The pension problem is not well understood by the general public or the media. Neither will I claim to be an expert, but for those who are unaware, a pension is a payment plan made to retirees in return for past work and contributions to the plan. While many defined-benefit pensions plans have now been replaced by 401k-type tax-deferred government plans (defined contribution plans), much of the work force, including government bureaucrats, is retiring on defined-benefits, and these plans are woefully underfunded. Addressing these shortfalls has been avoided and postponed over the past several decades. Many pensions operate on the assumption of consistent 8% returns, which is obviously not sustainable. The consequences include a projected $1,400 annual increase in Pennsylvania state taxes by 2012-2013 in order to compensate on state pensions per the Commonwealth Foundation. Private sector pensions shortfalls will have a direct effect on retirees as well.
While those in younger generations may shrug their shoulders believing the pension problem will not directly effect them, to the contrary, I predict this may become a prime source of political and social unrest and generational strife as the Baby Boomer generation attempts to retire. This is IN ADDITION to the $85 trillion in unfunded liabilities in the Medicaid plans, and $17 trillion in unfunded liabilities for social security. In the bailout era, choose your politicians wisely – this is no time for Republocrat bickering, the times approaching require statesmen and stateswomen willing to listen and able to make tough decisions and effectively solve problems…. in other words, we need to fire both the federal and state congresses.
In this week’s much anticipated State of the Union address, President Obama again demonstrated his poor understanding of the fundamental problems that confront our nation. By following the advice of the same people who helped guide our economy to the precipice of total collapse, Obama now threatens to push it over the edge.
Notwithstanding his well crafted lip service regarding future spending restraint, the essence of his current program is for more government spending and larger deficits. For all his talk about job creation, his policies will further burden those who might otherwise create those jobs with higher taxes and more regulation. While he did call for tax cuts for the middle class and offered what amounts to bailouts for those struggling to repay student loans, such cuts do nothing to promote growth in the near term and will add to the deficits in the long term.
The President spoke optimistically about the future, but in reality there is little evidence to support such an upbeat outlook. He began his speech by assuring us that the worst of the storm had passed. General Custer may have said something similar when the first wave of Indian attacks ebbed at Little Big Horn.
While Obama did have some harsh words for Wall Street (not exactly a courageous political stance), he leveled no criticism at the Federal Reserve or other government agencies that had financed and guaranteed all the ridiculous real estate speculation that precipitated the crash. And while he at least conceded that the prosperity of the last decade was based on illusions, he continued to endorse the very policies that produced the mirage in the first place.
The Supreme Court issued a ruling last week on the campaign finance that is still being discussed all over the country. In fact, it was even mentioned by President Obama at Wednesday night’s State of the Union address. The high court invalidated its own 20-year-old ruling — which had upheld a one hundred-year-old statute on group political contributions — and it also invalidated a portion of the McCain-Feingold Campaign finance law.
The 20-year-old ruling had forbidden any political spending by groups such as corporations, labor unions, and advocacy organizations (like the NRA and Planned Parenthood, for example). Ruling that all persons, individually and in groups, have the same unfettered free speech rights, the court blasted Congress for suppression of that speech. In effect, the court asked, “What part of ‘Congress shall make no law…abridging the freedom of speech’ does Congress not understand?” Thus, all groups of two or more persons are free to spend their own money on any political campaigns and to mention the names of the candidates in their materials.
The Judge later appeared on Fox Business News with David Asman to discuss the topic. Check it out below. It appears that Justice Alito’s “Not true” was more right than the snake oil salesman Obama would ever admit.
by John Browne – Senior Market Strategist, Euro Pacific Capital
As a former army parachutist with a bad head for heights, I recall standing in the doorway of an aircraft while my jumping instructor shouted: “Don’t look down!” He understood that my unease with parachuting combined with the sight of thousands of feet of open air could be enough to elicit panic. Many investors in today’s American stock and bond markets appear to be getting the same advice. While in my predicament, I had a parachute and a rudimentary understanding of how to use it, I fear that American investors have nothing to break their fall.
