Daily Digest

Daily Digest 7/20 - Moody's Mulls 5 State Downgrade, College Presidents' Paychecks Raise Brows, Why Your Water Bill Just Went Up

Wednesday, July 20, 2011, 9:42 AM
  • Japan beef prices plunge amid concern about contamination
  • Rising food prices lift UK grocery sales - Kantar
  • Moody's mulls downgrade on five states
  • Only Germany can save EMU as contagion turns systemic
  • Greece debt: Merkel dampens expectations of deal
  • Portugal's Prime Minister Pedro Passos Coelho discovers 'colossal' budget hole 
  • North Texas School District to Charge Students For Riding Bus
  • Some federal workers more likely to die than lose jobs
  • College presidents' paychecks raise brows
  • Compton faces possible government shutdown amid budget woes
  • US backup debt plan doesn't support rating - Moody's
  • UC Riverside to Cut Positions to Help Close $46 Million Gap
  • The Garland County Sheriff Shuts Down Electronic Bracelets
  • Glendale’s efforts to keep float in Rose Parade coming up short
  • Your water bill just went up. Here's why
  • State Land board may double grazing fees
  • Back-to-School Shoppers Face Higher Clothing Prices
  • Pennsylvania road fund plan could cost truckers $500 more per vehicle

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Economy

Japan beef prices plunge amid concern about contamination

Japanese beef prices plunged over 50% in Tokyo trading Tuesday amid widespread anxiety over the exposure of cows to radioactive cesium, Kyodo News reported.

The average price of Japanese beef stood at Y607 per kilogram in the Metropolitan Central Wholesale Market, down from Y1,414 on Friday and marking a sharper fall than seen following the outbreak of mad cow disease in September 2001.

Rising food prices lift UK grocery sales - Kantar

Growth was driven by a stronger-than-expected rise in grocery price inflation, which is close to 5 percent. "While we previously predicted that grocery inflation would not exceed 5 percent in 2011, we believe this no longer to be the case," Kantar said.

Moody's mulls downgrade on five states

Moody's Investors Service placed its ratings on five Aaa-rated states on watch for downgrade, saying if the U.S. government's ratings were to be lowered, those states would face probable cuts as well.

The ratings agency's action on Maryland, New Mexico, South Carolina, Tennessee and Virginia affect a combined $24 billion of general obligation and related debt. It follows Moody's announcement last week it would consider a downgrade on the U.S. government's bond rating, citing the "rising possibility that the statutory debt limit will not be raised on a timely basis," which would lead to a default on U.S. Treasury debt obligations.

Only Germany can save EMU as contagion turns systemic (Ambrose Evans-Pritchard)

Europe's leaders have finally run out of time. If they fail to agree on some form of debt pooling and shared fiscal destiny at Thursday's emergency summit, they risk a full-fledged run on South Europe's bond markets and a disorderly collapse of monetary union. "We are heading towards fiscal union or break-up," said David Bloom, currency chief at HSBC. "Talk is no longer enough as the fire threatens to leap over the firebreak into Spain and Italy.

"What the market is worried about is Germany's long-term committment to the euro project. If we see unreserved and absolute backing from the political establishment of Germany, that will be a soothing balm." Chancellor Angela Merkel seemed in little hurry on Tuesday to convey such a message.

Greece debt: Merkel dampens expectations of deal

German Chancellor Angela Merkel has played down the chances of Thursday's emergency eurozone summit resolving Greece's debt crisis. She told a news conference that there would not be anything as "spectacular" as a restructuring of Greek debt.

The meeting will attempt to agree a second bail-out of Greece in a hope of calming financial markets and stop contagion spreading. She said: "Thursday will help in this, but further steps will be needed."

Portugal's Prime Minister Pedro Passos Coelho discovers 'colossal' budget hole (Ambrose Evans-Pritchard)

Portugal's new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a "colossal" €2bn (£1.7bn) hole in the public accounts left by the outgoing Socialists.

Yields on two-year Portuguese debt rose to a fresh record of 20.3pc on Monday, reflecting fears by investors that the country would struggle to pull itself out of downward spiral without some form of debt restructuring.

North Texas School District to Charge Students For Riding Bus

Students eligible for free and reduced lunch are $100 each.The school district plans to start charging parents because its $200 million budget will have to be slashed by $30 million next school year. That’s a 15 percent cut.

Some federal workers more likely to die than lose jobs

The 1,800-employee Federal Communications Commission and the 1,200-employee Federal Trade Commission didn't lay off or fire a single employee last year. The SBA had no layoffs, six firings and 17 deaths in its 4,000-employee workforce.

College presidents' paychecks raise brows (California)

Literally moments after the system's Board of Trustees announced that it was going to increase next fall's tuition by 12 percent, an additional $294 a semester, the board turned around and approved a salary of $400,000 for the new president of San Diego State, Elliot Hirshman -- $350,000 in state funds and $50,000 from the campus's foundation -- a bump of more than $100,000 from what his predecessor made last year. "There's never a good time to raise presidents' pay," said Michael Uhlenkamp, a spokesman for the Cal State system. "But when there are immediate needs, whether taboo or not, we have to fill them."

