so it's tax time, the time of year i like to take stock of resources and evaluate plans for the future, and i have a confession to make.
i don't know if this whole faith and credit thing is such a good idea after all. they reclaim at least 10% of their money they salaried me to fund medicare and social security. hell, that's more than i pay god, only i know he's got my back, the others not so much.
so looking at my retirement future and being an aware investor with an eye towards diversity, i just realized my 3-legged stool is really a one egg basket.
first of all, every dollar i hope to have at my disposal in my golden years must be borrowed by the federal government and then transferred to me. they get the dollars by borrowing them from a privately owned bank called, of all things, the federal reserve. tricky. so if they want $100 they call up helicopter ben and he gives them a note that represents the debt now owed to 'property of the federal reserve'. then they give it to me and i feel rich because now i have cash that's good as gold.
but here's what really happened: in order to get that $100 the government promised to pay ben back $105 (principal plus interest). even if they stopped right there and paid the $100 back we'd be bankrupt because we still owe $5 interest. and the only way to get legal tender is to borrow it from the federal reserve. so we borrow another $100 and pay them back the $5 we owe them from the last $100 we borrowed and we save another $5 to pay them back the new $100 we borrowed, and then we invest the remaining $90 in our future. nawww just kidding, we blow it all on cars and food and cell phones. and then we're broke so we borrow another $100 from uncle ben because this party never stops.
which is all good you see and it's been going on since 1913 to the tune of $17 trillion plus unfunded liabilities, but at some point the devil will want his due. no need to worry though, it should be easy to spot and jump off the ride before being consumed and left destitute.
first they'll probably raid any cash on hand like our tsp to fund the short term gap. then they'll probably try reduce pay and benefits and promised pension obligations. as a last resort they may start to talk about different ways to measure inflation and reducing social security and medicare entitlements. so we should have plenty of time to see it coming.
back to the one-egged basket. if the same entity that borrows your savings to pay yesterday's bills and can't afford to cut your retirement check then what makes you think they'll be able to dole out the social security benefit? then what are we supposed to eat? so much for diversification.
don't worry though, it's all backed by our faith and credit. nobody is going to sieze the collateral. what would they do with it anyway? they'd have to hire a whole country's worth of labor to cut the trees and mine the gold and drill the oil, and they've already got that. we are the collateral. and it's more valuable to keep us working to service the debt (interest payments) than it is to reposses our asset.
have you ever played monopoly and felt so bad for your oppenents that you allowed them to mortgage their property for less than it was truly worth just to keep the game going another round even though you knew in the end you owned their ass? who knows, maybe we'll pass go and make a great comeback.
forget the faith and credit crap, it's all blood sweat and tears now baby. there is not enough money in the world to pay back our debt. born into slavery. get used to it. sure, maybe if you work hard enough you can have a nicer car or home in the suburbs and afford your medication/hobbies, but you will pay in the end.
same as it ever was. just with democracy trappings this time. all financed by the benevolence of the fiat. here's your gruel. and may i push your stool in sir?
