Inquiring minds might be interested in a discussion of government transfer payments as a percentage of real income. I can help, but prepare to be disgusted. 
What Are Transfer Receipts?
Transfer receipts are government payments for which no services were performed.
Transfer receipts include food stamps, subsidized housing, Social Security, Medicare, Medicaid, child tax credits, and other government assistance.
Three rounds of massive fiscal stimulus during the Covid pandemic set off a huge wave of inflation that the Fed never saw coming.
The numbers are worse than they look above as the following chart shows.
Transfer Receipts as Percentage of Real Personal Income
With every recession, transfer receipts as a percentage of real personal income rises.
The three massive rounds of fiscal stimulus is unprecedented. A friend asked me today why the Fed could not see this coming.
I explained: These guys are not wizards; they have never called a recession in real time. Bernanke denied there was a recession even after it started. He denied there was a housing bubble. They all believe in models that don’t work. And history suggests they always err on the side of being too loose. They will make the same mistakes over and over.
The Fed never saw the uptick in inflation because their models said otherwise. Their models now say inflation will return to normal.
I can see things models don’t: Global wage arbitrage is over. Just in time manufacturing is over. Both Trump and Biden will increase tariffs. The energy needed for AI will soar. The energy needed for EVs will grow even if transition slows. Demographic changes are huge.
Four Reasons Transfer Receipts Poised to Surge
- Influx of illegal immigrants
- Republicans just agreed to expand Child Tax Credits
- Medicaid Expansion
- Boomer Retirements
Influx of Immigrants
Please note: Denver Health at “Critical Point” as 8,000 Migrants Make 20,000 Emergency Visits
Much of that you will pay for directly with higher premiums. But the Federal government will pick up some of it via Medicaid Expansion.
Child Tax Credits
We have a new number on the deal the House Republicans agreed to. It’s $1.5 trillion over ten years.
For discussion, please see How Much Will That GOP Deal on Child Tax Credits Really Cost?
The reported numbers do not include an Affordable Housing giveaway, or aid to Ukraine and Israel, or expanded defense spending. More money and bigger deficits means more inflation.
The tax credits add directly to transfer payments.
Medicaid Expansion
On March 9, I noted Medicaid Expansion Was Supposed to Pay for Itself, Instead Hospitals Are Closing
10 states did not fall for the Medicaid expansion trap under Obamacare. The rest are suffering. Private payers (you, one way or another) make up the loss.
Boomer Retirements
Due to age demographics, I expect employment in age groups 60 and over to decline by about 12.5 million.
In terms of expanding transfer payments this is the biggest of the four by far.
Boomers health care need and retirements will have a huge impact expanded Social Security payments and Medicare payments.
And there is a shortage of 6 million workers to replace retiring boomers. This is another set of things the Fed has not properly modeled.
As a result of demographics, transfer receipts as a percentage of real personal income will surge. And due to a replacement worker shortage, wages will likely rise and productivity decline.
For discussion, please see In the Next 5 years, Employment in Age Groups 60+ Will Drop by ~12.5 Million
I go over the demographic math, point-by-point. Click on the link for details.
Conclusion: The decline in the rate of inflation is transitory. The Fed does not see this coming.
Strong disagree. Congress will stop spending on things when it no longer benefits them, or threatens their job. Think of the “Normalization Phase” of Bezmenov’s plan: the Agents of Chaos were useful when chaos was needed, but once shit got bad enough that the gov was forced to crack down and implement tyranny to solve the chaos (that the gov created for precisely this reason) then those forces of Chaos had to go.
In all things, those in power will do whatever it takes to stay in power. Written and unwritten rules be damned. Remember that during the Great Depression FDR basically stole everyone’s gold as an emergency measure, other countries have seized bank accounts of citizens for no reason other than needing the money, etc. There is nothing that isn’t on the table when it comes to the elites doing whatever it takes to remain the elites.
