economics

Perhaps it’s because I am newly unemployed, or maybe not. However, today is a bit of a black pill day for me.

Reader BobF is angry that his money is gone. They took money from him for decades, and now there won’t be any left to pay the Social Security and the Pension that he was promised. I agree, it’s perfectly acceptable to be angry about that. Heck, when I first was told (by someone commenting on this very blog) that my pension was simply a way for public employees to screw the employers that had to pay them, I was pissed. I spent decades, working for less money than I could have gotten elsewhere, risking my life to EARN that pension.

The money is gone. They spent it. Like a dad who is angry because when you sent your kid off to college, you gave him your credit cards to use in the event of an emergency, and he maxed them all out on unnecessary bullshit, it’s our fault for giving them essentially unmonitored access to the credit cards. Yep, I said it- it is our fault for not watching what they were spending the money on. So now we have $200,000 in maxed out credit cards, and nothing to show for it. Except in this case, it’s $35 trillion worth of useless treasury notes, and a bunch of promises.

So yeah, everyone is getting screwed. Take a moment to let that sink in. Now feel the anger? You pissed off? Well, so was I, when I first began to realize just how fucked we are.

The time to complain about that was when the Congress spent DECADES throwing money around like a Frat boy with his dad’s credit cards. And yes, it was spent on bullshit.

• $190,000 by Senator Charles Schumer (D-N.Y.) for digitization of the New York Historical Society’s photo collection.
• $200,000 by Rep. Howard Berman (D-Calif.) for the Providence Holy Cross Foundation tattoo removal violence prevention program in Mission Hills.
• More than $220 million to build a bridge between Gravina Island, an island that was home to 50 residents at the time, and the Ketchikan Airport.
• Don’t think that the holy grail of the Republicans, the defense budget, was immune from this waste. Rep. Duke Cunningham (R-Ca.) resigned and pleaded guilty to accepting $2.4 million in kickbacks from military contractors for steering billions of dollars worth of defense budget dollars their way, using his positions on the Defense Appropriations subcommittee and the Intelligence Committee to insert earmarks for military spending.
• $500,000 in federal funding for the construction of a very unique museum in Sparta—a town that had a population of about 18,000—the Sparta Teapot Museum of Craft and Design.
• $14.8 billion to Boston for a tunnel (The Big Dig) that was the most expensive highway project in history.
• $3.4 million for a tunnel in Florida that would allow turtles to cross Highway 27 safely.

Decades of wasteful project after wasteful project, adding up to hundreds of trillions of dollars in spending. Every single President since Eisenhower has been a part of it. Who is blame? We are. We let them do it. Let the anger soak through you, then take a deep breath. Let it out. I agree with you. It sucks.

The money is gone. There is no way that it will ever be paid back. We owe more money than physically exists. That right- add up all of the money in the world: Dollars, Euros, Yen, Yuan, all of it. Now send it all in. That doesn’t even pay what the US owes, much less the debt of all of the other nations in the world. Now you begin to see just how fucked we all are. Yes, I am using the word “fucked” even though profanity is not used here very often. Why? Because no other word really begins to describe just how bad things really are.

There is no way out of this. The bill is going to come due, and we are the ones who will be stuck with it. That pension you are owed? Gone. The Social Security fund that took from you a third of every dollar that you earned for your entire working life? It’s been spent. I’ve been warning you about this since I figured it out, back in 2007.

Again, the time for us to have fixed this passed some time ago. I became an adult during the Reagan administration. It was probably already too late at that point. My generation inherited the problem, but we certainly didn’t even try to fix it. So yeah, I blame the Boomers (and my own parents, who were part of the silent generation) for creating the problem, but the generations since then certainly didn’t try to fix anything. That makes all of us responsible.

Lacta alea est. It’s too late to cry over spilt milk. You can be mad, but that is like the old man yelling at clouds: it doesn’t change anything.

All we can do now is try and save what we can, and in my opinion, all we can do is try and save our local area. Be ready, band together with as many like minded neighbors as you can, and try to weather the storm. Sauve qui peut.

Get skills. Stockpile tools, gear, food. Learn to garden. Plan. Make friends with neighbors who have complimentary skills. Stockpile stuff that you can trade to people with skills who may compliment your own. For example, extra guns for neighbors who may not have one. They can use it to stand watch while you sleep, or cover your backside.

It’s coming. We don’t know when, but at this point, it’s undeniable.

The owner anti-communist business who allows customers to pay what they want, when they can, is blaming the “lack of generational wealth and seed capital” for the closure of his business.

Translation: I ran out of other people’s money.

Where does he think that generational wealth comes from?

I swear, leftists don’t understand math, business, economics, or, well, anything.

