Born After 1950? Counting on Social Security OR IRA Retirement Savings? Think Again!

I had never heard of “Pink Day” until Alyssa, my 13 year old granddaughter, said we had to absolutely go on Friday for back to school shopping.

After I paid the bill for her “loot”, I looked her in the eye and said “my credit card is now in DEEP FREEZE!

That didn’t keep her from trying, again, on Saturday to see if she could get me to use it, again.

No dice, sweetie. Unlike our government I need to live within my budget.

Once a month, I have to gather all the bills, including that credit card, check my bank balance, pay all the bills, subtract the payments, and put some of the remainder into savings. What is left is so-called “discretionary revenue”.

National Debt will Reach 110 Percent of GDP by 2036

If we impose that kind of prudent thinking on the American economy — that means no more “pink days” for Congress and the American people.

We can’t pay the bill!

The Congressional Budget Office (CBO) projects, based on current law, the National Debt will rise to 86 percent of Gross Domestic Product (GDP) by 2026 and will exceed 110 percent of GDP by 2036. (The 2016 LONG-TERM BUDGET OUTLOOK Table 1.1)

That’s the rosy scenario.

As debt grows, interest on the debt grows, squeezing out private investment and with it economic growth. As the economy shrinks, the ratio of debt to GDP accelerates.

Before the United States reaches the 100 percent Debt to GDP threshold, no investor, foreign or domestic, will be willing or able to purchase our debt at any interest rate.

The largest economy in the world — the collapse of the USA’s economic system would lead to a worldwide cataclysm.

The military superiority the world has depended on to bring order and stability since the 1940s would disappear – in fact, we wouldn’t be able to maintain an army or navy to defend the homeland.

Prepare to Lose Your IRA Savings!

Not planning on Social Security — believe your retirement savings will secure your old age? Think again.

On our current course, you are likely to live to see the United States unable to meet its financial obligations either domestically (Social Security, Medicare, Education) or internationally.

The combination of political and social instability and the collapse of our financial system will swallow everything – including your savings.

For a preview of what could happen during your lifetime or your children’s look to history the rise of Nazism in Germany  or to Greece or Venezuela today

President Obama Couldn’t Defuse Debt Bomb

During his 2008 Presidential campaign Barack Obama excoriated President George W. Bush and the GOP Congress for increasing the National Debt (credit card) from 33 percent of GDP in 2001 to 35 percent of GDP in 2007.

Three big, unexpected events drove the Bush-era increase in the National Debt:

  • Cost of tax rate reductions following the 2001 recession
  • Unprecedented spending for Homeland Security after 9/11
  • Wars in Afghanistan and Iraq.

When President Obama came into office in January 2009, “Job 1” was stabilizing the economy – that meant spending more money to get the country moving forward, again. The only way to do that was to borrow still more money – the National Debt quickly rose to 62 percent of GDP.

During his tenure in the White House the first of the Baby Boomer Generation would retire – putting more pressure on an already stressed Social Security System.

The President faced a steep challenge — balancing the budget would require shared sacrifice across the American population and the American economy.

Every special interest served by the Federal Budget would resist. He needed a Bi-Partisan PLAN.

His answer: A National Commission on Fiscal Responsibility and Reform.

To lead the effort he invited former Republican Senator Alan Simpson and former Clinton Chief of Staff Erskine Bowles. Both of these men have strong reputations as citizens before they are partisans.

Among others, he appointed Alice Rivlin, who had served as Clinton-era Director of the CBO. She warned about debt in general and the need to reform Social Security in particular.

The Commission membership included Republican and Democratic House and Senate leaders and others from the Administration and outside government.

Their findings were published in December 2010 — to significant fanfare — subtitled The Moment of Truth:

But the Moment of Truth never reached Congress for an up or down vote.

Instead the National Debt rose from 62 percent of GDP in 2009 to 75 percent of GDP in 2016.

The striking rise in debt is the result of unrestrained government spending, Congressional reluctance to raise or reform taxes, natural disasters, and continued military operations.

Next President Has Last Chance to Defuse the Bomb

And yet, unlike Barack Obama, neither Hillary Clinton nor Donald Trump have focused on the rising ratio of Debt to GDP or the risk it presents to every aspect of our national life and government.

Libertarian Gary Johnson (former Governor of New Mexico), has made debt reduction and balancing the budget a priority in his campaign but the limited press exposure he receives has allowed Ms. Clinton and Mr. Trump to “skate” on the issue.

In fact, both promise more discretionary spending, expanded Social Security and lower taxes.

They are either lying or they can’t do basic math?? I’ll let you decide.

Every American Must Make the Hard Choices

One thing is certain, as citizens, taxpayers, parents, and grandparents it is our solemn duty to elect a President and a Congress willing to confront debt, deficit, and balancing the national budget honestly and courageously.