As shown in Tainter’s “Collapse of Complex Societies”, nations only catastrophically break down when enough cans have been kicked down the road AND something unforeseen happens that the nation no longer has the resilience to survive. As long as it’s business as normal, there will always be other cans to kick down the road. Including mass gulags, Soylent Green, war with Canada, war with Maine, whatever it takes.
Exponentially debt driven systems have to be expanded and patched to function otherwise they collapse.
Social Security benefits now being received by Boomers are not free handouts. We paid 15% of our gross income (7.5% as money withheld from our paychecks and 7.5% as part of our total compensation packages). Except during the (8) Reagan years when we paid double, to make up for previous raids on the Social Security Trust Fund by Congress. The extra “contributions” (taken from us by the government) were intended to cover Boomers from retirement till death. Unfortunately, Bill Clinton, as outgoing President in 2000, allowed Congress to “borrow” two trillion dollars from the Social Security Trust Fund to pay for the Elites War on Terror (they took the money and never repaid it along with interest that could have been earned on that money), and placed an IOU in the SS Trust Fund. Now that the Fund is running out of money again, they have redefined SS pension payments as a form of welfare. Our payments are not welfare, we paid (twice) for the benefits we are currently receiving.
Not one of these factors enters the conversation when my financial advisor wants to have the annual sit-down about our investments. It’s all ponies and rainbows when he looks at what we have saved. I, on the other hand, see confiscation and legal theft on the horizon. Probably sooner than later. There are way too many moochers in the system, and NOBODY in government can stop spending.
We entrust the power of the purse to our Representatives but we have no requirement that they possess any financial skills at all.
well I can tell you that the mils, Gen Z are not very hard workers
and their skill set is MINOR at best
unless you mean phone skills
and they complain about SSI being taken out of their paychecks
well – get used to it – we did
This is just a minor quibble. I would say that services WERE performed for the receipt of Social Security and possibly Medicare. Granted, those services, in the form of productive work upon which taxes were paid happened in the past. To the extent SS exceeds the amount paid in, the “no services” argument might seem correct, until you consider the amount an individual might have received from investing their taxes paid. I believe it is wrong for transfer receipts to be based upon services done at the time payment is received. I am aware that this is counter to modern economic theory, but still should be considered. Except for this minor quibble, I agree with the context of the article and its impact upon the economy.
You are right about a large slice of time-shifted payments. Unemployment (benefits = insurance payouts from prior taxes) might also fall into the same category.
Some of the others appear as unearned worker benefits but might also be considered as subsidies to businesses (enabling companies to pay a lower minimum wage for a good chunk of the workforce).
Atlanta Fed : 77% of adult consumers have at least one credit card. The average balance : $6K in 2023 (TranseUnion). 47% of card holders carry debt M/M.
Fred : total credit cards debt : $1,117B as per Mar 7 2024.
Boomers and Gen X might clear their M/M C/C debt, but most Gen Z and millennials have an outstanding debt M/M, bc they can’t stop spending.
In recession they will be in trouble. They will have plenty of time to learn and recover.
I remember when I 1st got cc and had to use them to supplement income
finally defaulted on all of them
quit making payments, used cash instead(lived within my means)
after few years I got decent job and started contacting cc companies
offered what I owed minus interest they charged
all but one took my offer
now my silly fico(I don’t care) is like 815
well better pay cc this month – over $10k again
still a deadbeat via cc companies – $000,000.00 interest paid since ’95
Pay the $10K ==> $5K, $3K and $2K to feed the beasts and fico.
U pd zero interest since 1995 bc u defaulted. U could have settled with them – before the 90 days delinquencies, before the recycle bin – and pay zero interest rates and $50/$150 per month in installment for 4Y/6Y, whatever and
still pay zero interest since 1995.
COLA increases : 2.8% in 2018, 1.6% in 2019, 1.3% in 2020, 5.9% in 2021, 8.7% in 2022 and 3.2% in 2023. Transfer payments (almost) reached $3.5T. If we enter a recession COLA will not rise, nor decline. Transfer payments will rise. In recession millennials might suffer the most, more than boomers or Gen X. They are getting married and raising a family. They are buying stuff at higher mortgage rates, higher rent, higher car payments, higher school payments and higher C/C rates. They might drop from peak earnings to the unemployment lines, while piling debt. The smart ones are saving as much as they can. The first signals will come from the stock markets and the 10Y.
