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Monday, December 17, 2018

The Coming Social Earthquake+My surprise prediction - who will run for president in 2020


Poor Man Survival

Self Reliance tools for independent minded people…


 

ISSN 2161-5543

A Digest of Urban Survival Resources

 

We live in an age when unnecessary things are our only necessities.
Oscar Wilde

 


Most Americans will never be able to afford to retire…The Coming Social Earthquake in America

Plus, My surprise prediction as to who will run for president in 2020

 

  Every single state government is unable to deliver on their pension as each one over promised and is broke as I’ve written repeatedly here…IL is among the worst.

 
An economic recession appears increasingly probable within the next year or two, the disparty in prospects between the 35 million future pensioners and the rest of the workforce will become increasingly obvious.

 

Off-loading Of Retirement Risk By Corporations

Once pensions had become commonplace, they were much less effective as an incentive to lure top talent. They started to feel like burdensome cost centers to companies.
As America's corporations grew and their veteran employees started hitting retirement age, the amount of funding required to meet current and future pension funding obligations became huge. And it kept growing. Remember, the Baby Boomer generation, the largest ever by far in US history, was just entering the workforce by the 1960s.
Companies were eager to get this expanding liability off of their backs. And the more poorly-capitalized firms started defaulting on their pensions, stiffing those who had loyally worked for them.
So, it's little surprise that the 1970s and '80s saw the introduction of personal retirement savings plans. The Individual Retirement Arrangement (IRA) was formed by the Employee Retirement Income Security Act (ERISA) in 1974. And the first 401k plan was created in 1980.

These savings vehicles are defined contribution plans. The future payout of the plan is variable (i.e., unknown today), and will be largely a function of how much of their income the worker directs into the fund over their career, as well as the market return on the fund's investments.

Touted as a revolutionary improvement for the worker, these plans promised to give the individual power over his/her own financial destiny. No longer would it be dictated by their employer.

Your company doesn't offer a pension? No worries: open an IRA and create your own personal pension fund.

Afraid your employer might mismanage your pension fund? A 401k removes that risk. You decide how your retirement money is invested.

Want to retire sooner? Just increase the percent of your annual income contributions.

All this sounded pretty good to workers. But it sounded GREAT to their employers.

Why? Because it transferred the burden of retirement funding away from the company and onto its employees. It allowed for the removal of a massive and fast-growing liability off of the corporate balance sheet, and materially improved the outlook for future earnings and cash flow.

As you would expect given this, corporate America moved swiftly over the next several decades to cap pension participation and transition to defined contribution plans.

America The Broke


Well, things haven't worked out too well.

Four decades later, what we're realizing is that this shift from dedicated-contribution pension plans to voluntary private savings was a grand experiment with no assurances. Corporations definitely benefited, as they could redeploy capital to expansion or bottom line profits. But employees? The data certainly seems to show that the experiment did not take human nature into account enough – specifically, the fact that just because people have the option to save money for later use doesn't mean that they actually will.

While the total number of people expecting a pension isn't tiny, it's certainly a minority of today's workers.

31 million private-sector, state and local government workers in the US participate in a pension plan. 3.3 million currently-employed civilian Federal workers will receive a pension; as will some percentage of the 2 million people serving in the active military and reserves.

Combined, that's about 25% of current US workers; roughly 13% of total US adults.

 A return to economic recession appears increasingly probable within the next year or two, the disparity in prospects between these 35 million future pensioners and the rest of the workforce will become increasingly obvious.

The danger here is of festering social discord. The majority, whom we already know will not be able to retire, will highly likely start regarding pensioners with envy and resentment.

"Hey, I worked as hard as Joe during my career. How come he gets to retire and I don't?" will be a common narrative running in the minds of those jealous of their neighbors.

This bitterness will only increase as taxes continue to rise to fund government pension payouts, already a huge drain on public budget

 

It's not a stretch at all to predict the divisive tension and prejudice that will result from the growing gap between the pension haves and have-nots.