Compton faces possible government shutdown amid budget woes

The city's fiscal situation is dire. Its general fund has been running deficits for the last three years. The city’s independent auditors, citing the deficits and “liquidity problems,” have questioned the government's ability to remain solvent. According to a report provided by the city, Compton’s general fund ended the latest fiscal year with a deficit of about $23 million, equal to about 40% of the city’s budget for the period. The deficit was inflated by $11.6 million because money was transferred from the general fund to pay off an accumulated deficit in the city’s general liability fund.

US backup debt plan doesn't support rating - Moody's

.S. government backup debt plan to raise the country's debt ceiling and avoid imminent default could still lead to a downgrade of U.S. ratings in the next year or so, Moody's said on Tuesday.

Senator Mitch McConnell's "Plan B," increasingly seen as a "Plan A" in Washington, would avoid any immediate downgrade of the coveted U.S. triple-A rating, Moody's analyst Steven Hess told Reuters in an interview.

"But the numbers that are being discussed in terms of any possible deficit reduction coming out of this plan don't seem to be very large," Hess said. "Therefore this plan might result in a negative outlook on the rating."

UC Riverside to Cut Positions to Help Close $46 Million Gap

A $46 million budget shortfall will require "dozens" of job cuts at UC Riverside, campus officials said today.

Last week, the UC Board of Regents approved a 9.6 percent boost in student fees, which followed an 8 percent increase ratified by the regents last summer. The total 17.6 percent spike in tuition will be absorbed by students beginning this fall. The regents justified the increases by pointing out that, between 2008 and 2011, lawmakers had chopped appropriations to the UC system by 27 percent, from $3.25 billion to $2.37 billion.

The Garland County Sheriff Shuts Down Electronic Bracelets

The garland county sheriff is shutting down its electronic monitoring program for convicts out of budget concerns.

Officials with the sheriff’s office say the program that allows inmates to be released and their movements tracked has run out of funds. Deputy Judy Daniel says sheriff Larry Sanders had no alternative but to stop the program.

Glendale’s efforts to keep float in Rose Parade coming up short

The public appears unwilling to maintain Glendale's float as the second-longest running entrant in the annual Tournament of Roses parade, having donated just $596 toward a $50,000 fundraising goal set by city officials.

If the goal isn't reached by the end of this month -- the deadline for signing a $99,000-float construction contract -- Glendale likely will be forced to withdrawal after 97 years of participation in a parade watched by millions around the world, the Glendale News-Press reported. Facing a projected budget deficit of $18 million, the City Council voted to scrap its subsidy of at least $80,000 for the float unless the community pitched in $50,000.

Your water bill just went up. Here's why (Philadelphia)

Water rates go up 5.9 percent beginning this month in Philadelphia. The August bill will reflect the higher charges.

The new rates enable the Water Department to meet its obligations under the City Charter of having a balanced budget through June 2012 and to pay for the higher costs associated with providing drinking water and improving stormwater runoff programs.

State Land board may double grazing fees (Montana)

The State Land Board is considering raising the price of grazing leases in Montana, and some Montana ranchers aren't happy about the plan.

One of them is Dillon rancher Jim Hagenbarth, who has been grazing his livestock on state land for over 70 years. Every dollar he pays the state for his grazing leases supports public education in Montana.

Back-to-School Shoppers Face Higher Clothing Prices

Wendy Stanphill is trying to keep a lid on her back-to-school budget. "It's a little smaller, a little tighter with everything going up," said Wendy Stanphill, who was shopping with her two little girls at Target at the Shops at Trace Fork. And anything made with cotton is going up.

"With world prices being what they are, prices with inflation, demand on product in other emerging markets affect the price of cotton," said Dale Haynes, manager of the Charleston Department Store. Many retail and apparel makers across the country are looking to raise prices 10 to 15 percent for cotton-made products. That includes jeans and shirts, which are popular back-to-school clothing. But not all retailers are following suit.

Pennsylvania road fund plan could cost truckers $500 more per vehicle

Gov. Tom Corbett's transportation funding commission on Monday endorsed a mixture of revenue sources to generate about $2.5 billion in additional annual spending for Pennsylvania's roads, bridges and mass transit. It was projected to cost trucking companies more than $500 per year for each tractor-trailer.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

29 Comments

saxplayer00o1's picture
saxplayer00o1
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rhare's picture
rhare
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What does it mean to be poor in America?

Here is an interesting read discussing the definitiion of "poor" in America:

What is Poverty In the US Today?

For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population. Poverty remains an issue of serious social concern, but accurate information about that problem is essential in crafting wise public policy. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem.

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Poet
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Heritage Foundation
rhare wrote:

Here is an interesting read discussing the definitiion of "poor" in America:

What is Poverty In the US Today?

Yes, that's the Heritage Foundation's definition. And of course, by many counts, especially compared to Third World countries, America's poor are pretty well off. Mostly because their lifestyel is currently supported by government programs.

Of course, if such programs go away or are significantly reduced, then poverty will become a major issue in America.

The Federal poverty level for a family of four is roughly $22,000. Raise that to $25,000 for a family of four (adjusted down for smaller families and singles) and about one third of Americans would fall into that range.