Government welfare program don’t support the economy. They parasitically fed off the economy. They create perverse incentives that lead to wider social problems. I.e., welfare moms and the rise of inner city crime.
Don’t forget the welfare cases from the military, many of whom would otherwise (and do) end up on public assistance (or AA); and of course the US government employees, of whom I can state with verifiable certainty; the EPA and BLM literally do nothing and contribute little of merit and value.
Our disgusting and vile secret police/surveillance state is to make sure you agree with the transfer payments from the good verifiably productive citizens to an expanding cadre of worthless ambition-less ticks sucking the life out of “productive America.”
It’s astonishing how the ticks (military, police, judicial, 3 letter agencies, congress) actually believe they embody virtue and the entrepreneurial spirit that made the US great. It requires 24/7 propaganda across the board to deceive us about their non existent worth. Laughable at best. And If America was in fact ever great, it surely wasn’t because of a tick infestation derived from the worst among us.
Corpulent ticks, now gorged on your green blood are wanting more and more. They insist you do what they say and don’t DARE complain, as 1500, and 1000+ more to come, from those on 1/6 made clear.
Rural poor, single mothers, denizens of the hood are their chiral opposites; a voting block insurance policy; both of similar inherent virtues (zero) and to whom “the spice MUST flow”.
It’s not sustainable, as all failed empire have previously demonstrated. We are in the terminal stage of an “empire looting and plunder model”, requiring currency debasement, secret police, endless war as industry and 24/7 economic fabrication.
Thinking this is sustainable is absurd,
Cogent, if uncomfortable.
David C, be a man and stop complaining about the abuse done 200 years ago. You
guys are the useful idiots of outside forces. Obama most influential coach was Erdogan.
The liberals dreamers surfed on a large wave starting from Bela Abzug, Gloria Steiment all the way to Jerry Seinfeld. In Oct 2023 those guys – who played the Liberal Defense – face reality. The last sixty years were fake. In the next election women lib wouldn’t matter. Vote by mail, open borders and a bridge to the world ==> will.
Expanding the child tax credit isn’t going to encourage anyone to have kids (assuming that’s the goal). Attitudes amongst the younger generations are markedly different from Gen X and the older generations with respect to having children. DINKs (dual income no kid(s)) are very common amongst the younger generations, and, anecdotally, the young people and DINKs I’ve talked to have said that being a DINK is/was thier goal. They say kids are a burden financially and emotionally. They want thier free time and would rather spend their money on trips, gadgets, and gizmos. Raising a kid has never been cheap or easy. While I do think that the cost a living has certainly contributed to younger folks not wanting kids, I think the me-centric attitude is more to blame than the cost. I’m not judging this me-centric attitude either. I’m indifferent to it, but I do acknowledge that it has consequences. You do you boo.
With all of that said, get used to higher than “normal” inflation for quite some time. Prepare and invest accordingly.
I dunno. Every survey of young women who don’t have children say they want them, but can’t afford them.
I never wanted kids and at 79 I still think that is the way to go. My wife and I are happy DINKS. Everyone is selfish but some pretend they are virtuous. why not be happy?
Kids and grandkids give you a joy that you can not conceive of.
That, and they pay your social security. Besides, any society which fails to reproduce itself simply fails.
My husband and I are in our 60’s. We didn’t have kids and enjoy our traveling. We don’t feel like we missed out on anything. We have nieces and nephews with over an 18 yr span so we still got to enjoy kids w/o the full time responsibilities
Some people don’t want the responsibility so they buy a dog or cat or both.
One can go into Form 10-K reports for major grocery store chains and food companies and find that mentioned under Risk Factors.
Money buys power, like feeding a cat, you feed him he will come back, give out money, they will come back and vote you in. Now you have control of those you have feed. Then he will tell you what he wants, you will agree with him.
