Wednesday, May 14, 2014

Stressed Out


"Is there an unholy alliance between the Fed and our Treasury? Seems there might be..."
Could you imagine going to the doctor when you knew something was seriously wrong with you and have the doctor tell you anything just to make you feel better? Instead of the truth, and what treatment is needed, the doctor would just blow sunshine at you. As long as you left the doctor's office feeling okay was the important thing - if you were cured or not, did not matter.
Tax cheat (alleged) Timothy Geithner is out with a new book called Stress Test. I have not read the book, but have read bits and pieces of it. It is not a "tell all" book on his former boss (BHO), however, he does blow the (dog) whistle on Senior White House Advisor Dan Pfeiffer. It seems that before a media event, Mr. Pfeiffer advised Timmy not to tell the whole truth about Social Security. As our Treasury Secretary, he was to tell the nation that Social Security does not add to the debt or deficit. By saying that, it would be a "dog whistle" to the union base of the Democrats that the White House was not going to allow the biggest Ponzi Scheme in American history (Social Security), to be tinkered with.
Instead of the doctor telling you to quit smoking and get a chest X-ray, Dr. Geithner was to tell the patient to take two aspirins and call him in the morning. After all, this entire debt and deficit thing was blown way out of proportion by nefarious, panic merchant Republicans. Our Administration has done an excellent job in  sidestepping the tough choices on the mushrooming debt, and only has two more years to play the shell game. I guess when you confirm someone at Treasury who would cheat on his taxes (allegedly), that person will also cheat the American people out of the truth.
So I guess it is up to me to once again tell the truth:
  • Our national debt is $17.5T and climbing. In four years it is estimated to be $20T.
  • Our Social Security liability alone is $17T, and expected to be $20T in four years.
  • In 2008, just before the "changing of the guard", our debt was $10T, with our Social Security liability at $6.7T. Barry has done a great job in watering this plant.
  • The "too big to fail" issue with the banks in 2008 is still with us today. The "3% ratio" of cash or liquid assets on hand that banks had in 2008 is still with us today. Many economists thought the 3% was a trigger which caused the Great Recession. The Fed, along with Treasury has kept us in the risky territory of 3% or less.
  • The total or the Medicare (including Part "D") and Social Security unfunded liabilities is almost $130T. Left untreated, in four years is will be close to $160T. This will kill the economy.
Even though many people I have talked to have been almost giddy at the return on investment they are seeing in the phony stock market, I am still holding up the red flag. Even though Dr. Geithner has told us our nasty cough is just a minor chest cold, we still have a cancer that needs to be dealt with. In 2014 and 2016, we need to change doctors.

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