U.S. Hurtles Toward System Failure

[CountryBoy]

THE USGOVT IS DESPERATE FOR FUNDS.

The USGovt is making progress in raiding federal pension funds, so far snatching $79 billion.

The balance of securities held by the Thrift Savings Fund, aka the G-Fund, also according to Stone Mountain, has been raided for $57 billion in recent weeks, with funds replaced by government IOUs. The funds have suffered a sizeable disinvestment, to be sure, to keep America strong.

http://www.financialsense.com/contributors/jim-willie/us-hurtles-toward-system-failure

Shades of Social Security. This administration has no idea how to solve this problem. The evidence of this has been out there for over 3 years that the current administration was way in over their head. It is finally coming to light as the administration's leading economists are resigning so they won't be there when the SHTF.

I know this will fall on some deaf ears, but I'm beyond caring whether these people survive or not, they are YOYO (Your on your own). This is for the folks that have maintained an open mind, so that they may have a better idea how to handle their funds.

As for me, since I'm retiring in August, I will adjust my withdrawals accordingly. I can better handle my funds better that president Obeyme and his yes men economists. I knew they were raiding/considering our G-Fund for over a year and was one big factor in my retiring early. Nothing is beyond these elitist and banksters, when it comes to our money.

Good Luck to those of you that haven't drunk the Kool Aid,

CB

 

[Boghie]

CB,

That is one of the reasons I didn't move to 'safety' in June. Is there safety in the 'G Fund? And, have we folks reviewed the holdings in the 'F Fund'? I’ve been on this band wagon for quite some time.

Yowser.

Give me a money market fund and/or precious metals.

How bout another thought. I read the article you presented a while back, but there might be another juicy reason for the 'G Fund' asset dump. Maybe folks are bailing from the 'G Fund'. Kinda hard to collateralize assets that do not exist. Maybe that is why Geithner is bailing. If that goober collateralized the ‘G Fund’ to buy a couple of weeks of borrowing and we investors subsequently bailed from it than things can get real tricky real soon. Maybe these economic morons didn’t want to spook we gubmint employees so they didn’t lock the fund. However, we investors felt the risk of illiquidity was a bit too high so we ran away. These folks are dumb enough to think we can’t get current information. Dumb and dumber.

High Finance.

High circa 2005 – 2007 Finance.

Only the Federal Gubmint plays that game.

 

[nnuut]

I hear Ya CB and agree, if they don't do something soon it will be hell to pay and we will be the ones paying.:nuts:

 

[Boghie]

CB,

I referenced the primary source of the 'G Fund' raid. Didn't read the article presented. The referenced one is a bit too alarmist for me. I don't think the debt ceiling really matters. Nobody will lend us the money at interest rates we can pay. We just have to force serious cutbacks... Maybe back to the FY2007 budget. Oh, the horrors. Then again, my budget kinda looks 2007ish.

Anyway, I had significant assets in the 'G Fund' (significant for me that is) when Geithner and his band of borrowers collateralized it. Now I have nothing in the 'G Fund'. I wonder how he is going to deal with that, eh...

 

[James48843]

"...This administration has no idea how to solve this problem."

Sure they do.

Simply allow Bush tax cuts to expire. That's the first part.

Bring all our soldiers home from places around the world. All of them. Every single one of them.

Cancel all military spending programs of things the Pentagon has not specifically requested.
Cancel the F-22 and F-35 programs. Put the B-2 bombers in mothballs.

There- you've balanced the budget. No sweat.

 

[burrocrat]

No sweat.

cool, is there like an online calculator or video game i could play to make it so?

this brave new world thingy is cool.

http://www.youtube.com/watch?v=-ZxHAZChcYU

 

[Show-me]

Sure they do.

Simply allow Bush tax cuts to expire. That's the first part.

Bring all our soldiers home from places around the world. All of them. Every single one of them.

Cancel all military spending programs of things the Pentagon has not specifically requested.
Cancel the F-22 and F-35 programs. Put the B-2 bombers in mothballs.