So true. Now, my cat runs the house.
The spike is in Medi Care payments to the MIC Medical Industrial Complex, which is currently 21% of GDP. I have a hard time blaming the small amount of transfer payments to people who need help affording food, and kids who need a lunch. The herd of Elephants in the room, is people not taking good care of their health, and then expecting the MIC to fix it.
Medicare $747 billion
Medicaid $592 billion
then there are Veterans health care, child supplemental programs, etc, not listed here,
link to cbo.gov
Update to health spending, add $100 billion for ACA subsidies. A quick search says the VA spends about $15,000 per year per covered veteran.
That’s an important distinction. I’m a veteran, but not eligible for VA coverage.
Those two alone add up to 5% of GDP
Correction National Health Expenditure is 17.3% of GDP
I worked for years in the UK health system — a completely different model than the US one, of course. But in any case probably 10% to 15% of the population were responsible for 80% of the health care spending.
Of course in the USA you have Big Pharma colluding with Big Food and others to promote bad diets, which are along with smoking the cause of most chronic disease. Just look at how much money the Diabetes Industrial Complex makes from drugs, glucose monitoring, vascular surgery, etc. The medical consequences of the obesity epidemic alone will bankrupt the country.
As Mish points out, it is only going to get worse with the migrants entering the US with various tropical diseases, unknown medical histories, language problems, and other complicating factors.
And I remember when I had to have proof of vaccination, income, and a passport to cross borders. And kids had to have proof of measles vaccination to go to school. Happy times.
Sorry if this is politically incorrect but it’s what I believe. With all of the transfer payments, there is unfortunately a reverse Darwinism effect, where the government subsidizes unproductive people>unproductive people procreate>offspring of unproductive people need to be subsidized>etc.
Instead of survival of the fittest, we have survival of the UNfittest, which is not good for the future of humankind.
Darwin’s imperative was flawed in that in did not recognize “The Survival of the Symbiotic” as the true formula that nature encourages.
Most people who spout “Social Darwinism” would not last 2 minutes in the Hood, much less 2 minutes in War or Social Decay. They would not last in the wilderness for very long either.
Government does not just subsidize unproductive people, but government is unproductive in and of itself, so add to this cadre a high percentage of Government workers.
Next add to this many of the investors on this forum who may or may not produce anything outside of their investments. Many investments do not produce a darn thing, but skim wealth from others by moving chess pieces around a board that is skewed in certain directions. If our economy was a PinBall Machine it would have already flashed Tilt:Game Over.
I knew a Marine Platoon Comander who served in WWII and Korea. He said you never could tell who would come through in battle; but it was often the person with bravado who fell apart, and the least likely that would hold the whole Sh.t Show together.
You’re NOT eating other people. Society was created specifically because “Survival of the Fittest” is actually a horrific reality. It looks more like “The Purge” except all day…every day. Humans built Societies so that they wouldn’t be “Dog Eat Dog World”.
While the US has some completely screwed up programs and highly inefficient systems, in general the country works overall, even in spite of Citizens United and the overt bribery of politicians over the previous decades.
The US absolutely needs to fix Education, Healthcare and Finance in the country because there’s significant waste and graft from Private Businesses with their hands in the Public Cookie Jar and handed massive windfall profits from bought and paid for politicians.
Short Version: Human Civilization is NOT Survival of the Fittest. It’s called Civilization for a reason.
Humans are social animals, like dogs and chimps. In social animals, the fittest relates to the tribe, not the individual. In its proper sense, Asian Indians are the fittest, out-breeding all other tribes.
Humans have evolved over 200,000 years to be excellent hunter/gatherers. Industrial capitalism is only about 250 years old. And in 250 years may be gone.
Tribal “fitness” is not merely a matter of population and procreation, but of economic and military power. If you go too far down that path you end up with racism, though. What actually counts isn’t “tribe” (genetics – transmission of DNA) but rather “culture” (mimetics – generational transmission of ideas and know-how).
100% accurate BRAVO!
