It’s the End of the World & I Feel Fine – Epi-3162 — 12 Comments

  1. I have noticed that many hardworking honest workers quit their jobs because they are sick of enduring excessive (workload, stress & bull shit) within a very inefficient framework of rules which they are not allow to improve or fix.

  2. Did Jack just say Thai-stick?
    If you listen closely, every once in a while Jack drops clues as to what rabbit holes he’s been diving into behind the scenes. Hehe.

  3. Twenty five years ago I finally got around to actually doing enough reading to understand how SS worked, and what the legal history was with respect to “insurance.” It is social insurance which is not insurance in a conventional sense. The unfunded “liabilities” really are not conventional liabilities. One way to look at the debt issue is to realize that Federal debt falls into two categories, public and nonpublic debt. They are completely different, but the public is lead to believe they are the same. When the Fed speaks of debt they are referring to marketable public debt. When a reporter or politician speaks of debt they are referring to the sum of the two, and that is just a convenient way of lying.

    There are numerous Federal trust funds associated with the nonpublic debt. The SS trust fund is the largest, but there are numerous others, the highway trust fund, the Federal G fund for Federal employees and many others. These trust funds are just an accounting scheme; their value just refers to earmarked taxes collected, period. There is no marketable debt involved. What makes this a fake liability is that Congress can change the liability associated with this accounting scheme any time it wants to, and has done so continuously, and the Supreme Court agrees (Flemming versus Nestor, 1960). Note that all these nonpublic trust funds amount to is “spending authority” for the US Treasury, and that can be changed anytime Congress desires to, and it happens ever time Congress passes a new law or amends an old one pertaining to these earmarked tax values. Note that all taxes are spent, and if there is a deficit due to the spending authority represented by those trust funds, the US Treasury sell bonds which represent real marketable US debt. Defaulting on the nonpublic debt is easy and can be done all the time, but defaulting on the real US Federal, marketable debt, is pretty much the end of the world.

    The situation is bad, unprecedented, but what will happen is that Congress will just change the laws, and eliminate the liabilities, or the Fed will inflate their way out of it. For example, you tax all of SS, get rid of the FICA limits, reduce benefits, whatever. None of this is fair, but it was not “insurance” in the first place, and the Supreme Court said so.

    As an example of how dishonest and flaky all of this is, consider the Federal trust fund known as the G fund. It consists of nonpublic Federal debt bearing a rate of return of the average of all outstanding Federal marketable public debt. It has a constant NAV, and there is no marketable debt that the public can buy that has a constant NAV with this interest rate. It does not exist. Nobody complains about this Federal subsidy because apparently nobody understands it, except the US Treasury. It is a subsidy for Federal employees, and apparently nobody cares. And I have long since stopped caring about it. Note also that when you have these refusals to raise the debt limit for a few days, the US Treasury borrows from the G Fund in order not to exceed the limits. This is bull shit, but nobody cares and it is truly arcane. The various nonprofits associated with Federal employee benefit rights use this “raiding of the G Fund” to solicit donations. It is all one big scam.

    The only real liability is the marketable, public debt. Everything else is subject to change, and this is not going to change until people realize it, and that will not happen in my lifetime.

      • You are right, but the history of this stuff is unbelievable. For example, the US Treasury used to purchase marketable Federal bonds to place in the so-called SS Trust Fund. This was ridiculous and if I remember correctly they stopped doing it during the Johnson administration. When SS was first started by Roosevelt he hired a bunch of real actuaries from the insurance industry to manage it. There was nothing for an actuary to do because it was not insurance so they finally let them go, or they quit.
        This also indicated that Roosevelt did not know what insurance was. And, this applies to 99% of Congress. It is an elaborate facade and it will fail, but as you have been pointing out since you started doing this from your car going down the freeway it is better to be concerned about something that you actually might have some kind of control over and SS is not it.

  4. I think you misunderstood what “quiet quitting” is. “Quiet Quitting” isn’t quitting your job, it is just doing the minimum to not get fired. It is people no longer believing that the hardest workers get the raises and not sacrificing their family life for their jobs in hope it will pay off.

    Thanks for all you do.