Posted on 04/18/2016 7:21:40 PM PDT by george76
Stan Druckenmiller ... when I look at the current picture of expected tax revenues combined with benefits promised to future generations, this is the most unsustainable situation I have seen ever in my career.
The disaster that Druckenmiller sees coming for the United States is all about changing demographics and entitlement spending. They don’t add up to a sustainable situation.
In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States.
Today, entitlement spending has swelled to nearly 70% of the annual federal budget.
Things are about to get a whole lot more complicated. The 20-year baby boom that took place after World War II is now beginning to result in a retiree boom.
...
Corporations are required to disclose on their balance sheet the future defined pension obligations that their employees have earned.
Those are very real liabilities for companies that are going to have to be paid, so they should be included.
The balance sheet of the United States, meanwhile, doesn’t account for the future payments that it has promised ... They should be recorded as liabilities of the United States.
(Excerpt) Read more at dailyreckoning.com ...
OK, clarify your statement. To WHOM are all these countries in debt? If you’re going to say “The Bankers”, the problem is obvious and the solution is easy. Kill the bankers, as they have produced nothing but misery for all.
Those “liabilities” aren’t reported as such because the government is not legally obligated to pay them. Granted, in order to avoid getting strung from lampposts politicians will probably alter the law to screw future people while letting the high end current receivers die off or get old enough in the aggregate that they can’t shoot straight...
Why stop? All those suckers will still pull the voting lever for the same crew, hell, when the wheels fall off they’ll be lined up to impart misery and death to a suitably tainted scapegoat class designated by the people that actually got us into this situation.
And it doesn’t matter that the SAME end result is there in the history books and even on TV today for all the gibbering idiots to see and know. The drooling masses will head scratch through the fall wondering what went wrong and which “haves” “screwed” them.
It’s why the globe needs the cleansing solar electromagnetic superstorm...
The flaw in that reasoning is that the demonrats created that non productive portion of society with the flood of benefits in the 60’s. The black nuclear family was just a few percentage points off the white nuclear family in terms of fully parented households and had a closing income gap.
The rats managed to not only destroy the black family on a level akin to “you’d be prosecuted for genocide if you lost a war while it was going on”, but they managed to swing the narrative 180 degrees and pin the blame for all the woes on republicans and white people! You have to hand it to the evil hell spawn party for being able to facilitate resegregation, Jim Crow, KKK, denial of rights and the family destruction and then turn around and blame it on others! Democrats manage to pull off Stalin level s*** and throngs of people still love them!
Roll out only the obligations Federal, State, and Municipal, government have associated with employees of those entities and the numbers change significantly. Civil Service jobs need to go back to the way they ran before Carter allowed Federal workers to unionize and States that can't face down the union in the State can just go bankrupt as a result.
Fat SOBs waddle down to the appropriate office, dictate their terms to the government, and our "representatives" make a little noise then add to the appropriations bill whatever they were told to add. Millions of people are out of work and at the same time people retire from State, Federal, and Municipal, government jobs only to start receiving more than they ever made while working ?
Please, end the corruption then recalculate that gap. As it stands now, the people with legitimate needs and least able to get by without help will be pushed deeper into the muck so the gravy train can continue for government employees.
We’ve been betrayed and bankrupted by our gov.
Imagine what the world of low info voters out there is like!!!
the “Cutting Waste and Fraud Will Solve The Problem Two-Step”
the “Get Rid of Every Government Program Except The One That Benefits ME Tango”
the “Tax The Snot Out Of My Grandkids, But Keep MY Check Coming Waltz”
and that evergreen favorite, the “Kick The Can Down The Alley Until After I’m Dead Fox Trot"!
there is no more simple math in the US. If you can’t show it in 152 steps, it don’t count.
“We need to be taxing at about 19 or 20 percent of GDP and spending at about 17 percent. Instead, we are spending at 24 percent GDP and taxing at about 19 percent.”
And with the lower 47% of our fellow Americans paying nothing, I wonder what tax rate is needed to achieve equilibrium? ... 85% ... 115%
Tax rates can’t rise to meet the gap—that would require tax levels that would crush the economy and thus crush the tax yield.
We are headed to economic disaster for an extremely simple reason: We no longer make anything tangible to sell!
No products, no market, no money!
Oil, gas, minerals and physical products was the mainstay of the powerful American economy we used to know. Now it’s education, government, healthcare, and a whole host of various industries that exist solely upon strokes of the government pen.
We are simply doomed economically for the very fact that we don’t really have anything to sell. Money circulates from the people...to all forms of government and government supported programs and industries, and the taxes they generate in the way of property and income taxes (personal and business) circulate back to the government and it goes on and on and on.......in a circle.
I agree... but, it can sure go on a lot longer than you might think. I bought a book, The Great Reckoning, that makes pretty much this same case. I bought that book 25 years ago. It was all supposed to happen in the1990's.
Today, Japan's debt/GDP ratio is 2.5X ours. Their population is shrinking much faster than ours. And yet, they still trudge on.
I'm 56 now. Maybe they can keep this bubble in the air longer than my lifetime... or, my kid's lifetimes? Maybe deficits really don't matter? If nobody ever settles up, what difference does it make?
The engineer in me says this MUST happen. The real world observer in me says: It sure hasn't, thus far.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.