Who is certain to afford a family and are almost impossible to fire – those who work for the government and military and the abjectly poor as long as they can make it to their social worker appointments.
A Net Net loss. They produce nothing – only consume.
The parasite class is out breeding the productive class. That’s why you will see “military families” multiple generations of immoral parasites lacking volition and ambition. Conversely, take a trip to the hood and note the remarkable fertility and corpulence amongst its denizens. All are dependent upon the government to pay for their existence. Neither contributes much to anything at all, and their ideologies and pursuits are visibly immoral if not outright evil. One in the same.
Meanwhile massive corporations with the help of the fascist melding of government and corporations, mutilate and destroy the productive classes small businesses (as in the phony lock downs.
You can’t afford a family working at Starbucks, Wal Mart or Home Depot BTW without government handouts.
Value is only created by moving MATTER to a higher state:
Refurbish a dilapidated house.
Taconite in Iron – Iron into steel – steel into car bodies
Turn random code into software
Take lumber build a house
Take a chicken make eggs
Generally, the higher the shift in the state of matter the greater the worth
Everything else is consumptive and dependent upon the largess of the productive class.
Good points
Hey Mish, I would just like to touch on two issues, out of the three you headlined. I didn’t see you touch on it, and most don’t, so you’re hardly alone. It’s like a third rail, if you will, but whatever todays analogy would be?
“Means Testing” wait for it… sort of a different approach, but it may work. It’s a proposal, quite different from the norm, or business as usual. The latter ends badly for everyone, and hurts the most people the fastest. Nothing has changed, so nothing will change.
We must do something with all those IRS new hires, or we will be paying them to sit at home. So let’s get them to work.
Key Documents: Tax Returns
1. Social Security: Key Questions:
A. Total Amount Paid Into, Lifetime.
B. Total Amount Taxed On, Last 30 Years.
Commence with a “National Election” for the % to be, and this % will be taken into account, and explained what, why, how etc. when the “Final Decision” is handed down via A White House Press Conference.
This % will be what is determined, as a figure to utilize in issuing benefits, as such a “National Median Income” is determined. This % will represent 3 Classes:
1C – Paid Above X% = No Payout
2C – Paid Within XRange off X% = Payout Via Tiered Level
3C – Paid Less than X% = No Payout
Something along these lines must be done to save S/S, and IMO, this scenario will become, and has already in my belief, the way forward. Need one of the two parties to run with this sort of approach, and they will get a shot to do so IMO!
Food Stamps, so to speak, lunches, etc. Same scenario, and once again, you’re not going to be liked. Once again you’re saving it now for the future, or risk losing it for everyone forever. Outside the Box, Fair, Facts Based ways to do so, or Gone!!!
Simply put, NO alcohol, High Sugar (candy/cereal), High Fat/Calorie and limited amounts of certain foods. Lots of restrictions, based upon teams of Doctors across the entire Country, and through volumes of research and analysis of information.
It can all get done, with the will of the people supported by the government who are for the people, right?
Without the spending of SS,FS, and welfare recipients, the stores that are left here would have to close down.
Between 2018 and Jan 2024 transfer money increased from slightly less than $3T to almost $3.5T.
In 2020 the ex transfer, in brown, declined while the blue line increased by about the same amount. The ex transfer had a few more minor setbacks, while with transfer had a huge positive pulse in Mar 2021.
The Fed borrowed from people’s bank accounts for an IOU without peoples knowledge and permission, and without paying dividends. The gov paid the unemployed, restaurant’s owners, small businesses and shingle mums to keep them alive. The econ was shut down until we know what we didn’t. We couldn’t go to restaurants, fly and buy a car. The money stayed in the banks. The Fed borrowed again. The gov stimulated again, along with the bank’s emergency loan to wealthy people with assets at low interest rates. The money was invested in the stock markets and to buy real estate.
“These guys are not wizards; they have never called a recession in real time.”