 
Any projected decreases in Social Security (benefit payouts will only be 79 cents on the dollar by 2035 at our current trajectory) will only exacerbate the ire, as the small governmental income the have-nots receive becomes even more meager.

The growing potential here is for an emerging social schism, possibly accompanied with intimidation and violence, not dissimilar to that which has occurred along racial or religious lines during darker eras of our history.

As people become stressed, they react emotionally, and look for a culprit to blame. And as they become more desperate, as many elderly workers with no savings often do, they'll resort to more desperate measures.

Broken Promises


And it's not all sunshine and roses for the pensioners, either. Being promised a pension and actually receiving one are two very different things.

Underfunded pension liabilities are a massive ticking time bomb, certain to explode over the next few decades.

For example, many pensions offered through multi-employer plans are bad shape. The multiemployer branch of the Pension Benefit Guaranty Corporation, the federally-instated insurer behind private pensions, will be out of business by 2025 if no changes in law are made to help. If that happens, retirees in those plans will get only 10% of what they were promised.

Moreover, research conducted by the Pew Charitable Trusts shows a $1.4 trillion shortfall between state pension assets and guarantees to employees. There are only two ways a gap that big gets addressed: massive tax hikes or massive benefit cuts. The likeliest outcome will be a combination of both.

So, many of those today counting on a pension tomorrow may find themselves in a similar boat to their pension-less neighbors.


No Easy Systemic Solutions, So Act For Yourself


There's no "fix" to the retirement predicament of the American workforce. There's no policy change that can be made at this late date to reverse the decades of over-spending, over-indebtedness, and lack of saving.

All we can do at this time is influence how we take our licks. Do we simply leave the masses of unprepared workers to their sad fate? Or do we share the pain across the entire populace by funding new social support programs via more taxes?

Time will tell. But what we can bet on is tougher times ahead, especially for those with poor income prospects.

So the smart strategy for the prudent investor is to prioritize building a portfolio of income streams in order to have sufficient dependable income for a sustainable retirement. Or,  for simply remaining afloat financially.

Sadly, accustomed to the speculative approach marketed to us for so long by the financial industry, most investors are woefully under-educated in how to build a diversified portfolio of passive income streams (inflation-adjusting and tax-deferred whenever possible) over time.

And in the interim, make sure the wealth you have accumulated doesn't disappear. 

During the Great Depression when Democracy and capitalism seemed on the verge of failing the average family, America saw a huge growth of Communism and Socialism among its people…the same is happening again.

Source:  Peak Prosperity

Final thoughts:  Political Earthquake Coming-Guess Who Will Run for President?

 



The imbalances are extreme and obscene... Also the GOP must get its act together in regard to women if it expects to succeed [more in leadership roles for instance]

This is why I think the GOP lost so much in the past mid-term elections.  The Dems/Socialists are tapping into a growing unrest in America between the haves and the have-nots.  There is a coming political earthquake for this nation.

Social unrest that will erupt more and more frequently here and around the world if the economic and political elites continue to behave as they have. Wealth and power have been stripped from the public and been concentrated into the hands of fewer and fewer people.

In a Pew Research Center study of Americans age 22-37, 57% called themselves “mostly” or “consistently” liberal. In a Gallup poll of Americans age 18-29, 51% had a positive view of socialism. And in a University of Chicago survey of Americans age 18-34, 44% said they would prefer to live in a socialist country.

Kids today, few of which ever had to fend for themselves or had that opportunity removed from them by the Nanny State, are drawn to socialism…they’re broke, they can’t afford today’s high cost homes and autos, they’re tired of living in basements, they want to make the world a nicer place – with your money!

Earlier this year…

In the Democratic primary election for New York’s 14th district earlier this year, democratic socialist Alexandria Ocasio-Cortez trounced incumbent Representative Joseph Crowley, the fourth-ranking Democrat in the House. Clearly overconfident, Crowley barely even campaigned. Since then, Ocasio-Cortez has become a media darling, appearing alongside Vermont Senator Bernie Sanders, a self-described socialist who narrowly lost the Democratic presidential nomination in 2016. While much of the energy among Democrats is on the far left, the party has made a point of selecting candidates with a real chance of winning in November.