Do you think you could adequately on $22,000 for a family of 4, Rhare? If so, how would you spend it? I'd love to see you set a budget, Rhare. :)

Poet

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Rector
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Sounds like a disease. . .

I had discussing poverty as if it were a disease.  Any chance it is a self-imposed hardship?  Or is it my fault that people exist in poverty?

I would propose to you that the majority of people in poverty are there because of poor personal choices, poor work ethic, personal discipline, and occasionally circumstances beyond their control.  The poor "will always be with you."  Social safety nets are a good idea, and can serve a necessary role in our society.  We can afford it, and its the right thing to do.  However, creating and sustaining a system of government dependency is destroying the very people we are trying to "help"

Our nation is enormously generous to the "poor" as a quick trip to any third world country will demonstrate. Lots of Americans have worked their way out of poverty.  I didn't try to set up a budget for a family of 4 on $22K.  I worked to fix the income side of the equation and did it.

People are responsible for their own economic well-being and have the opportunity to win and lose.  Making us all losers has never worked and won't start now.  The entitlement mentality and the well-meaning fools that promote it alongside the class warfare hustlers are one of the things that have created our current condition.  

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littleone
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Going deeper...

Rhare,

Good point.

Going deeper...

The standards for receiving social services often require many modern amenities...an address to have paperwork, checks, or medical cards sent. A phone or transportation for an eligibility interview.

To make a long story short...

My mother was homeless with my youngest sister for many years and it was terribly difficult to receive help.

Let me start off by saying that the documentation required, and the privacy given up, is enormous.

Everytime my mother thought she had all the required paperwork submitted, the state would request additional documentation. To take the bus or walk miles in shoes that do not fit, copy and fax paperwork(or mail it and wait) with no money, or job, or home is a humiliating burden...and one can be fined or jailed if one tries to live off the land(fish with no license).  Many social service departments are split-up into so many exclusive divisions that one cannot find out what is going on with a case or letter unless one calls all the divisions:

You call about a billing letter...you call the number on the letter...they tell you you have reached the eligibility dept. and to call billing... then billing tells you even though you are calling about a bill they have no information/history on billing decisions...you need to call the admin. dept(and often the wait to talk to someone is 30 min. to an hour for any dept.) ...finally you find out who you need to talk to...they are not available; leave a message. If you have no phone, the whole run-around is pointless. And all those people you talked to just got paid, but what service was provided? *Especially if the billing letter was sent out in error. No one knows what the other or counterpart is doing!

For those in true dire need there is a waiting list...the system itself does not care. The system is not conscious of all its total actions. 

I have had similar experiences(the run-around) talking to state or gov. office employees.

And what about the next generation?...most versed in technology and least likely to afford it.

 

Note: My mother was not in contact with me during those events.

 *edit added sentence

-littleone

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rhare
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Perception of poor versus reality
Poet wrote:

Yes, that's the Heritage Foundation's definition. And of course, by many counts, especially compared to Third World countries, America's poor are pretty well off. Mostly because their lifestyel is currently supported by government programs.

Hmm, so much for that open mind since the first thing you do is question the source, not the content. Wink

However, you will note that the definition of poverty was from the US government.  The article I believe was very accurate in discussing the perception of poor in the US versus the reality. What most people picture as poor (problems with adequate shelter and food) applies to a very small percentage of the population - yet many of our current policies and programs do not address those concerns, but rather benefit many whose idea of poor is they don't have an X-box.

Poet wrote:

Mostly because their lifestyel is currently supported by government programs.

Since when is it government's responsibility to support a lifestyle?  So much for the safety net concept.  As we face dwindling resources we are going to have to make some hard choices about whom to help.  We will be cutting spending, don't you want us to have an accurate assessment of the situation, or just continue with the talking points of math impaired?

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rhare
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The truely poor suffer from bad data and the welfare state
littleone wrote:

For those in true dire need there is a waiting list...the system itself does not care. The system is not conscious of all its total actions.

That I took was actually the point, we have built a giant bureaucracy of government agencies focusing on 30% of the population instead of focusing on the truely needy.

[quote=What is Poverty In the US Today?]

Nonetheless, wise public policy cannot be based on misinformation or misunderstanding. Anti-poverty policy must be based on an accurate assessment of actual living conditions and the causes of deprivation. In the long term, grossly exaggerating the extent and severity of material deprivation in the U.S. will benefit neither the poor, the economy, nor society as a whole.

Quote:

 

Another example of the deceptive practices of math impaired progressives?

The Federal poverty level for a family of four is roughly $22,000. Raise that to $25,000 for a family of four (adjusted down for smaller families and singles) and about one third of Americans would fall into that range.

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Rather than taking sides on

Rather than taking sides on the poverty issue, what will happen in 20 years when the world is only pumping 50 million barrels of oil / day?  At some point in time the productive members of society will no longer be willing or able to support the non-productive members.  In Crash Course Chris talks about having an adult conversation and dealing with the declining carrying capacity of this planet.

Nate

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littleone
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There are really no sides to

There are really no sides to take. The system is supported by human resources. When there are not enough jobs(like Arizona state having only 1 job for every 10 unemployed), the unproductive members of society are becoming the unemployed, not the unwilling.