People forget (or do not know) that economics is, at best, a social science and not a hard science. It is descriptive not predictive. People, especially economists, take it far too seriously. 🙂
True , but … in that case Econ model predictions should be prefaced with proper credits of the form “this model never gets anything important correct, but it predicts…”
And far more importantly, the failed models need to actually be Discarded in favor of more accurate (even if less precise) tools.
The real failure of Econ is that it isn’t being run like ANY kind of science – failed theories need to be thrown out, not recycled!
The resurgence of communist and corporate (fascist) approaches, for instance, would never happen in a real science. Failures in Econ need to stay dead!
“Failures in Econ need to stay dead!”
Ergo the truism: the lessons of history are never learned, but only repeated.
Sorry, I typed too fast..
The lesson of history is that failures are never learned but repeated.
“Three rounds of massive fiscal stimulus during the Covid pandemic set off a huge wave of inflation that the Fed never saw coming.” I’ve wondered that if the stimulus was all borrowed money then it would not have been inflationary, but since the Fed bought some of those bonds using money from their printing press, that they caused the inflation????
Why would you expect there would be any difference between:
1) running the printing press and helicopter dropping the printed money
2) borrowing money and helicopter dropping the borrowed money
The end result is the same, helicopter money entering the system with no working being done which then chases the existing goods/services. How it happened (press, borrowed) doesn’t matter especially when it won’t be paid back in either case.
When the gov’t sent out a round of stimulus checks during the scamdemic, the MSM reported that it wasn’t coming out of the federal budget and that it wouldn’t have to be reported as income. No further details on where the money actually came from and the story has been memory-holed.
(I agree with TexasTim’s explanation. It also explains why the ongoing deficit spending is inflationary. It doesn’t matter where the money is coming from. It’s money that is being spent into the economy that otherwise wouldn’t be).
The government prints the money and puts it in people’s bank accounts. The banks then use that money to buy the treasury bonds and bills the government uses to borrow the money it just spent. So it is always printing AND borrowing. But ALL money ends up either in investments or corporate gross revenue. Inflation was caused by who got the money: lower and middle income folks. Instead of investing the money, they spent it, which caused inflation in consumer goods (bad inflation) versus inflation in capital goods (good inflation). We’re seeing the inflation in the stock markets now because the money rotated from consumers to corporations to investors. Inflation in consumer goods continues (though at a lower pace) because consumers have been conditioned by America’s largest media organization to expect it instead of taking action to withhold their spending from those corporations which are taking advantage of that mindset to increase profits. Which is why profits are at their highest point ever right now: inflation in prices with no inflation in costs.
Good info. But where you wrote, “With every recession, transfer receipts as a percentage of real personal income declines,” I think you meant ‘increases’ at the end there.
Another great post, Mish! Thanks.
I submit an alert for youth and oldsters alike: As people get old, more and more of us need urology services. In my metro area at least, the wait to get an appointment with a urologist at the larger, reputable firms seems to be upwards of two weeks. It seems to me that some of their offices are understaffed. I encountered good, dedicated, hard-working staff members at all levels working at two local offices. Based on my very limited (two times) experience. I suspect their pay is pretty good.
Option #1 : when incontinent is severe urologists stick a pipeline from the bladder through the belly button to a container.
Option #2 : strengthen your Pelvic Floor Muscles. It isn’t about an enlarged prostate. The lower infrastructure is caving in.
Take SS out of the equation. We have effectively killed off defined benefit pension out side of government jobs so SS is necessary. I wish it wasn’t but it is.
How about doing a similar blog on corporate subsidies transfer payments. Almost all of those aren’t new jobs coming from overseas but industry playing us state vs state.
The Poor in Turkey are supported by the Muslim Bros. Erdogan rules by supporting the majority of the poor population. They are hooked on him. Obama’s Cairo U speech and regime change reinstated Egypt’s Muhammed Morsey.
In recession the Muslim Bros might have a strong grip in the US. Their aim is to destroy the police and the economy. Thereafter we will recover under their power. They already took over our education system and the social media. Biden’s Transfer Payments are better than Turkey and Qatar infusion and influence.
Good point.