There- you've balanced the budget. No sweat.

Un-freak'n believable MARK THIS ON YOUR CALENDAR, we almost agree 100% except for the tax cuts. I say everyone should pay that enjoys the protection and the many programs the U.S. political machine provide for us.

 

[nnuut]

Don't worry about your money in the "G" Fund, it will be there when you want it, it may not be worth anything but it will be there!

 

[Frixxxx]

Sure they do.

Simply allow Bush tax cuts to expire. That's the first part.

Bring all our soldiers home from places around the world. All of them. Every single one of them.

Cancel all military spending programs of things the Pentagon has not specifically requested.
Cancel the F-22 and F-35 programs. Put the B-2 bombers in mothballs.

There- you've balanced the budget. No sweat.

Except the Bush tax cuts initiated the AMT and that means the rich would have MORE ways to hide their money.
Soldiers aren't coming home anytime soon. Get the U.N. to fund all "police actions" for those fighting for democracy and rebuilding. Share the cost burden with the world.
Scale back the military to a defensive posture for a few years...Excpet there aren't any jobs for all those servicepeople in the states

Oh wait....stop spending in America on futile investments like "The Neon Boneyard Park and Museum" or paying money to digitize Grateful Dead memorabilia. I believe it is time for those that want these types of things to pay for it themselves....

Oh and stop foreign aid...we spend more on that than our own veterans.

I don't mind paying taxes, but let's focus!

 

[FAB1]

THE USGOVT IS DESPERATE FOR FUNDS.The USGovt is making progress in raiding federal pension funds, so far snatching $79 billion. The balance of securities held by the Thrift Savings Fund, aka the G-Fund, also according to Stone Mountain, has been raided for $57 billion in recent weeks, with funds replaced by government IOUs. The funds have suffered a sizeable disinvestment, to be sure, to keep America strong.http://www.financialsense.com/contributors/jim-willie/us-hurtles-toward-system-failureShades of Social Security. This administration has no idea how to solve this problem. The evidence of this has been out there for over 3 years that the current administration was way in over their head. It is finally coming to light as the administration's leading economists are resigning so they won't be there when the SHTF.I know this will fall on some deaf ears, but I'm beyond caring whether these people survive or not, they are YOYO (Your on your own). This is for the folks that have maintained an open mind, so that they may have a better idea how to handle their funds. As for me, since I'm retiring in August, I will adjust my withdrawals accordingly. I can better handle my funds better that president Obeyme and his yes men economists. I knew they were raiding/considering our G-Fund for over a year and was one big factor in my retiring early. Nothing is beyond these elitist and banksters, when it comes to our money.Good Luck to those of you that haven't drunk the Kool Aid,CB

I was just thinking about you the other day Country. Good to hear from you!

 

[James48843]

...Oh and stop foreign aid...we spend more on that than our own veterans.

Not exactly. We spend about 63 billion on foreign aid, including budget for the State Department. We spend about $153 billion on Veterans Affairs. including Veterans Benefits.

We can agree that we need to take care of veterans, and reduce our foreign aid. But let's make sure we are honest about the numbers--foreign aid is really just a small part of the big picture. We'll still need some foreign aid programs. We spend a good deal of that foreign aid with countries such as Russia and the Ukraine, helping them to secure nuclear weapons out of the hands of those who would want to use them to do bad things. That is money well spent.

 

[dannyboy]

I was just thinking about you the other day Country. Good to hear from you!

:worried:Good to hear from you, good luck in future endeavors.
DB

 

[Boghie]

Sure they do.

Simply allow Bush tax cuts to expire. That's the first part.

Bring all our soldiers home from places around the world. All of them. Every single one of them.

Cancel all military spending programs of things the Pentagon has not specifically requested.
Cancel the F-22 and F-35 programs. Put the B-2 bombers in mothballs.

There- you've balanced the budget. No sweat.

James,

Let's work the numbers - shall we...

From CNN -

"Treasury estimates the costs of making the tax cuts permanent for everyone is $3.7 trillion over 10 years.