A revolution is probably coming and the younger generation will likely lead it.  That revolution will see several things which I predict including:

·         A quadrupling of our income tax

·         A national sales tax

·         A single payer health system

·         A $15 minimum wage for everyone across the board nationally

·         A forgiveness of all student debt combined with some kind of free tuition for college

·         More rights will be eroded such as free speech, gun rights & even the ability to carry cash over certain amounts [it is already limited at airports & border checkpoints].

All of this will be in response to the vast growing inequality income gap in this country which has seen huge declines in our middle class during the past generation or two.  Many blame the GOP and old line Democrats for maintaining this status quo.

The middle class has been steadily shrinking, but most Americans still believe that they are a part of it.  Perhaps this is due at least in part to the egalitarian values which have been pounded into our heads for most of our lives.  Very few Americans would have the gall to define themselves as “upper class”, and I have never met anyone that would describe themselves as “lower class”.  In place of “lower class”, many politicians now like to use the much more politically correct term “working class”, but a more apt description might be “the working poor”.  Today, half of all American workers make less than $30,533 a year, and you certainly cannot support a middle class lifestyle for a family with children on that kind of income.

Our incomes have stagnated as the cost of living has soared, and the middle class has experienced steady erosion as a result.  But despite all that, 68 percent of all Americans still consider themselves Middle Class …

In reality, the middle class now makes up just over 50 percent of the total U.S. population, according to a recent report from Pew Research Center, which used 2016 data. That’s compared to 61 percent in 1971.

CitiBank research indicates Americans are once again at record credit card debt levels not seen since 2009 and more people are being denied loans and new credit card applications…they’re even at record levels of upside down rates in auto loans.

 
Here’s my big prediction for the next electionMichele Obama will run for president!  Her current book tour has been in reality,  a trial run.  It has been overwhelming successful.  The media and the public gushes over her every move.  With the backing and blessing of Oprah [which she’ll undoubtedly get] her odds of winning against any opponent are outstanding.


Yours for a brighter season,
Bruce ‘the Poor Man!’


Final Notes…

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5 comments:

Larry said...

As always I think you nailed it on several key points. State and local governments have been overly generous with taxpayer dollars in handing out benefits and pensions to government workers and that is coming home to roost...finally. The same has happened to the post office which is why [as you pointed out in a previous issue] postage continues to head toward the sun.
Finally, today's youth has no upward mobility and they see socialism as the only path despite its failure in countries to our south and even now in Europe which can barely afford to continue as it has [especially as its welfare state has absorbed so many Muslim refugees who don't work just as Leftists here want to do with unemployed drifters at our southern border]...the free lunch doesn't last without someone picking up the tab and just as most US corporations left the middle class to pick up the government tab when they stopped paying their share of the taxes in the US...where will the cash come from when the well dries up?

Dave said...

Terrific observations as always and your prediction about Ms. Obama is interesting & would not surprise as her other half wasn't done implementing his socialist agenda so why not have her finish the job and the mindless automatons in this country will blindly follow without question, bowing at her feet...who knows, perhaps she will be the anti-Christ we keep hearing about?! She sure thinks she's a smart one...read this:

Michelle Obama Explains How She’s Smarter Than Every Person She’s Ever Met
https://flagandcross.com/michelle-obama-explains-how-shes-smarter-than-every-person-shes-ever-met/

Wendy said...

Insightful reading.

Mike said...

Spot on and relevant-times are changing and as you point out everything is cyclical. Socialism is attractive to young people who have no real life experience and people like the Obamas appear to them like the messiah leading them to the holy land of milk and honey just no ideas as to how all these goodies will be paid for. Idiots such as these learned their disruptive methods from Saul Alinsky & his "Rules for Radicals" but mainstream morons haven't a clue about this philosophy and how Mrs. Clinton and the Obama's became apostles of these Communistic methods...we're in for a rough ride my friend.

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