Comments on: The Next Wave of Inflation is on the Way http://www.rawgreed.com/inflation-is-on-the-way Online Investing | Investing in Gold Thu, 08 Apr 2010 16:04:37 +0000 hourly 1 http://wordpress.org/?v=3.0.2 By: kevin koy http://www.rawgreed.com/inflation-is-on-the-way/comment-page-1#comment-52648 kevin koy Thu, 08 Apr 2010 16:04:37 +0000 http://www.rawgreed.com/?p=552#comment-52648 Our money is extremely hard-earned, paid in taxes. There’s an interesting trivia question that I heard a while back. Most people don’t know the difference between $1 billion and $1 million and I have a way of explaining it. A million seconds is 9 days. A billion seconds is something like 31, 32, 33 years. Think of the difference between 9 days and 32 years. That’s the difference between a million and a billion. Most people don’t get the order of magnitude when we read in the paper that this program was funded and that program was funded, a billion here a billion there. It’s been a bad day some years when I’ve had to pay federal income taxes when you’re pay ungodly amounts to the federal government and you’re wondering where the money will be spent. I don’t know many people who have paid north of $1 million in taxes each year; so how many people have to work how long to create $1 billion in taxes. The statistic is that the government has brought in 17% of GDP in taxes this year and it will spend 28% of GDP in expenditures; so the amount that our government is spending in excess of what it’s bringing in is just dramatic. No, I would love to see the president pull together the cabinet and say “ok in 48 hours I want you to submit a report on how each of you is going to cut back your departments 15%.” I would love to have the U.S. government trim back all discretionary expenditures 15%. I believe we need to trim back all non-discretionary expenditures such as social security and Medicare and Medicaid, etc. We need to have a plan in place. If we were a company instead of a country, we are bankrupt and have committed accounting fraud. What I mean by that is simply: If we were a company and were obligated to pay a pension; call it social security, Medicaid, Medicare, call it what the U.S. government is doing in the backdoor with having Fannie Mae and Freddie Mac write reverse mortgages. If you’re over 60-some years of age or older, you can get a non-recourse unguaranteed loan off the value of your house. You don’t have to pay it back. If your heirs want to pay it back they can. You get that money today. The government is issuing that loan and the government is underwriting the value of your house. What if the value of your house goes down 30% over the coming 3-4 years as governments around the country become more and more like the government of Detroit and job prospects become more and more like the job prospects of Detroit? If that is to occur the government will be sitting on unfathomable losses on these reverse mortgages across the country in every little town. How can our government underwrite those losses? It’s totally ransoming the value of our children’s and grandchildren’s earning power and holding them hostage. I think a percentage of the population gets that, but clearly the people in Washington do not. Should the government spend more of our hard-earned money to save the economy? Obviously it hasn’t been saving the economy. I would vote absolutely not. The economy has to stand on its own and the government should not think that they want to redistribute money. If congress finds a way to repeal the laws of supply and demand, then maybe the idea of bailouts would work. Unless gravity ceases to exist, and money flows to its most productive use, and high taxes scare money out of countries. Unless these fund immutable laws can be overturned then the U.S. has to change course if it’s to prevent itself from becoming the largest banana republic. Our money is extremely hard-earned, paid in taxes. There’s an interesting trivia question that I heard a while back. Most people don’t know the difference between $1 billion and $1 million and I have a way of explaining it. A million seconds is 9 days. A billion seconds is something like 31, 32, 33 years. Think of the difference between 9 days and 32 years. That’s the difference between a million and a billion. Most people don’t get the order of magnitude when we read in the paper that this program was funded and that program was funded, a billion here a billion there.

It’s been a bad day some years when I’ve had to pay federal income taxes when you’re pay ungodly amounts to the federal government and you’re wondering where the money will be spent. I don’t know many people who have paid north of $1 million in taxes each year; so how many people have to work how long to create $1 billion in taxes.

The statistic is that the government has brought in 17% of GDP in taxes this year and it will spend 28% of GDP in expenditures; so the amount that our government is spending in excess of what it’s bringing in is just dramatic. No, I would love to see the president pull together the cabinet and say “ok in 48 hours I want you to submit a report on how each of you is going to cut back your departments 15%.” I would love to have the U.S. government trim back all discretionary expenditures 15%. I believe we need to trim back all non-discretionary expenditures such as social security and Medicare and Medicaid, etc.

We need to have a plan in place. If we were a company instead of a country, we are bankrupt and have committed accounting fraud. What I mean by that is simply: If we were a company and were obligated to pay a pension; call it social security, Medicaid, Medicare, call it what the U.S. government is doing in the backdoor with having Fannie Mae and Freddie Mac write reverse mortgages. If you’re over 60-some years of age or older, you can get a non-recourse unguaranteed loan off the value of your house. You don’t have to pay it back. If your heirs want to pay it back they can. You get that money today.

The government is issuing that loan and the government is underwriting the value of your house. What if the value of your house goes down 30% over the coming 3-4 years as governments around the country become more and more like the government of Detroit and job prospects become more and more like the job prospects of Detroit? If that is to occur the government will be sitting on unfathomable losses on these reverse mortgages across the country in every little town. How can our government underwrite those losses? It’s totally ransoming the value of our children’s and grandchildren’s earning power and holding them hostage. I think a percentage of the population gets that, but clearly the people in Washington do not. Should the government spend more of our hard-earned money to save the economy? Obviously it hasn’t been saving the economy. I would vote absolutely not. The economy has to stand on its own and the government should not think that they want to redistribute money. If congress finds a way to repeal the laws of supply and demand, then maybe the idea of bailouts would work. Unless gravity ceases to exist, and money flows to its most productive use, and high taxes scare money out of countries. Unless these fund immutable laws can be overturned then the U.S. has to change course if it’s to prevent itself from becoming the largest banana republic.

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