Do we consider other human beings a waste, instead of seeing a system that forces people to use people is not going to work and subject to heavy fraud and coercion?

As far as dealing with the earth's carrying capacity, I hope the haves realize their man-made fortune did burden poor with help that was dependent on building a bigger system of dependence for all. 

see Ricardo's Law ~ The Great Tax Clawback Scam

The earth is the source of resources that humans consume...and all of earth's life gives that it may live, there is no deserving or undeserving.

-littleone

saxplayer00o1's picture
saxplayer00o1
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Obama calls new crisis debt talks

 

"With an August 2 deadline looming, White House spokesman Jay Carney said Obama would accept a short-term deal to raise the debt ceiling but only to buy time as part of a broader arrangement to slash the ballooning US deficit.

 "We would not support a short-term extension absent an agreement to a larger deal," he told reporters, adding "if both sides agree to something significant, we will support the measures needed to finalize the details of that.""

debt

 

"The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government's $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.

Philadelphia Federal Reserve Bank President Charles Plosser said the Fed has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2.

"We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. "We are all engaged ... It's a very active process.""

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welfare comments

Seems to me that the various gov't welfare programs are just as much a "jobs program" for substandard ill-motivated bureaucrats as they are a source of succor for the truly needy.  Yes I understand they are not all lazy morons...but before I'm blasted for my generalization...consider your local DMV, DOL, whatever.

One of my other problems with (especially federal) government welfare programs is sort of a variation on Hazlitt...the notion of "monetary friction".  There are going to be "losses" in a system which receives an income, processes it, and redistributes it.  I don't recall the estimated percentage of welfare budget that goes into gov't administrative overhead, but it is not in any way trivial...why exactly could this not be handled better at a local level?  Why exactly does the gov't need to be deeply involved at all?

Another one of my problems with the Lyndon Johnson paradigm is...I'm forty-something.  I'm being held accountable for a social contract that was inked and signed on my behalf by my elders to their exclusive benefit.  I'm paying for the "me" generation's screwups!  I absolutely refuse to pass that particular buck to my kid on this...this...generational indenture on behalf of a (on aggregate) self-centered narcissistic glut of ex-hippie boomers who think long life and golden retirement are some sort of natural right versus the backwards-flowing eddy in entropy it really is.  

If I sound bitter, please consider it a personal defect.  I am not, however, alone in my thinking, and I think that most pissed-off "gen-xers" and younger are not going to be able to articulate their unhappiness or even fully understand it but will rather act upon it...with the potential for truly unhappy consequences.  It would be much better, imo, to work the problem right now, with realistic expectations brought to the front and acknowledged by all.  This most definitely must include a radical and immediate rethinking of who owes who how much (i.e., benefits reductions / means testing / elimination of gov't waste (or overhead if you prefer) / etc.).  What is going on in congress does not even come close in my view.

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Damnthematrix
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living in poverty

[quote=PoeDo you think you could adequately on $22,000 for a family of 4, Rhare? If so, how would you spend it? I'd love to see you set a budget, Rhare. :)

Poet

Actually.......  two of us live on less than $18K.  We even pay our mortgage on that!  To be fair, we had accumulated "wealth" over the past 30 or 35 years, but we are certainly not rich by any stretch of the imagination.  We paid $49K for our land, and our house cost us $120K to build some years ago.  Today it might be worth $450K at a pinch (properties going down here too) and we owe sweet bugger all on it.

On the flip side, we have always lived frugally, never owned/rented a house bigger than 20 squares, owned a car with more than 4 cylinders, or taken OS holidays since 1979.....

As we settle here, we actually need less and less money, not more.  Were we to ditch our cars (one's 21 yrs old, the other 15, both do almost 40 MPG!) I estimate we could live on $5K a year.......  no not a typo, $5000 a year.  Cars really keep you poor!

Poor in money, rich in management.  And (almost) ready for anything......

Damnthematrix's picture
Damnthematrix
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Rather than taking sides
Nate wrote:

Rather than taking sides on the poverty issue, what will happen in 20 years when the world is only pumping 50 million barrels of oil / day?  At some point in time the productive members of society will no longer be willing or able to support the non-productive members.  In Crash Course Chris talks about having an adult conversation and dealing with the declining carrying capacity of this planet.

Exactly........

Here's an idea for dealing with the coming depression:  Instead of paying social security to the unemployed, why not pay them less (half? less?) than the current amount they might receive if they can prove to be living sustainably (which of course requires definition, but I'm thinking along the lines of how we live) and not requiring the resources anyone living "normally" would need.

Add incentives for not procreating, and you sort of have a formula for the looming descent.  Crude I know, but you have to start somewhere.  And it's definitely time to think outside the square.

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bad scooter

My goodness, you certainly have crammed a lot of stereotypes of the boomer generation into one post.  Having been born in the first year of the boomer generation, I think I can mostly speak for us.  Although all of us, I'm pretty sure, spent a drug and sex filled weekend at Woodstock, many of us were already working jobs, going to school, serving in the military and/or fighting in Vietnam.  I'm not sure how many of the 58,000 military who died in Vietnam were boomers, but probably most.  I knew a few who did. 

