Baby Boomer Armageddon
- By John Christian Ryter
- Published 07/18/2008
- ECONOMY
- Unrated
Last October Earlesville, Maryland resident and former 7th grade teacher and nutrition consultant Kathleen Casey-Kirschling, touted for decades as "Baby-Boomer Zero" or "First Boomer," filed for Social Security benefits. Sixty-one year old Casey-Kirschling was born in Philadelphia, Pennsylvania at midnight, Jan. 1, 1946—the first official baby boomer. Her filing for benefits was a momentous occasion for her and a frighteningly symbolic event for the nation. Casey-Kirschling's filing is believed by many in government to be the financial straw that will ultimately break the camel's back. She represents the first of the World War II war babies to begin drawing from dollars that have not existed since Lyndon Johnson's Great Society. The Democratic leadership which controlled both Houses of Congress for 80 of the last 100 years spent the money that, by law, had to be invested in high yield securities since this money did not belong to the US government. The money belonged to the American people who, by law, were obligated to invest it for their old age.
After she filed for her Social Security benefits, Kathleen Casey-Kirschling completed the day at a special luncheon at the National Press Club in Washington, DC where she told reporters she was looking forward to collecting her benefits. "I'm thrilled," Casey-Kirschling said, "to think that after all these years that I'm getting paid back the money that I put in." Any senior level politicians in attendance were probably squirming in their seats as they smiled politely for the cameras, wondering deep in the dungeons of their minds where thoughts they don't ever want to voice are chained, most of them wondered just how many baby boomers it would take before Baby Boomer Armageddon occurred. Casey-Kirschling was the first of 3.2 million baby boomers who will reach 62 this year—which amounts to 365 an hour. Statistically, about 49% of men and 53% of women will take early retirement and reduced benefits.
The Social Security Trust Fund was created in 1937. Funds collected through payroll deduction could not be placed in the general treasury as "tax revenue." Social Security deposits are assigned to the US Treasury where, by law, they must be invested in marketable Treasury securities. In 2007, the US government received Social Security deposits to the Trust of $1,069 billion. During the year of 2007, the Social Security Administration paid out $879 billion, leaving a net surplus of $190 billion. There's only one problem with the government's rhetoric. Uncle Sam is paying current benefits from current revenue. That's a Ponzi scheme. And Uncle Sam knows that when the flood of baby boomers creates the human tsunami that President George W. Bush has been warning the American people about, the floodgates will open and what is left of the US economy will be swept out to sea.
Why is there no money? Not because too many people filed for earned benefits. It is because the money in the Social Security Trust Fund was used to finance handouts to the Welfare Generation from 1964 to 1994. In 30 years the Democrats, who used generational welfare to chain minorities to the feeding trough of the State and to the voting booth where they were forced to vote Democratic to keep their welfare checks coming, stole your retirement funds and replaced them with worthless IOUs.
The government, in turn, argues that far from issuing "worthless IOUs," the "investments" held by the trust funds are backed by the "full faith and credit" of the US government. The bureaucrats insist the federal government has always repaid the Social Security Trust Fund—with interest. And, that's the problem. The Social Security Trust Fund became a "passbook" savings account for the government rather than an investment in which the "people" purchased high yeild securities. Instead of earning the types of returns you would expect from high yield securities, the government paid the American people 4.656% simple interest on their money.
Only, today, the Social Security Trust Fund reserve is almost virtually nonexistent. What should still be a cash reserve in the trillions of dollars is almost an empty vault filled with worthless IOUs that Uncle Sam can't repay. The trust fund is a virtual reality illusion. The government says it exists, so in the virtual reality world of politics, it exists. However, the virtual reality trust fund exists only in the virtual reality ledger sheets kept by the federal comptroller of pipe dreams and mirages.
Because of government smoke and mirrors, three out of five middle-class retirees will run completely out of money if they try to maintain their pre-retirement lifestyles when they accept their gold watch and collect their first Social Security check. A new study by the accounting firm of Ernst & Young, released on July 14 shows that Americans, who expect to live independent of their children when they retire, are going to be faced with some tough choices —ten or more years before they retire. Those tough choices will almost completely eliminate their discretionary income in order to have a post-retirement life that is not an economic nightmare. The choice they face is one that leaves them with a greatly reduced amount of discretionary income for the last decade before they retire, or destitute and dependent on their children after they retire.
The Ernst & Young study indicates that middle-income Americans must find some way to trim their standards-of-living by approximately 25% so they can put that money into 401Ks or some other form of high yield securities. In addition, retirees will have to cut their spending by at least 37% to make sure they don't outlive their money. About 77 million baby-boomers are expected to retire within the next five to seven years. What that means is not only will there be 77 million high-income middle class workers suddenly removed from the US tax roll, but there will be 77 million new retirees expecting monthly checks from Uncle Sam with 77 million fewer taxpayers paying the withholding taxes that currently "cover" the SSI and DI checks that go out every month to the current Social Security and disability insurance recipients.
