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Home / Breaking News / Baby Boomers Pensions Owed by U.S. May Result in Economic Tidal Wave if U.S. refuses to pay
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Baby Boomers Pensions Owed by U.S. May Result in Economic Tidal Wave if U.S. refuses to pay

Peter Palms 
RINF Alternative News

After 45 years of collecting premiums for their pension plans, which the government refers to as “Social Security,” Baby Boomers become aware that while normally with contracts for future obligations of this kind the issuer is required by law to accumulate money into a fund to make sure that there will be enough available when future payments become due, the federal government did not abide by those laws. The funds exist on paper only. The money that comes in for future obligations is immediately spent and replaced by a government IOU. So, as those future payments come due, all of the money must come from revenue being collected at that time. Now the government says they have spent the money and can’t honor the I.O.U. Herein lies the doomsday mechanism. These obligations will be paid out of future taxes or inflation. Entitlements currently represent 52% of all federal outlays, and they are growing at the rate of 12% each year. When this is added to the 14% that is now being spent for interest payments on the national debt, we come to the startling conclusion that two-thirds of all federal expenses are now entirely automatic, and that percentage is growing each month.

Even if Congress were to stop all of the spending programs in the normal budget–dismantle the armed forces, close down all of its agencies and bureaus, stop all of its subsidies, and board up all of its buildings, including the White House–it would be able to reduce its present spending by only one-third. And even that small amount is shrinking by 10 to 12% per year. That is a best-case scenario. The real-case is that Congress is accelerating its discretionary spending, not canceling it. One does not have to be a statistical analyst to figure out where this trend is headed.

The biggest doomsday mechanism of all, however, is the Federal Reserve System. It will be recalled that every cent of our money supply–including coins, currency, and checkbook money–came into being for the purpose of being lent to someone. All of those dollars will disappear when the loans are paid back. They will exist only so long as the debt behind them exists. Underneath the pyramid of money, supporting the entire structure, are the so-called reserves which represent the Fed’s monetizing of debt. If we tried to pay off the national debt, those reserves also would start to disappear, and our money supply would be under-mined. The Fed would have to scramble into the world money markets and replace U.S. securities with bonds from corporations and other countries. Technically, that can be done, but the effect would be devastating. Congress would be fearful to eliminate the national debt even if it wanted to.

Debt Ceiling is an Illusion

Congress passed the Monetary Control Act of 1980 which authorized the Federal Reserve to “monetize foreign debt.” That is banker language meaning that the Fed was now authorized to create money out of nothing for the purpose of lending to foreign governments. It classifies those loans as “assets” and then uses them as collateral for the creation of even more money here in the United States. That was truly a revolutionary expansion of the Fed’s power to inflate. Until then, it was permitted to make money only for the American government. Now, it was able to do it for any government. Since then it has been functioning as a central bank for the entire world.

http://peterPalms.com

  • Norma

    I don’t know who you’re working for Peter Palms, but you’re dead wrong!

    The Soc. Sec. has been contributed into by the next generations coming into the work force, and the others after that, NOT just the “Baby Boomers!” Not only have they played by the rules…set up by FDR in the first place, but the people have done it with the inflated costs.

    The reason there’s a scarcity is because the Feds/1% have their sticky claws into the till!
    The Elite have robbed us!

    Do your homework, and stop parroting the phrases from the Corp. Mass Media!

  • SYnick46

    I really, really wish people would read the text of the Social Security Act before making stupid statements about how the money is supposed to go into a trust fund.

    WRONG!

    The money has ALWAYS gone into the General Fund, as the law states it must. The Trust Fund is just a small component for yearly appropriations leftovers.

  • Mr. Jonz

    I think SS was an experiment to see how many times the government can tax the same dollar before people notice.

    1. You pay income tax on your SS tax. That’s two times.
    2. You pay tax on your SS benefits unless you live in abject poverty. That’s the third time.
    3. Since the criminals in DC stole the money they will tax you again to make up the “shortfall.” That’s the fourth.

    Great deal for the government. Not so much for their subjects.

  • Fred Green

    Stop calling these “entitlements”, they are “pre-paid benefits”. Using the word “entitlement” insinuates that people will be getting benefits at little or no cost.

    Scrap the cap on Social Security contributions and cut future benefits by 10%.

  • carroll price

    The money may not be worth anything, but rest assured that there will never be a time when the US stops paying Social Security benefits, because they can always print enough money to cover the checks.

    • farang

      That’s correct carroll price, and that is why the Fed has an officially-stated policy target of 2% yearly inflation: they want to monetize the debt and give us back our money at 80% less value (2% inflation x 40 year average work for lifetime).

      SYnick46: you are also correct, and I think the misunderstanding most of us have about the Trust Fund comes from the Gore-Bush presidential debates, where Gore stated he “would” (not “did”, not “continue”, but “would”, implying they did not CURRENTLY do so) make certain our FICA went into a Trust Fund, and then Bush countered in debate with SAME PROMISE.

      Leaving anyone watching with the distinct impression Bush would place our FICA in a TRUST FUND.

  • Stan

    Even though that money is no longer available the iou’s are backed by the full faith of our government. Wow that makes me feel sooo much better. Even if the money was there it would still just be a pile of paper.
    True value does not begin or end with the local government issued currency……..

  • David Mende

    My beef is military and government/gov contractor double-dippers. SocSec should limit payouts to $2000/mo for individuals, and $3400/mo per household. All pensions count, and after this amount SocSec is cut to that total amount. SocSec is NOT for the rich. You paid to support the aged poor of your time. Others will pay to support you. AND if you have over $1000,000 in assets, after $250,000 homestead, you get no SocSec.// Howdya like them apples? I think it could work. The more rich people we have, the less SocSec will have to pay out. (Also, tax ALL income for SocSec.)

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