Not only did many of us go to college, we went on to grad school.  I went to undergrad on the GI Bill and worked my way through grad school.  I am far from alone in that story.  My wife went to undergrad for free because she's a brainiac and got a full ride.  She worked her way through grad school.  Both of us have been fortunate to work pretty steadily before, during and after grad school.

I am now looking at retirement in the next few years.  If things don't go too terribly awry, I should be able to pull it off because I stashed a lot of money (by my meager standards) along the way to support us into the so-called golden years.  Oh yeah, I'm also putting two kids through college without debt.

I told a little bit of my story because its not much different than a large proportion of my peers.  There were a few burn outs along the way, but there were among my parent's generation also (the Greatest Generation).  I also know a lot of my peers who are resigned to working until they drop because they can't afford to retire.

So, don't give me a sob story about how hard the genXers have it because of the way the boomers blew the national piggy bank.  It's true that many of us bought into the version of the American dream spun by the various Administrations in the past several decades, and made bad decisions in saving or not, and investing or not.  But, we mostly earned what we got.  In fact, I would venture to say that our children have had it a bit easier than we did until our current sorry circumstances.  Sure there are plenty of boomers to blame for our troubles, Bernanke, Summers, Bush II, but plenty of pre and post boomers too.  Johnson, Nixon, Carter, Reagan, Bush I, Obama, Greenspan, etc.

The point is, for whatever reason we are where we are.  All the generations from our parents' until the present have had a hand in creating this mess, knowingly or not, and the survivors are going to have to live with it.  So, get off your high horse.  The boomers are not picking on you.Yell

Doug

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Well said!
Doug wrote:

My goodness, you certainly have crammed a lot of stereotypes of the boomer generation into one post.  Having been born in the first year of the boomer generation, I think I can mostly speak for us.  Although all of us, I'm pretty sure, spent a drug and sex filled weekend at Woodstock, many of us were already working jobs, going to school, serving in the military and/or fighting in Vietnam.  I'm not sure how many of the 58,000 military who died in Vietnam were boomers, but probably most.  I knew a few who did. 

Not only did many of us go to college, we went on to grad school.  I went to undergrad on the GI Bill and worked my way through grad school.  I am far from alone in that story.  My wife went to undergrad for free because she's a brainiac and got a full ride.  She worked her way through grad school.  Both of us have been fortunate to work pretty steadily before, during and after grad school.

I am now looking at retirement in the next few years.  If things don't go too terribly awry, I should be able to pull it off because I stashed a lot of money (by my meager standards) along the way to support us into the so-called golden years.  Oh yeah, I'm also putting two kids through college without debt.

I told a little bit of my story because its not much different than a large proportion of my peers.  There were a few burn outs along the way, but there were among my parent's generation also (the Greatest Generation).  I also know a lot of my peers who are resigned to working until they drop because they can't afford to retire.

So, don't give me a sob story about how hard the genXers have it because of the way the boomers blew the national piggy bank.  It's true that many of us bought into the version of the American dream spun by the various Administrations in the past several decades, and made bad decisions in saving or not, and investing or not.  But, we mostly earned what we got.  In fact, I would venture to say that our children have had it a bit easier than we did until our current sorry circumstances.  Sure there are plenty of boomers to blame for our troubles, Bernanke, Summers, Bush II, but plenty of pre and post boomers too.  Johnson, Nixon, Carter, Reagan, Bush I, Obama, Greenspan, etc.

The point is, for whatever reason we are where we are.  All the generations from our parents' until the present have had a hand in creating this mess, knowingly or not, and the survivors are going to have to live with it.  So, get off your high horse.  The boomers are not picking on you.Yell

Doug

Well said, Doug.  Good for you.  Hugs ... dons

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high horses

Hi Doug,

It isn't a "sob story".  It is a statement about the way a number of my generation feel, and I believe it is going to be a serious point of contention going forward.  That is the real point of my rant, and it is something we will have to deal with as a society going forward whether you agree with the basis or not.  I'm fully aware that we've got lots of...um...dangerously uninformed individuals...of all ages that are part of the problem rather than the solution.  The generational rift is likely to get bigger though, in my view, along with other social divides.

If you choose to take offense that is yours to take but be advised I made clear I was talking in generalities, and as far as I can see there is a valid point to be made.  I cannot count how many times I've heard "I paid into SS and I want what I have coming", "the government owes me", or similar.  I literally cannot count.  I've not expected benefits for myself since I gave it a passing thought in, say, my mid-twenties, and I don't think that is a very uncommon thought to have...this is not a sob or a complaint, it is a statement of observed reality.  SS has not been an "insurance program" since almost day one.  It is a tax not a trust fund, plain and simple, with a built-in demographic end game.

Because of this, and again speaking in the general, the boomers that cut themselves a mighty sweet deal are going to be utterly in shock when A) there is a refusal to pay, or B) the currency is debased to the point their check doesn't buy a can of chili even though it shows up faithfully in the mail (perhaps with an $8000 dollar stamp affixed?).  I rather suspect some combination of the two.  We're all pretty much on this site because we feel there's some hard times coming, and a bunch of almost-retirement-age boomers whistling about how they are owed Social Security that they voted for themselves and then failed to monitor the status of (some of the AARP stuff I've heard springs to mind) is not going to cut it with me.

