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Banks: Welfare costs greatest threat to US economy - 1/11/2008 10:00:44 AM   
cyberdude611


Posts: 2596
Joined: 5/7/2006
Status: offline 		Unless the US solves its problems with social security and healthcare, the US may lose its perfect credit rating within a decade.

Many banks are growing worried that the US has no plans to deal with a social security system projected to start running a deficit within the next 8 years. And to worsen the worries, some politicians want to expand welfare programs such as medicaid and medicare and provide healthcare coverage to 47 million Americans without much plan on how such an expansion would be paid for.

So will the liberals in here tell me how we are going to pay for MORE social services if we are not going to be able to pay for the ones we already had? It appears unless we cut these programs, we will run into bankruptcy.

http://www.ft.com/cms/s/0/fcc631cc-bfe6-11dc-8052-0000779fd2ac.html?nclick_check=1
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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 10:09:55 AM   
Stephann


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From: Portland, OR
Status: offline 		The FT can be cranky about letting us see full articles.  MSNBC bought the right to publish the same article though;

http://www.msnbc.msn.com/id/22594446/

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 10:36:58 AM   
juliaoceania


Posts: 21383
Joined: 4/19/2006
From: Somewhere Over the Rainbow
Status: offline 		The banks hate Social Security, which is NOT welfare. People pay into Social Security.. it is NOT a charity....

The banks want those investment dollars and they will say anything to get their hands on them... anyone that trusts their future to people that are greed motivated needs their heads examined in my opinion


_____________________________

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 10:47:01 AM   
SugarMyChurro


Posts: 1912
Joined: 4/26/2007
Status: offline 		Maybe what we should really do is fix that problem we have with fractional-reserve banking. I mean, "debt is slavery" - right?

I can think of some economic middlemen that don't need jobs.

Talk about the pot calling the kettle black...what is our whole economic system but a means to prop up the otherwise useless bankers to which we have literally given the keys to our national wealth? And for no reason!

Stupidest shit I have ever heard...

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 10:53:46 AM   
sophia37


Posts: 1433
Joined: 2/7/2006
Status: offline 		You're most right. Lets get rid of Social security and medicare and medicaid. Old people just drag us down dammit. And poor people. Whats up with that? I sure never voted for poor people anytime that I can remember. So yes. Screw them. The real answer that will save our countrys credit is in sending jobs over seas. And then shoot. Why dont we just invent service sector jobs. How bout that? But oops. That might make for poor people. So I know!

Lets have EVERYONE work at those jobs. 11 dollars tops. Nobody will be poor if we all make the same amount of money. Isnt that how it works? Hmm. Come to think of it, didnt the big Car manufacturers just come up with and implant that great idea? So I guess Im on the right track there! And finally, lets raise the age in which we call all retire. I guess its now 67 for those of us born after 1959. Lets just skip that number right up till a new retirement age of 75 ASAP.

So TaDa! Problems solved. Youre very welcome.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:02:52 AM   
mnottertail


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Status: offline 		Well, that may be what we will have to do to dipnet the banks out of the sub-prime fix.......glad you signed up, we will forward your name to the proper authorities.

Federal Reserve 

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:07:02 AM   
Mercnbeth


Posts: 11766
Status: offline
quote:

The banks hate Social Security, which is NOT welfare. People pay into Social Security.. it is NOT a charity....


julia,
"Social Security is NOT a charity"; is 100%correct. The problem is what people paid into Social Security is NOT there. Imagine if you put the same money in a bank and when it came time to pull it out it wasn't there and that's the problem that the Moody's rating is addressing.

Unlike Banks, the US government who received the payments and is responsible for paying them out, can print money. When they have to do so to fulfill Social Security payment commitments it will be a disaster. It was why there was an attempt to allow people to have choice with the money.

Granted, not everyone, (dare I say most?) don't understand and shouldn't be given the option. It would be an inherent problem that any 'option' system would eliminate the 'smart money' and further reduce SS ability to pay.

I honestly don't remember when, or which administration was first to use SS money in the general fund, but ever since that day, the US government knew that eventually, someday, it would not be able to fulfill their obligations. It seems that day is now on the horizon.

It is a result of people living longer. At one time a meaningful percentage of people, or their estate, never saw one penny of the money they paid into SS. Now - that percentage is almost non-existent, meanwhile cost and payouts continue to rise.

I'm older than you by a long shot and I'm not relying on SS as a factor in my retirement. I hope you aren't placing any faith in it either.

Banks are more concerned with their own viability. When the US has to borrow, Banks end up paying more for the money they use. The 'investment' potential is a minor factor, if any at all. There is PLENTY of money on the streets right now. Much of it in the hands of Banks - US Banks. Their concern is that money will leave. Or 'dollars' will be so devalued by the government printing money, that current investors won't want their assets represented by the 'dollar'. That result will devalue the Banks who represent their assets in 'dollars'.

