Not only does he inherit another mess, but this one is even worse than the last one.
Not only does he inherit another mess, but this one is even worse than the last one.
Actually, the recession has been over for a while now.
It had turned into a full-fledged depression some time back. Much like the United States in 1936, there were so many people who were not sophisticated enough to realize that further suppression of investment by what were then termed to be “the wealthy” was only to do even greater damage to themselves. As a consequence, the depression was at an even deeper level in 1938 than it was in 1933.
And at the depth of that depression, Social Security was introduced. The promise it offered, that individuals would be able to enjoy their “golden years” without the spectre of poverty, was to be funded by a tax that fell equally on the employer and employee. Only, it ends up that the employee pays ALL the freight on this tax, known as FICA, because it comes out of the amount the employer has set aside for the payment of wages to the individual. Social Security was always a tax program, and existed only to provide additional revenue to the Federal Treasury, as the serious payout from that supposedly “segregated” fund was much lower than the receipts. So naturally, the fund was “borrowed” and put into general revenue.
Except, it has never ever been on any repayment schedule.
And now, as a parallel, the “Patient Protection and Affordable Care Act” is established as a NEW taxation program, only, unlike Social Security, the payout will start much sooner, and the base of the taxable sources will be much more broad than merely wage income. And of course, this revenue will simply go into the general fund, without even a pretense of creating a “segregated” fund.
The playbook never changes. And it always ends the same way, with economic conditions so precarious that nations end up in a worldwide struggle that comes finally to a shooting war.
World War II was a dress rehersal for what is coming. The big players will, willingly or otherwise, include the United States, and very likely the rift between those countries that produce energy, and those who consume it.
Nothing, and nobody, shall be “too big to fail”.