Tom Neubig, national director for quantitative economics and statistics at Ernst & Young noted that most people believe they will be able to "...maintain roughly the same standard of living after retirement. Our study suggests they are going to have to make some changes. People are going to have to adapt in a number of ways that they weren't anticipating or hoping for."
Married couples with joint household incomes of $75,000 per year, whose supplemental retirement incomes come only from passbook savings or CDs and not from 401K investments, have a 31% change of running out of money before they die if they try to maintain the same lifestyle they enjoyed before retirement. Those who are obligated to depend solely on Social Security have a 90% chance of becoming destitute in their old age. Sadly, many Americans who worked for some of the nation's premiere corporations that moved their operations to the human capital-rich third world, were forced to cash in their retirement plans to keep them afloat financially as they sought new employment, or used their retirement nest eggs to finance startup ventures because new jobs were not to be found without relocating somewhere else.
Government statisticians have calculated that by 2030 the cost of the federal government's Ponzi scheme—Social Security—will outpace the contributions from its unwilling participants and, from that point, the shortfall will have to be drawn from what is left of the Social Security Trust Fund—which will be completely bankrupt in 2041. This will happen largely because of the legalization of abortion in 1973 and the removal of over 65 million consumer taxpayers through the saline baths and scalpels of the abortionists. Abortion was also the culprit that made the exodus of the factories of Corporate America to the third world inevitable since the United States and the industrial nations of Europe, with 0.5 to 0.7 population replenishment rates, were no longer producing enough "homegrown" consumers to support the consumer industry.
Medicare is in the same boat as Social Security. Only, Medicare is already paying out more than it takes in. Advocates of reducing Social Security benefits or, once again, raising the "premium," or advancing the age when recipients will be eligible to receive benefits, with partial benefits available at age 67 and full benefits at either 70 or 72 years of age insist that Social Security will begin negative payments in 2017 not 2030. To keep Social Security solvent until 2041 requires a 16% increase in payroll taxes and a parallel 13% cut in benefits. To keep Medicare solvent past 2017 requires a 122% increase in premiums and/or a 51% decrease in hospital stays.
Every year that nothing is done makes the problem worse. In 2005 President George W. Bush tried to bully the Republican-controlled Congress into beginning to fix Social Security by creating private investment accounts and removing a portion of their Social Security "contributions" from the greedy hands of politicians in order to protect their benefits. Bush and the GOP was blocked from carrying out the plan by House and Senate Democrats who said privatizing any part of Social Security would drain needed money from the Trust Fund. Clearly the liberals know just how fragile the program is, and what happens to the US economy when the house of cards falls.
After she filed for her Social Security benefits, Kathleen Casey-Kirschling completed the day at a special luncheon at the National Press Club in Washington, DC where she told reporters she was looking forward to collecting her benefits. "I'm thrilled," Casey-Kirschling said, "to think that after all these years that I'm getting paid back the money that I put in." Any senior level politicians in attendance were probably squirming in their seats as they smiled politely for the cameras, wondering deep in the dungeons of their minds where thoughts they don't ever want to voice are chained, most of them wondered just how many baby boomers it would take before Baby Boomer Armageddon occurred. Casey-Kirschling was the first of 3.2 million baby boomers who will reach 62 this year—which amounts to 365 an hour. Statistically, about 49% of men and 53% of women will take early retirement and reduced benefits.
The Social Security Trust Fund was created in 1937. Funds collected through payroll deduction could not be placed in the general treasury as "tax revenue." Social Security deposits are assigned to the US Treasury where, by law, they must be invested in marketable Treasury securities. In 2007, the US government received Social Security deposits to the Trust of $1,069 billion. During the year of 2007, the Social Security Administration paid out $879 billion, leaving a net surplus of $190 billion. There's only one problem with the government's rhetoric. Uncle Sam is paying current benefits from current revenue. That's a Ponzi scheme. And Uncle Sam knows that when the flood of baby boomers creates the human tsunami that President George W. Bush has been warning the American people about, the floodgates will open and what is left of the US economy will be swept out to sea.
Why is there no money? Not because too many people filed for earned benefits. It is because the money in the Social Security Trust Fund was used to finance handouts to the Welfare Generation from 1964 to 1994. In 30 years the Democrats, who used generational welfare to chain minorities to the feeding trough of the State and to the voting booth where they were forced to vote Democratic to keep their welfare checks coming, stole your retirement funds and replaced them with worthless IOUs.