Of that, $3 trillion accounts for the cost of extending them for the vast majority of Americans, as the president has proposed. The remaining $700 billion is the cost of extending them permanently for the high-income earners."​

.
That means that a rough annual cost estimate for the Bush Tax Cuts for high-income earners is $70 Billion. That is $70 Billion per year.

Now, since we can obviously choose to avoid force projection why have a Navy, Air Force, and Army at all. Certainly we can run bare bones and draft when required. Worked real well in WWII. So, I'll take your DOD trimming to a very reasonable extent and wipe out the ENTIRE budget for the DOD. That will obviously take care of the F22, F35, and B2. Wow, what a savings...

Wiping out the DOD will save $668 Billion.

So, James, the changes in the tax code you present added to wiping out the entire annual DOD budget amount to a savings of: $738 Billion

The FY2010 annual deficit was: $1,294 Billion

The FY2011 annual deficit is projected to be: $1,645 Billion


James, am I missing something. Wiping out the entire DOD and rescinding the Bush Tax Cuts on the wealthy would have resulted in an FY2010 deficit of $556 Billion and a projected FY2011 deficit of $907 Billion. Both of those deficits are 20% to 100% higher than any former deficit. Can you show me your sources or your math. I might be wrong - I have been wrong before!!!

As an aside, I really don't think we should wipe out the DOD.:nuts:.

 

[James48843]

James,

Let's work the numbers - shall we...

From CNN -

"Treasury estimates the costs of making the tax cuts permanent for everyone is $3.7 trillion over 10 years.

Of that, $3 trillion accounts for the cost of extending them for the vast majority of Americans, as the president has proposed. The remaining $700 billion is the cost of extending them permanently for the high-income earners."
​

.

I didn't say let the Bush tax cuts only expire for the highest income earners. I said let them expire for everybody. Not only the top rate back to 39.5%, but also capital gains taxes back to their previous levels. America seem to do just fine when short term cap gains were taxes at the same rate as income- It was that way in the 1990's. And long term gains were only slightly lower. that's fine. Let's do that again- short term at income rate, and long term at income minus 10%. Those kinds of rates are not at all unheard of. In fact, they worked just fine when Clinton held the White House. IF dropping the rates is supposed to be so good for job growth, how come job growth didn't happen in the Bush years? You'd think all those lower rates would be gangbusters for job growth. It didn't happen. the only thing that happened was huge deficits began.

This article says that will bring in over $4 trillion dollars over 10 years. http://www.uncoverage.net/2010/10/if-bush-tax-cuts-expire-in-january-heres-your-tax-increase/

That's roughly $460 billion per year. Add to that your $668 billion of defense cuts. That makes $ 1,128 income growth. Sure, let's trim a little on the spending side. We can do that. We can meet in the middle and come to a balance budget without too much difficulty.

 

[Boghie]

I didn't say let the Bush tax cuts only expire for the highest income earners. I said let them expire for everybody. Not only the top rate back to 39.5%, but also capital gains taxes back to their previous levels. America seem to do just fine when short term cap gains were taxes at the same rate as income- It was that way in the 1990's. And long term gains were only slightly lower. that's fine. Let's do that again- short term at income rate, and long term at income minus 10%. Those kinds of rates are not at all unheard of. In fact, they worked just fine when Clinton held the White House. IF dropping the rates is supposed to be so good for job growth, how come job growth didn't happen in the Bush years? You'd think all those lower rates would be gangbusters for job growth. It didn't happen. the only thing that happened was huge deficits began.

This article says that will bring in over $4 trillion dollars over 10 years. http://www.uncoverage.net/2010/10/if-bush-tax-cuts-expire-in-january-heres-your-tax-increase/

That's roughly $460 billion per year. Add to that your $668 billion of defense cuts. That makes $ 1,128 income growth. Sure, let's trim a little on the spending side. We can do that. We can meet in the middle and come to a balance budget without too much difficulty.

