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1. The exponential trend lines are based on the data from 1959 through 1999. If that was our truly prosperous era, then why did we require exponentially increasing net government borrowing (relative to our wages)?
2. The long-term exponential trend for expenditures exceeds the long-term exponential trend for receipts. Who thinks that will end well?
3. We seem shocked that our government is spending so much. Should we be? Current federal government expenditures (in black) sit right on the trend line (in red) that was established before our recent economic crises even began.
4. Who really thinks we'll be sitting pretty if federal government expenditures reach 100% of wage and salary disbursements someday? If these trends established between 1959 and 1999 continue then that would happen in the year 2067. There's no way we'd make it that far though. Things would clearly fall apart well before then.
5. The last decade of economic calamity certainly hasn't made the trends any better. The exponential growth trend in federal government receipts has failed miserably. As a percentage of wage and salary disbursements, we're now at 1980 levels.
6. Dare I mention Social Security and Medicare?
Social Security heading for insolvency even faster
WASHINGTON (AP) — Social Security is rushing even faster toward insolvency, driven by retiring baby boomers, a weak economy and politicians' reluctance to take painful action to fix the huge retirement and disability program.
The trust funds that support Social Security will run dry in 2033 — three years earlier than previously projected — the government said Monday.
The trust funds that support Social Security will run dry in 2033 — three years earlier than previously projected — the government said Monday.
Source Data:
St. Louis Fed: Custom Chart
13 comments:
newegg has the ivy bridges out now . . .
http://i.imgur.com/OrbVR.png
for my build . . .
still needs a pair of $500 graphics cards, but that can come later, LOL
Troy,
My friend said he's willing to help me put another one together again.
I'm probably going to go a somewhat cheaper route though, lol.
yeah, that's 2X overkill on everything.
Going back to best bang-for-buck and future-proofing, without overclocking or SLI potential, that would downgrade to an H77 motherboard, a non-K CPU, and a saner power supply:
http://i.imgur.com/1zcA5.png
But that's only a $200 savings, LOL. You can continue to cut by going with an el-cheapo power supply, save $20 on the CPU by going with Intel's low-end Ivy Bridge (or $100+ by going with i3 versions of Sandy Bridge), keeping the stock heatsink/fan, cutting the SSD to 128GB, not going with the deluxe Lian Li case . . .
But I value a low-noise components, and value a bit of future-proofing, so I'm willing to spend a bit for stuff that I'll have for the next 5+ years.
My 2007 build is still good enough, really. Might wait for the Ivybridge-E (the workstation models) coming out next year I guess.
Certainly if you're not playing the bleeding-edge games, $500 worth of stuff will get you buy fine.
I want to buy a 1000 of these and make an old-school arcade video game for them.
Something like Magic Edge Hornet Simulator or F-15 Strike Eagle.
Factoid: the plastic marquee frame on top of the game is from a trash can.
Don't ask me how I know, LOL.
But these days it makes more sense to focus on the tens of millions of iPads out there . . . sigh
Troy,
But these days it makes more sense to focus on the tens of millions of iPads out there . . . sigh
Part of me wants to go the Apple route. I was an Apple Developer for more than 10 years. I enjoyed it.
It's funny though. I've yet to personally own an Apple product.
I actually tried to own an Apple product once.
It was just after starting my first job. I wanted a high end one. I figured it would help me in my career as a programmer. My credit application was denied though.
In hindsight, it was for the best.
SS was designed as a pay-as-you go plan. The trust fund was established to accommodate the baby boomers who were unanticipated in the 30's. When the fund is gone, it reverts to pay as you go.
This is not a problem.
Any short falls can be avoided with very modest increases in FICA tax.
Coberly at Angry Bear has posted a lot on this topic.
The answer to the problems your graph illustrates is to raise wages. They have been stagnant for 40 years, and in decline for the last decade.
It will go along way toward alleviating SS shortfalls, too.
JzB
Jazzbumpa,
The answer to the problems your graph illustrates is to raise wages. They have been stagnant for 40 years, and in decline for the last decade.
*If* real wages rose, that would solve the problem. As you point out, that is not the trend though.
This brings me to a saying.
If "ifs" and "buts" where candy and nuts then we'd all have a Merry Christmas.
Just saying.
Jazzbumpa,
Any short falls can be avoided with very modest increases in FICA tax.
Devil's advocate here.
Any modest increase in FICA tax would modestly depress real after tax wages.
That won't exactly help the falling real wage problem.
I'm not suggesting that we shouldn't save Social Security by the way.
I'm simply pointing out the reality.
My credit application was denied though.
My parents kindly co-signed for my deluxe $6000 Macintosh IIcx via Apple's "Loan to Own" program. I put half down, got a $3000 student loan for the rest.
Made the money back with it the next year at least, and got 5 productive years of use out of it. The Apple tax was very painful in 1989 -- they were running 40+% margins on very expensive kit (unlike their 40+% margins on $300 COGS iPad 2s).
When the II came out in 1987 that was the machine that I *had to have*, so I saved for 2 years for it at $5/hr. DOS and Windows 286 and later 3.x had negative attraction to me. Windows 95 was somewhat underwhelming too, but Win2k and the 440BX platform finally put Wintel in rough parity with the Mac experience.
Bought a 7500 in 1995, a G3 in 1999, a PBG4 in 2002, an Intel iMac & Mac Pro in 2006, and a MBP in 2008. Built a Win2k box in 2001, a P4 box in 2003, and a Core2Duo box in 2007 . . .
Apples are great if you like spending $500+ more for stuff, LOL. The MBP I have now looks and runs as good as day 1. My Mom's using the iMac and the Mac Pro isn't obsoleted as my workstation, either.
I use Windows as a dev environment, to keep my skills current on that side of the biz more than anything. I don't play games any more, alas, because today's games suck.
Still have the dream to be a producer in the space and not a consumer, LOL.
Any modest increase in FICA tax would modestly depress real after tax wages.
As long as there's one year of expenses in the SSTF we don't really need to increase the tax rate.
Funny thing about taxes is that I'm a believer in the 'all taxes come out of rents' thesis.
There's no reason home rents & prices have to be as high as they are. Raising payroll taxes starting later this decade is a good way to knock some sense back into the system.
But we're going the wrong way, LOL
Troy,
I rank the odds of knocking some sense back into the system right up there with new world order monkeys flying out of my, well, you know. ;)
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