The government, in turn, argues that far from issuing "worthless IOUs," the "investments" held by the trust funds are backed by the "full faith and credit" of the US government. The bureaucrats insist the federal government has always repaid the Social Security Trust Fund—with interest. And, that's the problem. The Social Security Trust Fund became a "passbook" savings account for the government rather than an investment in which the "people" purchased high yeild securities. Instead of earning the types of returns you would expect from high yield securities, the government paid the American people 4.656% simple interest on their money.
Only, today, the Social Security Trust Fund reserve is almost virtually nonexistent. What should still be a cash reserve in the trillions of dollars is almost an empty vault filled with worthless IOUs that Uncle Sam can't repay. The trust fund is a virtual reality illusion. The government says it exists, so in the virtual reality world of politics, it exists. However, the virtual reality trust fund exists only in the virtual reality ledger sheets kept by the federal comptroller of pipe dreams and mirages.
Because of government smoke and mirrors, three out of five middle-class retirees will run completely out of money if they try to maintain their pre-retirement lifestyles when they accept their gold watch and collect their first Social Security check. A new study by the accounting firm of Ernst & Young, released on July 14 shows that Americans, who expect to live independent of their children when they retire, are going to be faced with some tough choices —ten or more years before they retire. Those tough choices will almost completely eliminate their discretionary income in order to have a post-retirement life that is not an economic nightmare. The choice they face is one that leaves them with a greatly reduced amount of discretionary income for the last decade before they retire, or destitute and dependent on their children after they retire.
The Ernst & Young study indicates that middle-income Americans must find some way to trim their standards-of-living by approximately 25% so they can put that money into 401Ks or some other form of high yield securities. In addition, retirees will have to cut their spending by at least 37% to make sure they don't outlive their money. About 77 million baby-boomers are expected to retire within the next five to seven years. What that means is not only will there be 77 million high-income middle class workers suddenly removed from the US tax roll, but there will be 77 million new retirees expecting monthly checks from Uncle Sam with 77 million fewer taxpayers paying the withholding taxes that currently "cover" the SSI and DI checks that go out every month to the current Social Security and disability insurance recipients.
Tom Neubig, national director for quantitative economics and statistics at Ernst & Young noted that most people believe they will be able to "...maintain roughly the same standard of living after retirement. Our study suggests they are going to have to make some changes. People are going to have to adapt in a number of ways that they weren't anticipating or hoping for."
Married couples with joint household incomes of $75,000 per year, whose supplemental retirement incomes come only from passbook savings or CDs and not from 401K investments, have a 31% change of running out of money before they die if they try to maintain the same lifestyle they enjoyed before retirement. Those who are obligated to depend solely on Social Security have a 90% chance of becoming destitute in their old age. Sadly, many Americans who worked for some of the nation's premiere corporations that moved their operations to the human capital-rich third world, were forced to cash in their retirement plans to keep them afloat financially as they sought new employment, or used their retirement nest eggs to finance startup ventures because new jobs were not to be found without relocating somewhere else.
Government statisticians have calculated that by 2030 the cost of the federal government's Ponzi scheme—Social Security—will outpace the contributions from its unwilling participants and, from that point, the shortfall will have to be drawn from what is left of the Social Security Trust Fund—which will be completely bankrupt in 2041. This will happen largely because of the legalization of abortion in 1973 and the removal of over 65 million consumer taxpayers through the saline baths and scalpels of the abortionists. Abortion was also the culprit that made the exodus of the factories of Corporate America to the third world inevitable since the United States and the industrial nations of Europe, with 0.5 to 0.7 population replenishment rates, were no longer producing enough "homegrown" consumers to support the consumer industry.
Medicare is in the same boat as Social Security. Only, Medicare is already paying out more than it takes in. Advocates of reducing Social Security benefits or, once again, raising the "premium," or advancing the age when recipients will be eligible to receive benefits, with partial benefits available at age 67 and full benefits at either 70 or 72 years of age insist that Social Security will begin negative payments in 2017 not 2030. To keep Social Security solvent until 2041 requires a 16% increase in payroll taxes and a parallel 13% cut in benefits. To keep Medicare solvent past 2017 requires a 122% increase in premiums and/or a 51% decrease in hospital stays.
Every year that nothing is done makes the problem worse. In 2005 President George W. Bush tried to bully the Republican-controlled Congress into beginning to fix Social Security by creating private investment accounts and removing a portion of their Social Security "contributions" from the greedy hands of politicians in order to protect their benefits. Bush and the GOP was blocked from carrying out the plan by House and Senate Democrats who said privatizing any part of Social Security would drain needed money from the Trust Fund. Clearly the liberals know just how fragile the program is, and what happens to the US economy when the house of cards falls.