Folks who try to think for and plan for themselves I've never had a problem with, and never will.

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
An Issue Of Morality. Or, In Defense Of badScooter

This is a draft of a blog entry I am working on, based on some arguments I had a while back with a couple of acquaintances who were retired or about to retire. They were basically repeating the line that they "paid into Social Security and Medicare" and were just "getting out what they put in". They eventually were resorting to calling me heartless, that I must not care about the poor and the elderly.

My counter argument was that I do care about the poor and the elderly, and certainly where it is reasonably and sustainably possible for society to help, they should be helped. However, I pointed out to them that the previous generations did not care about their children, that they were shamelessly selfish.

So, let me know what you think. Give me some critiques before I post it in my blog:

If you ask the average American, they'd say that they would never want to saddle their children with the financial burden of taking care of them now, and also in their old age. They want the best for their children, and for their children to have a brighter future - not to cripple them with onerous debt. It would be a shameful thing to bind their children into a lifetime of servitude.

And yet that is what previous generations have done to us. Debt is a claim on future income, and the older citizens of this country have laid a crippling claim to the productive efforts of future generations, in order to fund all sorts of past,  present-day, and future enjoyments and priorities.

Our nation officially owes so much money that it it would take at least 8 years of ALL Federal government revenues SPENT ON NOTHING ELSE but extinguishing that debt. (Assuming there is no more additional taking on of debt of any kind whatsoever.) And I'm not even counting the unfunded portion of Social Security, Medicare, and Veterans benefits liabilities, which are even bigger and would likely triple the time.

We ALREADY spend $400 billion per year in interest payments alone on the national debt. We owe so much and spend so much that we borrow that interest just like someone using a credit card to pay interest on another credit card. As the deficit grows and as interest rates likely will rise from an average 2.5% to the more typical 5.5%, those interest payments will double to $800 billion.

That is a terrible, horrible burden to place on our children. It would be as if I had signed my two baby boys up have confiscated from them a large, significant, and substantial sum out of their income each year for their rest of their lives - all in order to pay for my current lifestyle and my eventual retirement. If I knew of such a person who did that to their children, my reaction towards that person might range from pity to disgust to outright hatred. Wouldn't you, if you knew a neighbor who signed their children's future away like that?

That is how you should feel about the previous generations' politicians (on BOTH sides) and the lies they sold to an American public that has always known, deep down, what the truth really was... But wanted the easy, money-greased way out. There should be some SHAME felt here, for such a moral lapse and betrayal. And OUTRAGE, by the young, at such a moral lapse and betrayal.

This is what we are saddled with. We are about at the point where the can can't be kicked down the road any further.

Poet

phecksel's picture
phecksel
Status: Silver Member (Offline)
Joined: May 24 2010
Posts: 204
The socialist support system

The socialist support system has gotten out of control.  Sister of a close friend of ours is on welfare, she and her child both get medicaid.  They both have cell phones, her's is a smart phone.  She smokes, drinks, has cable TV and internet.  She has a medical marijuana card, because she just loves to toke.  She intentionally lets her gas/electric bill get to the point of shut off in the middle of the winter, and the state brings her current.  Work, not a chance in hell, she's figured out how to manipulate the system.  I see this all over the place, people working literally the equivalent of full time jobs to manipulate the system.

Me personally, a two year layoff was a rude awakening.  I went back to school, earned an advanced degree, made some tough management choices to make sure my family was housed and fed.  It has led to a completely different way of life for us... actually a better life.  Often I wonder, who the insane ones are, those inside, or those outside.

badScooter's picture
badScooter
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Posts: 152
poetical

Poet, that is exactly what I was driving at..  Beneficiaries to *all* programs need to have an honest assessment of reality with the sector that will support those beneficiaries, and then "mark to market".  I don't in fact want to see starving grandmas in the snow, and I think the best mitigation strategy to minimize the incipient damage is to face the pain and act in a meaningful manner now (e.g., massive cuts, means testing, extended-family incentivization, whatever), not kick it down the road some more and hope our bond interest rates don't go up...from zero...forever.  I would also like the gov't to stop insulting my intelligence by calling SS a solvent trust fund.

If this is not done...well, even this guy knew the right answer:

http://www.federalreserve.gov/boarddocs/testimony/2005/20050315/

"Because benefit cuts will almost surely be at least part of the resolution, it is incumbent on government to convey to future retirees that the real resources currently promised to be available on retirement will not be fully forthcoming. We owe future retirees as much time as possible to adjust their plans for work, saving, and retirement spending. They need to ensure that their personal resources, along with what they expect to receive from government, will be sufficient to meet their retirement goals..."

"...We need, in effect, to make the phantom "lock-boxes" around the trust fund real. For a brief period in the late 1990s, a common commitment emerged to do just that. But, regrettably, that commitment collapsed when it became apparent that, in light of a less favorable economic environment, maintaining balance in the budget excluding Social Security would require lower spending or higher taxes."

-Alan Greenspan, 2005 testimony

I'm not delusional, though, in that I don't think this will happen until there is a huge amount of pain and anger (and inflation - imo) on all sides of the issue.  How many decades has SS been called "the third rail"?  And we're just getting around to seriously looking at this, now?