Fuck the rich. Fuck the police. Fuck the state. Fuck the colonial death camp we call “Canada”,” Gabriel wrote.

This is what the Socialist leader of Canada has to say:

When we see that women’s participation in the economy has reached an all-time high, this much is clear: $10-a-day child care isn’t just good social policy, it’s also good economic policy.

— Justin Trudeau (@JustinTrudeau) May 14, 2023

I normally don’t post things from other countries, but many of our own political figures support stupid stuff like this. Let’s do the math:

If a mother wants to work an 8 hour job, she gets 30 minutes for lunch, plus time to get to and from work, so let’s call it 9 hours of child care per day. That also means the kid will have to be fed lunch, call it a cost of $5 for lunch. That leaves nine hours of child care for $5.

Then there is insurance, utilities, health insurance, and all other expenses, not to mention the cost of paying the childcare worker. Let’s assume that we are going to pay our childcare worker an average of $18 an hour. All expenses considered, this fictional daycare center will need to assign 65 children to each childcare worker in order for this to be feasible.

Math, it’s a thing.

The Democrats want to continue spending the US dollar into worthlessness. The Republicans are trying to get some budget cuts in exchange, but Biden is saying his way, or default. He is laying the blame on Republicans because he is refusing to budge. The solution, some on the left are saying, is to mint a $1 trillion coin, and deposit it with the Fed.

The idea is to mint a worthless coin that has face value of $1 trillion. That way, the coin has one trillion dollars of seigniorage, i.e. profit for government, and the coin could be deposited to Federal Reserve treasury instead of issuing debt. In other words, they would be issuing new money by debasing the dollar, without generating debt in their balance sheet. It’s like issuing one trillion worth of cash, which is backed with just one worthless platinum coin. It’s not really different from just issuing debt that isn’t paid back, but this way they don’t have to raise the debt limit. This would instantly insert an additional trillion into circulation, creating a massive amount of inflation. Shenanigans like this will completely erode the trust in the value of dollar and make the dollar worth much less nearly overnight. It’s like writing a worthless check to pay your monthly mortgage payment.

This will allow Biden to continue spending money like the dollar is going out of style, which of course it is. God forbid we should actually learn to live within our means.

Argentina is no longer buying foreign goods using US Petrodollars. They will be using the Chinese reminabi. The US Dollar is losing its position as the world’s reserve currency. The US economy is built on the Dollar being the world’s reserve currency. Our way of life, our nation, is in very serious trouble.

It is time to get rid of dollar denominated assets. Buy physical things.

• Real estate.
• Metals.
• Guns
• Ammo, food, consumables.

When the dollar falls, its purchasing power will disappear. Stocks, bonds, and bank accounts will become worthless.

The Biden administration has passed a new rule that charges people with good credit a fee, so that money can be used to subsidize people with bad credit. Anyone with a credit score of more than 680 will pay the fee, which will be used to lower interest rates for people with scores below 680.

I can’t even. When I showed this to my wife, she thought it was a Babylon Bee story.

News for homeowners in Florida who wish to have insurance is rough. Insurance companies can’t do business in Florida, mostly because of the high cost of hurricane damage. The average Florida homeowner is paying $4,231 for their property insurance: nearly triple the national rate of $1,544. Homeowners in Florida pay the highest rates of any state in the US. Those rates are set to increase in June by an estimated 40%, on average.

The state of Florida has a taxpayer funded insurance system for those who cannot obtain homeowners’ insurance from a private carrier. This carrier is called Citizens’ Insurance. One in five Florida homes is insured by that fund, and that number will continue to climb as insurers leave the state. Things can’t continue on this path.

Insurance is nothing but a dilution of risk. That is, the risk of damage to homes is spread out among all of the people who have insurance policies, and the premiums of everyone are used to pay the damages of those who have losses. The problem with diluting risk in Florida is that oceanfront homes are worth 50 to 100 times as much as homes located further inland. For every insured oceanfront home that is lost, the premiums of as many as 150 inland homes are used paying for the damages. Pick any coastal city in Florida and look at the home costs. A single family home on the oceanfront that sells for less than $1,000 per square foot is a steal. In Miami, single family oceanfront homes START at $20 million each.

Couple that with the fact that the vast majority of hurricane damage is within two miles of the coast. Insurance companies can’t charge $100,000 a year for insurance premiums, so they spread that cost amongst every homeowner in Florida. This can’t continue because it is mathematically impossible for the situation to stay as it is. Currently, I pay 1.5% of the value of my house each year to insure it.

If the state of Florida wants to fix the insurance problem in the state, they need to divorce the risk pool of oceanfront homeowners from the rest of the state’s homeowners. If you want to build and live in a $10 million home on the beach, fine. But make your insurance premiums 5% of the home’s value, but stop raising my insurance to cover for your house.