Perhaps the grandpas and grandmas that love the State so much will come around to my point of view after understanding what the Bernank has done to their crumby State run retirement program.
You see boys and girls, the entire system of socialist security is beyond bankrupt. The Fed knows this and so do all of the politicians. The only people who don’t know this appear to be the program’s recipients.
Now, because socialist security is the third rail of politics, everyone understands that there is no way for congress to actually dismantle the program through legislation. However, Bernanke, unencumbered by silly things like elections, has all the power he needs to decimate the program – and he’s working really really hard to make sure it becomes a worthless black void of doom.
Zero Hedge reports:
Bernanke has said dozens of times that he wants to boost inflation in his effort to lift stocks. He’s succeeded in pushing up the cost of things over the past year. Everyone is paying a price. Social Security is no exception. As it turns out, Ben’s policies have been hitting SS in a number of negative ways. Ben is driving up the costs over at SS and at the same time he is killing their interest income.
We get inflation numbers for September next week. This is an important data point for some 55 million recipients of Social Security checks. On the assumption that there is no (little) change in the MoM numbers the CPI-W will come in at 223.4. This number is used to calculate the average for the fiscal 4th quarter. The result is then compared to the 2008 fiscal 4th Q. My numbers:
This is not good news at all for the folks at SSA. The COLA increase will add $25+ billion onto the existing expense base for 2012. On top of that there will be the increase in the total number who receive monthly checks (SS is getting 10,000 new beneficiaries every day). In 2011 the new (minus dead) beneficiaries added $25b to the cost of running the program.
The question to ask is, “What does this do for SS?” The answer is, “Nothing good“.
To make an assessment of what 2012 will look like it is necessary to make some assumptions on what will happen in the real economy, and most importantly, what will happen to total employment.
Bruce goes on to lay out his entire financial argument using more examples.