 

RP's picture
RP
Status: Member (Offline)
Joined: Jun 23 2011
Posts: 1
A link to peak oil subject. EIA chief economist. Important!

I have been thinking about this topic for some time now. It feels alarming when people in high places starts to inform these matters. ABC news story is a video. And to me, the more informative was the radio interview. 

ABC Catalyst travels from Paris, to London, to the outer space like world that is deep sea drilling, to find out where we stand with our oil supply

Transcript available at: http://www.abc.net.au/catalyst/stories/3201781.htm

Hear the extended interviews from the program on YouTube:

Peak Oil - just around the corner - Part 1

Peak Oil - just around the corner - Part 2

 

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1207
Generational conflict

The situation can be summed up in 3 words: "Life isn't fair".  It isn't fair that Gen X and Y and later have had largely no input or say in the decisions being made yet are asked to pay the bill (there's only voting, and IMO elections on the national and sometimes state level in this country are a cruel joke).  It isn't fair that the Boomers who played by the rules and behaved responsibly will likely get shortchanged with SS and medicare when they need it the most.  And it isn't fair that those of all generations will be asked to bend over because of a relatively small minority of arrogant individuals cared more about being re-elected or reshaping the political & economic landscape to suit their own ends than they did about their fellow humans.  Sucks to be us.

As a 30-something I share badscooter's resentment towards the situation, and I too have had a handful of times where certain older individuals displayed absolute arrogance and entitlement in regards to mine and successive generations' "responsibility to them".  The bitterness is understandable and I know it's mostly just a rant, but badscooter you gotta try to just let it go.  It's obvious from your posts that your head knows what's necessary and that all generations are going to have to take serious hits.  In all likelihood this will turn out to be the Era of Broken Promises, and all generations are just going to have to accept that clinging onto past expectations OR past actions/mistakes will only work against creating a better (or at least a less crappy) future.  We are free (and IMO obligated) to say "NO" when we are asked or commanded to try to fulfill the promises made, but we should do so simply with firm resolve, and without bitterness in our hearts.  Any lack of forgiveness or unwillingness to put the past behind us on our part will make it harder for older generations to accept the need to start from a clean slate.  Too easy to for the more defensive among them to label us "ungrateful" and fight us...

I think the Gen-X'ers and younger are ahead in the sense that most of us already felt many of the promises made to us were BS to begin with, but we also have to understand that we have less vested in the status quo than the average Boomer, and hence they have more to fear when it comes to change.  When it comes to trying to create plans and a sustainable future from a clean slate, this will likely require immense patience on our part .

- Nickbert

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
Well said Nickbert!

Pretty much where I'm at: better to let the blame game go, and get busy building the Next World.

avardy's picture
avardy
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Posts: 4
In the spirit of good relations and communication.

 Poet, It seems to me Rhare shared an interesting link without any commentary. I would consider your response quite aggressive and undeserving. My fear is if people start infering one's position when they simply share interesting links, some may consider not doing so. Please reconsider your intention with your post, which I believe was disrespectful to Rhare. I shared that same link on Facebook without commentary as well and if i receive a repluy similar as yours I would be offended. I hope you view this reply with the intention it carries; that being the ongoing sharing of worthwhile information. Thanks, 

avardy's picture
avardy
Status: Member (Offline)
Joined: Apr 28 2010
Posts: 4
Well said

I think your comments makes for good advice and I am taking this attitude as well. One thing that would provide some comfort would be if those who knew better and chose not to could have some repercussions, if even if it was only public embarrassment as they were taken to task and held accountable for knowing placing the short-term against the long-term or the local consituency against the bigger population, etc. 

frobn's picture
frobn
Status: Silver Member (Offline)
Joined: Nov 28 2010
Posts: 184
SagerXX wrote:Pretty much
SagerXX wrote:

Pretty much where I'm at: better to let the blame game go, and get busy building the Next World.

A good start would be an anti-consumerism movement probably with the assistance of self-help and 12 step programs.

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
To Avardy
avardy wrote:

 Poet, It seems to me Rhare shared an interesting link without any commentary. I would consider your response quite aggressive and undeserving. My fear is if people start infering one's position when they simply share interesting links, some may consider not doing so. Please reconsider your intention with your post, which I believe was disrespectful to Rhare. I shared that same link on Facebook without commentary as well and if i receive a repluy similar as yours I would be offended. I hope you view this reply with the intention it carries; that being the ongoing sharing of worthwhile information. Thanks, 

Avardy:

I would say everything I wrote to Rhare is perfectly fine. (If you find any part aggressive or undeserving, please quote and explain.) However, there may be room for your argument in the following passage:

 

Do you think you could adequately on $22,000 for a family of 4, Rhare? If so, how would you spend it? I'd love to see you set a budget, Rhare. :)

I was merely asking rhetorically, to show how it can be difficult to to provide for a family of four on an income of $22,000 gross income.

I will provide an apology to Rhare if Rhare takes offense to that passage and requests an apology rather than indulge me in my request. But honestly, I suspect he is much more resilient and unlikely to be bothered.