Thanks. People should understand the connection between : defund the police, the destruction of our history and institutions by outside forces, which operate in this country for decades. It isn’t a conspiracy theory.
Sooo foolish. Our History is our history. It’s NOT pretty and much of it is and was horrific for those on the wrong side of it. Stop making foolish excuses for the wrongs that were done over and over again for hundreds of years. Suck it up. Be a man and and realize that this country has done a LOT of awful shite to many millions of people both inside the US and outside the US.
Deal with it and quit sweeping shite under the rug and you won’t be living a lie.
But god is on our side, sang Bob Dylan.
Pretty much agree with everything stated Mish. Not too worried about food stamps. Social Security and Medicaid/Medicare are the big items. We can’t do much about this as boomers are retiring en masse and needing more medical attention.
This is all modestly inflationary.
And there is nothing any of us can do about it, except to improve our personal health and wealth, so we do not become part of the problem.
That last line about improving personal health is the most important part of your response.
It’s medical costs that are spiraling out of control. SS is a known cost today and into the future (baring a mass die off). But medical expenses are 100% unknown and increasing VERY rapidly. That’s where the system is going to collapse very soon because it’s unaffordable to give everyone Cadillac medical treatment.
Health costs are probably the easiest to cut if certain roadblocks were removed.
Can we get a roadblock list?
The biggest road block is information asymmetry. Buyers generally don’t have the knowledge necessary to shop based on cost. Instead, they are forced to shop based upon perceived quality (a friend thought they had a decent experience). Economics generally says that this is where the government should step in to control how prices are set. The second road block is voters who know nothing about basic economics and when and where the government has a role. The third road block is corporate entities who take advantage of the second road block to bribe elected officials to allow them to price take at will.
Another roadblock is the excessive administrative overhead in the industry that curiously resembles that which is found in universities where you have a Chinese army of administrators who do nothing useful.
Many people get no medical treatment and then get ambulance treatment when they have an emergency.
The US healthcare system has been co-opted by middlemen and politicians, BIG Pharma and the Food Industrial Complex, which is allowed to shovel chemicals and shite into products and call it “natural”or “Organic” when it is anything but that. and we have a crappy Preventative Healthcare system, which is why soooooooo many people are diabetic or soon to be and / or don’t know what they’re doing when it comes to their own health. Healthcare is one of the most messed up things in the US.
Cheers!
This is more an observation as opposed to any particular disagreement, but j am not seeing how baby boomer Social Security is showing much in the way of spiking transfer payments causing surging income growth. The first year of baby boom SS early eligibility is 2008. So we have had 16 years of baby boomer SS eligibility and collections already in the rear view mirror. The graph is not showing a linear increase as one would expect. It is showing that SS is replacing some pre SS income as one would expect. It’s not like we have another decade of baby boomers flooding the SS system unless the vast majority
are waiting until age 70. But all data that I see is that this is not the case. So I am not seeing in the data presented this surge of baby boomer SS transfer payment income surge. We should have started to see it in 2008. We do see an initial spike
In 2008 but it then flatlines apart from government non SS stimulus initiatives. What am I missing?
Socialism is not coming, it is here and will continue to evolve, integrating into much more of our society. The political party does not matter, they are mostly the same. This is a system build over the decades but is now accelerating. I had this conversation 20 years ago, saying that deeper socialism was not just likely the outcome, but the only outcome of the system that has been put in place. I don’t like it but 100% expected it.
This will get much worse and there is nothing we can do. Your votes will not matter. Both parties will continue the path we are on. Look at history. Every 4 years people are brainwashed into voting for a party because of change.
We’re just suckers to feed off of politicians propaganda that’s ingrained into our society.
Then pack your bags and get the F outta here and stop bitchin’. Worthless people complain about something…do nothing and then complain when the thing they complained about doesn’t change. The less complaining crybabies here in the US the better. Please send us a postcard from whatever “Better” country you decide to hang your shingle in.
Socialism is the ownership of capital by workers. That essentially doesn’t exist in the USA. What you are actually complaining about is “Distributism”, the transfer of purchasing power from those who have more than they need to those who have less than they need.