Gold is approaching $1000/ounce. But applied to purchases it buys relatively the same hard goods valued in dollars as it did when at $300/ounce. Gold hasn't gained in value as much as the dollar has decreased. That is, and should be, concerning to Banks.

FDR's social programs didn't take the US out of the last great depression. WWII did. Social Security's problems can have the same cause, effect, and consequence.

~ Opinion with a VERY minor touch of first hand insider Bank experience.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:18:08 AM   
juliaoceania


Posts: 21383
Joined: 4/19/2006
From: Somewhere Over the Rainbow
Status: offline
quote:

Banks are more concerned with their own viability. When the US has to borrow, Banks end up paying more for the money they use. The 'investment' potential is a minor factor, if any at all. There is PLENTY of money on the streets right now. Much of it in the hands of Banks - US Banks. Their concern is that money will leave. Or 'dollars' will be so devalued by the government printing money, that current investors won't want their assets represented by the 'dollar'. That result will devalue the Banks who represent their assets in 'dollars'.


Every dollar that enters the system through the fed reserve has debt attached to it... sugarmychurro is absolutely right... at this point in time we are facing rampant inflation because too much money has entered the system through unstable loans. We maybe headed toward a depression. What would the answer be in this day and age if there was a run on the banks?


_____________________________

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:21:30 AM   
meatcleaver


Posts: 9030
Joined: 3/13/2006
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quote:

ORIGINAL: cyberdude611

Many banks are growing worried that the US has no plans to deal with a social security system projected to start running a deficit within the next 8 years. And to worsen the worries, some politicians want to expand welfare programs such as medicaid and medicare and provide healthcare coverage to 47 million Americans without much plan on how such an expansion would be paid for.

So will the liberals in here tell me how we are going to pay for MORE social services if we are not going to be able to pay for the ones we already had? It appears unless we cut these programs, we will run into bankruptcy.

http://www.ft.com/cms/s/0/fcc631cc-bfe6-11dc-8052-0000779fd2ac.html?nclick_check=1


I'm laughing my head off. Why don't the banks worry about deficits caused by spiralling military costs and the cost of dumb assed military adventures?

Oh I forgot. Killing people half a world away is necessary in the economic interests of America. Well I've got news for you, it ain't necessary for the welfare of ordinary Americans, just rich ones.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:27:17 AM   
SugarMyChurro


Posts: 1912
Joined: 4/26/2007
Status: offline
quote:

ORIGINAL: Mercnbeth
Banks are more concerned with their own viability. When the US has to borrow, Banks end up paying more for the money they use. The 'investment' potential is a minor factor, if any at all. There is PLENTY of money on the streets right now. Much of it in the hands of Banks - US Banks. Their concern is that money will leave. Or 'dollars' will be so devalued by the government printing money, that current investors won't want their assets represented by the 'dollar'. That result will devalue the Banks who represent their assets in 'dollars'.


Wow, one of the two of us doesn't understand the U.S. monetary system at all...




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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:35:24 AM   
Mercnbeth


Posts: 11766
Status: offline
quote:

ORIGINAL: SugarMyChurro

quote:

ORIGINAL: Mercnbeth
Banks are more concerned with their own viability. When the US has to borrow, Banks end up paying more for the money they use. The 'investment' potential is a minor factor, if any at all. There is PLENTY of money on the streets right now. Much of it in the hands of Banks - US Banks. Their concern is that money will leave. Or 'dollars' will be so devalued by the government printing money, that current investors won't want their assets represented by the 'dollar'. That result will devalue the Banks who represent their assets in 'dollars'.


Wow, one of the two of us doesn't understand the U.S. monetary system at all...



Yeah - I can pick apart my own post. The problem is isolating one facet of a very complex system. At the very least 'apples' compared to 'oranges'. Sorry about that!

I'll keep it a simple opinion. There are many reasons why the Banks are concerned about the US government's ability to pay their SS obligations. Getting the 'investment' funds is low on the list.

SORRY! More focused on it being Friday and planning for the play party we're attending tomorrow night than the US Banking system.

No more serious posts from me today!  

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 11:41:33 AM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		it is hard to have pity on the banks. --the federal reserve in NOT a federal agency. it is a private group of bankers. yet we accept that -no questions asked.

greed- it makes the world go round. with out it- bad things wouldnt happen [as much] with it- new exciting discoveries happen.

it is easy to throw rocks at the king and his court- it is much harder to challenge the status quo and be successful

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 12:18:03 PM   
juliaoceania


Posts: 21383
Joined: 4/19/2006
From: Somewhere Over the Rainbow
Status: offline 		If people were forced to invest in the stock market as opposed to somewhat relying on social security, it would be a huge boon for wall street. It was not long ago that Bush tried to pirate away our social security by privatizing it.... not long ago at all.

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Once you label me, you negate me ~ Soren Kierkegaard

Reality has a well known Liberal Bias ~ Stephen Colbert

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 12:31:17 PM   
Mercnbeth


Posts: 11766
Status: offline
quote:

 It was not long ago that Bush tried to pirate away our social security by privatizing it.... not long ago at all.
One person's "pirating" is another's opportunity. Had I access to the money I've put into SS over the past 10 years - I would be living somewhere in Tuscany today.