Poet

 

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
How To Deal With That Feeling Of Generational Betrayal
nickbert wrote:

I think the Gen-X'ers and younger are ahead in the sense that most of us already felt many of the promises made to us were BS to begin with, but we also have to understand that we have less vested in the status quo than the average Boomer, and hence they have more to fear when it comes to change.  When it comes to trying to create plans and a sustainable future from a clean slate, this will likely require immense patience on our part .

- Nickbert

Great essay, Nickbert!

I have a few ways of dealing with how I feel about these entitlement programs we younger folk are saddled with:

1. My father retired at 66 and has been on Social Security and Medicare. I make it personal by saying to myself, "Hey, I'm funding his retirement."

2. Our Federal government won't be able to provide Social Security and Medicare for much longer. Already, real inflation and money-printing are accelerating, while Social Security will be tied to the Chain-CPI. When you substitute pork for beef because beef rises, soon it'll be chicken and soy because both pork and beef will be too expensive. But more importantly, wnd when our bonds start hitting 5% rates, interest payments will double from $400 billion to $800 billion and we'll be staring at what Greece is staring at.. All those promises that we younger people will not get? Well, Baby Boomers will find that they won't get it either.

3. I have a lot of other things to worry about, like taking care of my family and trying to promote readiness for all people. Winter is coming, and the government can't be depended on to help. We all need to get ready, all of us, no matter our age or circumstances in life.

Poet

maceves's picture
maceves
Status: Gold Member (Offline)
Joined: Aug 23 2010
Posts: 281
cut cut cut cut cut spending

 A small family could live on $20,000 or less if

---they own their own home

---they own their own car and it is fuel efficient

---they don't have out of pocket expenses for work: wardrobe, transportation, lunch, office expenses

---the kids are not pressured to wear the coolest clothes

---the kids don't have afternoon activities that cost in materials and transportation (band, sports, church...)

---no one is in college

---shopping is done intelligently, saving gas and money

---they are not hooked on electronic or other expensive entertainment

---they are frugal and cut corners to save money

---no one is sick and no one needs expensive medicine or medical assistance

---no one is addicted to anything worse than coffee---no drugs, alcohol, gambling, porn....

---they are industrious and are willing to work to prep, set aside supplies, try growing a garden, and pick up odd jobs

---the family is willing to work together as a team.

---there is support from the extended family, church community, or network of friends

---they can avoid credit cards and shouldering debt

---------------

Unfortunately, breakdowns in any of these areas can make life get more expensive fast.

Think about the culture of welfare and then look back at the list.  How many problems do they have?

A lot of us are one major illness away from poverty.

 

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
Self deception is powerful
Avardy wrote:

My fear is if people start inferring one's position when they simply share interesting links, some may consider not doing so. Please reconsider your intention with your post, which I believe was disrespectful to Rhare.

Thanks for your concern Avardy, but I'm pretty thick skinned.  I think we all have to be when discussing difficult subjects with such a wide range of views. Poet, no worries.

I found the article interesting because it shows how the perception of poor in the US (the homeless struggling to survive - often shown in the media) is far different than the reality that government poverty programs are tackling.  We see this self-deception is so many places:

  • overstated financial statistics (CPI, GDP)
  • overstated value (dollar, houses)
  • overstated threats (terrorism, food safety)
  • understated debt problems (Greece, US, entitlements)

While many believe there are evil people trying to take over the world (ala Alex Jones/Prison Planet), I actually believe it is just people each living in their own bubble making decisions and taking actions that will benefit them the most - social/economic Darwinism.  If you happen to be in the situation to take from the government, you will generally do so as much as possible because it improves your life (at least short term).  If you are a large banker with opportunities to make giant profits - you will do so.  The only difference is the semi-random walk thru life that led you to your current position.

In that way, I don't see the problems we face as a moral dilemma, rather we need to get people to examine short term thinking that results in actions that distort and create future bubbles/problems.  For instance, in 1913 many called for the creation of the Fed to solve the problem of business cycles.   Probably no-one at that time could envision the massive distortion that is the dollar on the world financial markets today.  Or another example is the push for food safety out of overblown fears that now make the matter worse by making if difficult for small farmers to compete, when most of the problems originate on large industrial farms.

It is my belief that much of the "large" distortions can only occur because of "large government".  It's only when you concentrate decisions that effect a large part of the population do you end up with the huge problems.  We need to get back to a more local living in everything.  That means much smaller federal/state governments, smaller farms, smaller businesses, etc.   I would prefer we realize that this will be the ultimate outcome in a reduced energy/resource environment and move in that direction by choice rather than by collapse.  However, the move has to come from individual decisions, through accurate education and assessment of our situation.  It can't be forced change by mandate.

This is why I have such a problem with most of those that consider government the answer.  It's the push for the illusion of more control, for more central planning.  It's the illusion that they can bend the world to their will.  It's the arrogance that they can tell others how to live, steal via government to promote their agenda.   Ultimately all it does is create more distortions and problems.  I think we are at a turning point where people are waking up and beginning to question why so much of their individual liberties and life choices have been taken from them.  I hope more decide that individualism, resiliency, tolerance are the solution and not follow the illusion of collectivism.

 

 

 

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