Looking down from the lofty nominal heights of today’s American stock and bond markets, there is cause for real concern.
Today I spent part of my day at a local small family-run business, and listened to the owner gripe about excise tariffs on equipment from abroad, immigration difficulties, and frustration about the redistribution of wealth from his business to the federal government’s warfare and welfare programs. As I was leaving to make another house call and visit a single mother of three children, he had one request which was to listen to the 1970 song “Monster” by Steppenwolf. The ending of this song is an appropriate lead-in to my comments on today’s State of the Union address (transcript here).
While his oratory skills are to be admired, President Obama assumed the role of a master central planner where the government must intervene or else the economy fails. The key planners in any market economy should be individuals, not the government as I learned while living in China. Obama made no mention of the true root cause of the depression – the excessive money-printing and credit expansion of the Federal Reserve. There was no mention that government bailouts, stimulus plan spending, and interventions have changed what would have been a sharp and brief recession into a prolonged depression. There was no mention that bank balance sheets are still impaired by billions of toxic assets and deficit spending in all areas of government is out of control.
IMPORTANT UPDATE:Jim DeMint’s office is making efforts to correct his bill. DeMint does support a full and complete audit. A spokesman for Senator DeMint has posted a comment on Donny Shaw’s article explaining there was a drafting error:
Thanks for giving me the chance to update your readers. The bill you refer to, which was intended to be identical to the Sanders-DeMint bill (S.604), was placed on the Senate calendar so Senator DeMint could press for an up or down vote to audit the Fed. Unfortunately, the bill contained a drafting error which we are quickly working to correct. The correct bill language should appear online within the next day or two and will mirror S.604, which Senator DeMint strongly supports and will fight to be debated and voted on in the Senate.
-Wesley Denton, spokesman for Senator DeMint
Original Article is below this line:
Jim DeMint co-authored a Wall Street Journal editorial with Ron Paul highlighting their desire for a full and complete Federal Reserve audit. Jim DeMint was the first Senator to cosponsor Ron Paul’s Fed Audit bill in the Senate, introduced by Bernie Sanders (S.604). Now, from the looks of it, DeMint may be capitulating on his original desire to “open the Fed up to a complete audit“.
On January 20th, DeMint introduced S.2939, a bill that looks like an audit on the surface, but is missing the important language that repeals the exceptions for auditing foreign central bank transactions, monetary policy decisions, and open market committee transactions. This appears to be another watered down bill that undermines the entire purpose of the audit.
This is troubling news for Fed watchers. I’ve passed along this information to the Campaign For Liberty. Let’s hope this development is one of those things that just seems bad but turns out good in the end. This is the first indication from DeMint that he may not be fully on-board with a complete audit.
Congressman Ron Paul talks about Tim Geithner’s testimony at the January 27, 2010 hearing on AIG. Even though Dr. Paul received unanimous consent to question Geithner during the hearing, time was cut short and he was not able to do so.
Ron Paul appeared today on CNN to discus Obama’s State of the Union speech tonight. This was another excellent appearance from Paul where he hones in on the problems as he usually does, but also offers things that can be done to help fix our problems.
It ends with Paul being asked what he would say to Obama to help get the country on the right track.
“I wanted you to see what real courage is, instead of getting the idea that courage is a man with a gun in his hand. It’s when you know you’re licked before you begin but you begin anyway and you see it through no matter what. You rarely win, but sometimes you do.” – Harper Lee from “To Kill a Mockingbird”
Today the incumbent released some startling numbers from a recent poll paid for by his campaign. The results: Towne 8%, Republocrat A 53%, Republocrat B27%. Scott Kraus of the Morning Call reported my total as “stunningly high” and he is correct – it is a tribute to both the hard work of the campaign’s volunteers in spreading the message so far, and the growing discontent of the district with the Washington, DC establishment. This is impressive since it is still quite early in the election season, and I have not been able to spread the message to a high amount of residents just yet – we obviously have 92% left to cover – and I have not yet even begun to fight.