No one wants to pay more in taxes, but the fairly small sacrifices required of each of us in this decade pale in comparison to the consequences that could face our children in the next decade.

  • It is up to YOU

    Get Involved

    In the coming weeks, will do what our Presidential Candidates and other politicians are not - throw out some positive and plausible ideas to "right the ship of state".

    Ideas you can ask candidates about during the Fall Campaign.

Photo by author


Saving US Economy Starts Now: Keep Oreo Cookies in Chicago

The first item I selected at the grocery store last night was a bunch of fresh tulips with a banner “Grown in California”.

As I was preparing dinner, I turned on the ABC Nightly News. David Muir reported from the newly renovated Renaissance Hotel at Times Square that Marriott Hotel brands were all switching their guest room towels from imports to “MADE IN AMERICA” – without adding a penny of cost to Marriott hotel operations.

Consumers Drive Job Creation

My tulip purchase helped to make and maintain a job for a Californian.

Marriott Hotels’ towel decision has created 150 manufacturing jobs in Georgia.

Those manufacturing jobs will create additional opportunities from cotton farmers to the local diner.

Marriott Hotels’ action is not just good for American workers – it’s classic American marketing. They’ve created a differentiator.

A differentiator is anything that will separate Marriott from the competition– i.e. will cause the consumer to pause — give their offering a second look.

Guests will tell their friends how good they felt wrapping themselves in Made-in-America towels at a Marriott property.

That good feeling — backed up with an effective advertising and free media campaign will garner Marriott brands additional customers this vacation season.

The more effective the strategy is for Marriott, the more quickly their competitors will “catch the wave” of Made in America towels.

Every Presidential Candidate Promises Jobs

According to recent polls, the number one issue in the 2016 Presidential Election is THE ECONOMY.

Every candidate is promising to produce jobs – lots of jobs.

But none of them have explained how they are going to do it.

Maybe we should elect David Muir? Unlike all the leading Presidential candidates, he understands that a dynamic economy is a balance of consumption and production!

The American economy grows, generates real new Gross Domestic Product (GDP) when it creates a demand for American made goods instead of imports. pace at which the economy grows is determined by how fast those dollar bills change hands between producers and consumers within the circle of the US economy.

When consumer goods are imported into the United States rather than manufactured in America, the American economy shrinks because dollars exchange hands between consumers in the United States and producers in other countries.

In Short: Importing consumer goods exports American jobs, wages and consumer dollars.

The Result is a Slowing US Economy

Demand makes economies grow.

In the years after the Second World War Mississippi enjoyed a flourishing textile industry. They grew cotton and turned it into textiles and clothing that we all bought.

In the 1980s and 1990s textile manufacturing jobs in Mississippi began a steady migration to China and other “developing” countries – where wages were lower.

The Congressional Research Service estimates that by 2005 three quarters of the nation’s textile and clothing jobs had been off-shored.

In Mississippi, riverboat gambling became the replacement industry. “Service sector” jobs – waiters, maids, and croupiers – command much lower wages than more highly skilled manufacturing jobs.

Less clothing manufacturing meant less demand for Mississippi cotton. Cotton farmers earn less and employ fewer workers to grow, harvest and gin the cotton.

The result: Fewer jobs, lower paying jobs and reduced profits — a reduction in national consumer demand for “Made-in- Mississippi” — weakened the Mississippi economy.

Mississippi has the highest poverty rate in the United States – with more than 20 percent of their population living below the poverty line.

In 2016 – Plug the Job Leak

Stop the bleeding!

Between 1998 and 2013 fully one third of the manufacturing jobs in the United States disappeared. This extraordinary job loss is magnified by the fact that the US population grew by twelve percent in the same period – widening the gap between good paying jobs and available workers.

Some of the job losses are due to innovation and obsolesce but most can be traced directly to the export of American jobs.

The pattern is continuing in 2015.

Nabisco announced that it is sending 600 unionized jobs from Chicago to Mexico to save $46 million dollars in “costs”.

Bring Oreo Cookies Back to Chicago

The sisterhood of American moms and grandmothers can stop this outrage by refusing to buy the product.

The most powerful weapon Americans possess against job loss is purchasing power.

Just like the union workers who are being shelved by Nabisco – all of us can “go on strike” – boycott Oreos made in Mexico!

I want my grandkid’s Oreos baked by a profit-sharing baker in Chicago.

I’ll pay a little more for bedding manufactured by a profit-sharing seamstress in Vicksburg, Mississippi.

It is a mystery to me that Presidential candidates don’t point to the relationship between “buy American” and “growing” American jobs?

Someone get Hillary and Donald a plate of Chicago baked Oreos!