DON'T DO US ANY MORE FAVORS
by The Mogambo Guru
Apparently I am not the only guy who is upset by the
privatization of Social Security thing, and for proof of
that, I proudly present Llewellyn Rockwell, Jr., president
of Ludwig von Mises Institute, who, in his essay Save or
Else, said "The movement to privatize Social Security
(fully or partially) may be the most ideologically
duplicitous and fiscally irresponsible I've seen in my
lifetime.
"The money will continue to flow to older Americans, but
not come from present revenue. It will come from new funds.
And where are these funds going to come from? Among those
who favor privatization, there are two camps: the left wing
suggests more taxes and the right wing suggests more debt.
"The proponents say it is worth running up this level of
debt because it will save money later. But you know what?
In the entire history of government finance and government
programs, I doubt that there is a single one that didn't
claim to save money in the long run. We have to 'invest'
now in education in order to save money later on x, y, and
z. We must nationalize the health care system now so that
we can save money later that will otherwise be spent on
ballooning costs. We must go to war now to prevent a worse
war later.
"This is the staple rhetoric of all government programs
from time immemorial. When a robber comes to your door and
says he wants your television and stereo now so that he
won't have to take your car and kid next week, you might
comply, but you shouldn't believe he is doing you a favor."
Hahaha! Bravo! Well said!
He adds, "It is a disastrous decision to create an
additional forced savings program that is wholly
unnecessary, and will bring about vast distortions in the
stock market." To that I add; distortions, yes. But also
higher stock prices for a while longer, and that will
forestall the imminent collapse of the stock market. THAT
is the whole freaking point of it. That this is just
another transparent and slimy little scam perpetuated by
government and their little playmates in the financial
industry, necessitated by hitching the economy of the
United States to inflation in assets, goes without saying.
Jay Taylor of MiningStocks.com newsletter has written on
this very topic in an essay, Catch-up With Gold in 2005. He
writes, "Since the empire makes all the rules, it can do,
and is obviously doing, everything within its power to keep
the status quo alive and well. That's why, as Richard
Russell argues, the Fed will fight deflation tooth and nail
because if/when deflation gets the upper hand, the empire
will suffer a serious, if not fatal, decline, given our
enormous indebtedness."
I will go even farther than that. I will say that this
coordinated action could possibly explain why it is that
almost everybody involved in the oversight of the last
Presidential election was so gung-ho on having balloting
machines that had no paper trail, so that the results could
not be verified. Only a real first-class bozo could
possibly believe that the election could not be "fixed,"
and only a nation as full of morons as the United States
would roll over for such a thing without even a whimper.
And if the American people are so incredibly na?ve and
stupid as to allow such a transparent fraud in something as
simple as an election, then pulling the wool over their
eyes as far as economics is concerned is going to be a
breeze!
But there is a lot of money floating around already, and it
takes a lot of profits to pay all the interest on all that
debt. CBS.MarketWatch.com reports, "Total U.S. debt
increased at a 7.4 percent annual rate to $23.6 trillion,
as federal debt slowed to a 4.9 percent growth rate. Debt
owed by U.S. businesses increased at a 5.1 percent rate,
the fastest in five quarters.
Household mortgage debt increased at an 11.8 percent annual
rate to $7.3 trillion, which was offset by higher asset
values."
Well, I've got Big Mogambo News (BMN) for CBSMarketWatch,
because higher debt is not offset by anything, including
higher asset values, because the only way you can offset
them is to sell the damn house or the other assets, and
then you got nothing all the way around. No debt, no house,
no nothing.
They don't listen to me, since they figure that they are a
bunch of big-time CBS hotshots and I am just the crazy guy
on the curb offering to clean their windshield for a
quarter. So they continue like I wasn't even here,
"Household real estate was worth $16.6 trillion, up more
than 20 percent at an annual rate." The only two things
THAT could mean are: 1) people are paying higher prices to
buy a house, which is not a good thing for them, and 2)
that everybody is paying bigger property tax bills on the
higher assessments, and paying higher taxes is never a good
thing, either. And if you think either of those things is
good for an economy, then you got rocks in your head
(RIYH), as they say.
Like a dentist's drill, their words are starting to bore
painfully into my head. "Fed officials have said consumer
debt levels are not problematic because household net
worth, especially in housing, has also increased." This is
the kind of laughable idiocy that habitually spews from the
Federal Reserve, banks, stock and bond touts, and
government.
Regards,
The Mogambo Guru
for The Daily Reckoning
Editor's Note: Richard Daughty is general partner and COO
for Smith Consultant Group, serving the financial and
medical communities, and the editor of The Mogambo Guru
economic newsletter, an avocational exercise the better to
heap disrespect on those who desperately deserve it.
The Mogambo Guru is quoted frequently in Barron's, The
Daily Reckoning and other fine publications. If you're
inclined to read more, you'll find the whole Mogambo here:
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