Much of this issue could have been mitigated with a simple fix. But DC, wearing political blinders, would never let it happen.
That is because Social Security law only allowed government debt as an investment vehicle. Yes, they used our retirement money to finance politicians’ spending habits. If Social Security was allowed to invest even 25% of its cash in an S&P tracking vehicle, much of the transfer vs income percentage would disappear, or even inverse if more money was allowed to invest in the GDP through the markets.
This is obviously nonsense.
You *want* social security invested in government debt with defined payments (interest). That allows accurate forecasts into the future about exactly how much money will be available. More importantly, it keeps wall street from stealing a tiny percentage of that SS money via ‘fees’ they charge to manage funds/portfolios etc if that SS money was put into the S&P.
Also,100% of the SS money is invested in the GDP. That’s because it’s not put under a mattress by the government. It’s 100% spent, as you noted which means it’s 100% put back into GDP since government spending is part of GDP and so are transfer payments since whom ever gets them spends that money.
“Now that we can see it, feel it in our bones, we must do the same to them.
Bidenism is now a euphemism for puppetry, rampant corruption and communism.
We stop it here, or we’ll see endless streams of it, because the elites want nothing other than a puppet to impose their dictates, bureaucracies they can control by bribing politicians.”
link to tldavis.substack.com?
You clearly DON’T know what communism actually means. Or else you wouldn’t make silly statements like that.
The inflationary depression is locked in. The fed will inflate even faster to keep ‘assets’ inflated until the voters stop it. Good luck with that.
This is why Powell seems so intent on jawboning about lowering interest rates. Fed policies cause unreasonable housing price appreciation but now, higher interest rates keep people from purchasing the much more expensive housing stock.
Therefore, even in the face of not being near the supposed 2% annual inflation number, the Fed is being force to consider lowering interest rates so that housing prices don’t crash in an election year.
This might be why the Fed is so desperate to find an excuse to lower interest rates.
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Commercial Real Estate Threatens “Hundreds of Banks”
PETER ST ONGE
MAR 22, 2024
In case you’ve still got money in a bank, Bloomberg is warning that defaults in commercial real estate loans could “topple” hundreds of US banks.
Leaving taxpayers on the hook for trillions in losses.
The note, by Senior Editor James Crombie, walks us through the festering hellscape that is commercial real estate.
…
link to profstonge.com
Were you there in the Savings and Loan Crisis in the 1980’s? The shareholders and the bondholders got wiped out 100%. Depositors didn’t lose anything and smart people who knew the market picked up portfolios of property at once in a generation prices and the world kept turning.
So you’re recommending to let commercial real estate crash?
It’s a Market with Booms and Busts. Commercial Real Estate has more different components than residential does. Interest rates were held too low for too long…THEN they were jacked up too high too quickly, which caused unnecessary stress on CRE and now, they will need to drop interest rates slowly to signal that CRE just needs more time (extensions , ReFis and Repurposing of some of these assets. Some will take haircuts and others will change to Residential and others can switch uses without too much drama, if it’s handled well. (Spoiler Alert: much of it won’t be handled well and there will be vultures forcing liquidations of assets and they will make a killing. That will make it worse than it needs to be but lots of the money is between very large corporations, funds and asset owners. VERY different from Millions of individuals in the Residential Market, who are business savvy.
Yes of course.
TL;DR – Way more old people collecting gov’t cheese, not as many young people to generate said cheese.
If Social Security allowed the cheese to invest in the markets instead of government bonds, that said cheese would be worth far more.
Just raise the SS percentage by a few tenths of a point and/or eliminate the SS tax cap on earnings. Problem solved.
You’re welcome.
We come here for bad news and panic/recession calls, not sober minded solutions. For shame!
Capitalism works. If old folks want more cheese, corporations will find a way to provide it.
I;ve written [back in 2010] that food stamps keep much of local economies going starting at the grocer, working its way to hair dressers, auto reAID AND SO ON
That applies to all money handouts, which is one reason it is so difficult to end them.