As it is, my relocation is deferred for a few more years and once I get there I have NO expectation of getting a SS check. Yet I paid, as you say "invested" plenty of money into it. To some - self determination works and is a goal.

PS - "Wall Street" is not synonymous with "Bank". Had you used "Wall Street" instead of banks when you said "The banks hate Social Security, which is NOT welfare. People pay into Social Security.. it is NOT a charity.... The banks want those investment dollars and they will say anything to get their hands on them... " we wouldn't be in disagreement.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 12:39:36 PM   
cyberdude611


Posts: 2596
Joined: 5/7/2006
Status: offline 		The theory behind social security when it was created in the 1930s was that it creates a fund where people who are working supports the people who are retired. So the younger generation supports the older generation. This worked for most of the 20th century and even during the 70s and 80s the Social Security system built up a lot of savings because of the baby boom. There were far more people paying into the system than the system was paying out. The reverse is going to be true in the next decade. Inflation has hurt the system. So the money the baby-boomers put in during the 60s is suddenly not worth as much. Plus the next generation has fewer workers. So over the next 10 years we are going to have more people off the workforce than people joining it. And that's why it is predicted in 2015 that the social security system will begin to run a deficit. More people will be taking money out than putting money in. And by 2040, it will be out of money.

So now comes the political debate. Democrats want to preserve the current system and fund it from other sources and raise taxes. The Republicans want to reform the system and privatize it. And neither side wants to compromise.
This is a 1936 system trying to work in 2010 with a much different type of population. We are living longer and cost of living has increased. The system needs some sort of reform.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 12:47:58 PM   
Leatherist


Posts: 5149
Joined: 12/11/2007
Status: offline 		This is the same issue we face with anyone who spends more than they actually have.

Just means you pass the debt on to the next fellow down the line. When was the last time you saw a balanced budget?

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 12:57:12 PM   
seeksfemslave


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Joined: 6/16/2006
Status: offline
quote:

ORIGINAL: juliaoceania
If people were forced to invest in the stock market as opposed to somewhat relying on social security, it would be a huge boon for Wall Street.

and not only that, should a stock market crash occur, eg UK about 2000, then you lose your pension with, if you are getting close to retirement no chance whatsoever of recovering the loss.
Same applies to home loans, capital repayment of which is dependant on a rising stock market.
Reading between the lines I think the American banking system is in serious trouble as a consequence of the " bad mortgage package" debacle.

Any run on a major bank will see the Central government creating money like madmen.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 1:05:32 PM   
seeksfemslave


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quote:

Mercbeth
As it is, my relocation(retirement) is deferred for a few more years and once I get there I have NO expectation of getting a SS check. Yet I paid, as you say "invested" plenty of money into it. 

Why? no SS payment on your retirement I mean.

If your assets are mostly in the banking system ie deposits bonds etc you might be "in" for a nasty shock !
Definitely not impossible. I mean lose lots in a crash.

adding:If it does happen and I most sincerely hope it doesnt then rising property prices stock value used as collateral to buy more stock, falling purchasing power due to job losses will be at the root of it. Just like the 30's really lol

< Message edited by seeksfemslave -- 1/11/2008 1:09:02 PM >

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 1:17:55 PM   
DomKen


Posts: 19457
Joined: 7/4/2004
From: Chicago, IL
Status: offline 		This is so funny it hurts.

Why are the banks nervous? Notice how they're involved in the stock market? Ever notice the steady spiralling up of the Dow and other averages the last 20 years or so? When did you first hear about a mutual fund? So what is going to start happening in 5 to 7 years when more and more of the baby boom generation stops putting money into the mutual funds through their IRA's and 401(k)'s? What happens when Magellans cash reserves are exhausted and the monthly checks they have to send out to the investors excedes what money is still coming in from payroll checkoffs? Selling off of stock to generate cash. Who is going to buy all those shares all those mutual funds will be putting on the market every month? How low will the market go.

Banks have to get the Social Security etc. money into the market under their control to prop up the market. Of course that won't work for long as the post baby boom generations are smaller and simply won't be able to pump enough cash into the market to equal what the booners are going to take out of it. But if the banks employeed long term thinkers we wouldn't be in this mess.

Basic supply and demand economics. We're not screwed because Social Security isn't fixed yet, we're screwed because Wall St. convinced an entire generation of the middle class to rely on the stock market for retirement income.

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RE: Banks: Welfare costs greatest threat to US economy - 1/11/2008 1:27:59 PM   
Lordandmaster


Posts: 10943
Joined: 6/22/2004
Status: offline 		Exactly.  Social security isn't welfare.  When I saw the title of this thread, I thought surely we were talking about CORPORATE welfare...

quote:

ORIGINAL: juliaoceania

The banks hate Social Security, which is NOT welfare. People pay into Social Security.. it is NOT a charity....

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