxes due to retirements and the tax changes related to that status change and you've got another $100 billion.
That is the first year and it gets worse. It can be managed, but only if the government undertakes actions it has never undertaken before. We could keep up on our current path but it requires serious change.
Also think about all that money going out from the government that is no longer going out. That $400-500 billion loss of services will come from somewhere. They you tell people they need to be taxed at a higher rate in order to enjoy this lower level of services? It won't happen and since Grandma and Grandpa still will have large enough numbers to prevent anything different from what they want, (they always have) the changes will have to be sneaky. They will have to beat the boomers at their own game. I think the way they do that is a large dose of inflation even with the risk of hyperinflation.
It doesn't make it right. I'm not arguing right. I'm arguing probable.
I have no doubt that option 2 is right and the smart solution. Now all you have to do is find an instance where our government has ever actually applied it.
Comments
They already print plenty of money. We already have plenty of inflation. The government doesn't want to turn off the presses so they stopped reporting M3. They don't want to raise interest rates so they claim their own measurements are wrong.
This is just the latest example of how inflation is "overstated." They have already taken out items that were in previous measures like... housing.
I have no doubt that hyperinflation or even very high inflation is devastating to the economy. The thread is titled retirement implosion for a reason. Governments don't try to create hyperinflation. They just keep running the presses a bit more, borrowing a bit more, lying and fiddling with the data a bit more until...opps. The currency is destroyed.
There isn't a way to fix the boomer retirement problem. They spent more, indebted themselves and the nation more, saved less and promised themselves more benefits than any generation in history. Massive wealth has been squandered and the generations that follow have had less investment, have had to take on more debt and is also much smaller population-wise but somehow are required to "solve" the problem their parents never took on and also pay for their parent's mistakes in terms of national debt and repayment of social security "bonds" that must be repaid just to keep the already bankrupt system "solvent" for the few years it will be.
The printing of money will meet the paper claims. It will lay waste to the economy but then so will default so the choices are pretty much the same. Only in the inflation scenario those still working and running on the treadmill can recover. It is only those who have stepped off the treadmill (retired) who will be destroyed and that is why it will be used as well. Inflation is great for borrowers and bad for lenders. When the kids are passed on their parents debts and do not want to be borrowers, they can inflation them away while sticking it to the people who originated the debts. This is why I think it will be the most politically palatable solution.
Nick
Still don't see it Nick. Let me present two options and I'll tell you which one I think will occur.
Option 1. Print money like it's going out of style so that the retired get what was promised to them by the government. Because this would lead to hyper inflation, the retirees really have considerably less in purchasing power. The hyper inflation destroys the economy so every one loses.
Option 2. The government continues to raise the age limits for SS benefits and institutes means testing to reduce benefits for wealthy retirees. This screws the boomer retirees who were promised more than they had a reason to realistically expect but the economy doesn't suffer and in-fact is aided by the solving of this problem by lower interest rates.
I choose and think ultimately the government will choose option 2.
Still don't see it Nick. Let me present two options and I'll tell you which one I think will occur.
Option 1. Print money like it's going out of style so that the retired get what was promised to them by the government. Because this would lead to hyper inflation, the retirees really have considerably less in purchasing power. The hyper inflation destroys the economy so every one loses.
Option 2. The government continues to raise the age limits for SS benefits and institutes means testing to reduce benefits for wealthy retirees. This screws the boomer retirees who were promised more than they had a reason to realistically expect but the economy doesn't suffer and in-fact is aided by the solving of this problem by lower interest rates.
I choose and think ultimately the government will choose option 2.
I have no doubt that option 2 is right and the smart solution. Now all you have to do is find an instance where our government has ever actually applied it.
I'll be waiting.
This isn't about what is right. We all know what is the right thing to do. You cannot promise more than you have. You cannot spend more than you make. Servitude and wealth redistribution are both still the same even if they occur across generations. Everyone seems to get and understand that.
Except for the boomers who have always thought they were above the rules. They aren't just going to disappear. They aren't going to vote for their own demise. They haven't ever made a hard choice against themselves in their entire lifetimes and they certainly aren't going to start when they are oldest and most vulnerable. They'll sue, vote, lobby, scream, you name it. They will prevent what is right because they have all along.
I'm not talking about what is right because again, what you suggest is what is right. I'm talking about taking current trends, projecting them out and then adding a good dose of human nature to try to chart any changes.
The second the boomers start retiring our government has to find and reverse nearly half a trillion dollars in spending per year. First they must stop spending the social security "surplus" because now it will actually be needed for its intended purpose. That stops about $150 billion of hidden spending right there. This spending must be stopped, but the government has NEVER, not even under the supposedly tight-fisted shut down the government Republicans stopped spending $150 billion.
Then the new debt must stop being taken on, that is roughly $250 billion a year. It runs higher or lower depending upon the president and circumstance but it is a good working average.
Then you add back the actual repayment of the social security bonds that make up the trust fund, the national debt and also likely loss of taxes due to retirements and the tax changes related to that status change and you've got another $100 billion.
That is the first year and it gets worse. It can be managed, but only if the government undertakes actions it has never undertaken before. We could keep up on our current path but it requires serious change.
Also think about all that money going out from the government that is no longer going out. That $400-500 billion loss of services will come from somewhere. They you tell people they need to be taxed at a higher rate in order to enjoy this lower level of services? It won't happen and since Grandma and Grandpa still will have large enough numbers to prevent anything different from what they want, (they always have) the changes will have to be sneaky. They will have to beat the boomers at their own game. I think the way they do that is a large dose of inflation even with the risk of hyperinflation.
It doesn't make it right. I'm not arguing right. I'm arguing probable.
Nick
I have no doubt that option 2 is right and the smart solution. Now all you have to do is find an instance where our government has ever actually applied it.
I'll be waiting.
Nick
You got me there.
Europe's Lost Youth
Nick
A nice article showing that the boomer beatdown isn't just an American problem.
Europe's Lost Youth
Nick
With any luck, society at large will collapse. Have a nice day.