James,

My point gave you every dime budgeted to the Department of Defense. There would be NO Department of Defense. But, even given that, CNN.Money estimated a revenue gain of $3.7 Trillion dollars over a ten year span if we reverted back to the Clinton era tax code - something President Obama does not want. Anyway, that means:

$370 Billion per year in revenue
$668 Billion if we no longer have a Department of Defense (no Navy, Army, Air Force, Marine Corps)
-----------------------------------------------------------------------------------------------
$1,038 Billion in deficit reduction.


The FY2011 projected deficit is $1,645 Billion. We need is another $607 Billion.


Or, we could reset spending to FY2007 levels. That is, we could budget spending to $2,730 and immediately cut $1,088 Billion out of the deficit. Even if we inflation adjust FY2007 to $2,975 in expendutures we cut the annual deficit by $843 Billion.

Does anyone out there think we have received good value for the additional Trillion we are spending annually?

Folks, we have no cash flow anymore. Who cares about a debt ceiling if we can't get cheap loans. Anyone see the increase in the 'G Fund' interest? That means the cost of money is increasing for the gubmint.

 

[Boghie]

Folks,

This administration has presided over a non-compounded increase in debt by $3,240 Billion since February 1, 2009. This is embarrassing...

What this administration has done financially is to wipe out our cash flow. Has anyone noted that the loan rate on the ‘G Fund’ has risen? True, it only increased from 2.5% to 2.65% (thanks as always Frixxxx – by the way, I poached a loan at the 2.5% rate to buy energy efficient windows. James will be happy). Regardless, my guess is that we are at the beginning of such interest rate increases. And the ‘G Fund’ rates are the rates Social Security is charging the Federal Government for use of its assets. What happens if that hits 4.25% - the 10 year average? The answer: More cash flow destruction.

I don’t know about the rest of you but I have been using FED Ben’s very low interest rates to pay down debt. The Federal Government should have been doing so as well.

Oh, well…

 

[msymonds]

I too am thinking on just retiring early, moving out of California-Silicon Valley to southern Oregon where living is not so expensive. We have to sell our mobile home first and probably will put it on the market in September. As soon as it is sold, I will give my notice and pull out my money in the G fund and transfer it to a standard IRA. I will not put my money at risk due to the government defaulting on its debts. The little pension I will get since I have just been with the federal government for 10 years will pay for my health insurance.
Thanks for your post, Country Boy.

 

[Show-me]

I find it disheartening that the .gov is still using the same IOU system that destroyed Social Security to tap TSP.

 

[CountryBoy]

msymonds,

I wasn't going to post again, but please don't base your life decisions on what I post. I'm just offering my opinion, and it is just that, my opinion and conclusions. As you can see, most here are ridiculing/mocking me, my conclusions and/or sources of information since they don't agree with my views or what sources of information, (MSM only is qualified) should be used as the gospel.

It doesn't bother me, I just consider the source, but please do your own research, before making such a major decision. I just have more faith in my investing prowess as opposed the the Fed's, since they have such a stellar historical record. :laugh: Most folks here believe the Gov't is better at taking care of their money and have their best interests at heart and will take care of them when the SHTF. :blink: Each to his own.

But they never did disputed that the gov't has raided our G fund for $257 biliion or if the Gov't used the same method for determining inflation or unemployment as they used to, we'd be in or on the verge of a depression, they just conviently ignore those facts. Convenient, huh?

Oh, they'll replace our money they "borrowed", but with dollars of a lot less in value, like they are going to do with our SS Funds. Theyll just kick the printing presses up a notch.

Good Luck in your retirement,

CB

 

[msymonds]

Country Boy
Thanks again for writing regarding my recent posts and your honest concern. My life decisions are being made not only because the G fund is being raided and IOU's are used as
replacement. It is also the fact that I believe the stock market will crash soon and all the profits made from 09 on will be wiped out. I am starting to invest in physical silver and gold to protect against the falling dollar and hyperinflation.

One needs to seek information from all sources otherwise it is just propaganda and it is obviously you are searching for the information that the main-line news does not reveal.

Good Luck in your retirement and please keep us informed with your outstanding Knowledge!