Sucking Our Nation Dry

(10 am. – promoted by ek hornbeck)

No, this is not an essay on some X-rated movie.  It is about how the government and Wall Street have continually conspired to take and use any new money it can get its hands on, which, now means YOUR money.

The latest new “idea” floated by FDIC Chairwoman Sheila Bair is to have state pension funds buyout failed banks.

Now, I am not totally ignorant about economics, nor, am I a studied professor on the subject.  However, I’m not sure who could glean any meaningful information out of the following:

In a speech to the National Association for Business Economics Washington Policy Conference, FDIC Chairwoman Sheila Bair outlined what she called “a pre-funded resolution mechanism,” but did not specify what exactly that is. She instead said it would be “similar to the FDIC’s receivership authority for failed banks,” exposing only shareholders to risk, as opposed to the bank bailouts that saw billions of taxpayer dollars funneled into a near-crippled financial system.

“Shareholders and creditors would bear the losses, not the public,” she explained. “But, the process would be orderly and help prevent a catastrophic collapse of other firms.”

Go ahead, do your head shake to clear the cobwebs, and let’s talk about the latest plan for the government to get their hands on YOUR money.

Before we talk about the pension funds, however, we must look at the ways that the government and Wall Street have already taken YOUR money.

Social Security

We continually hear about how, without reform, social security will become insolvent.  The reason that our government wants to “reform” social security is because they have looted so much money from it, using it as a slush fund, that there is no way that the government can repay it back.  Thus, the system needs to be “reformed” so that the problem simply goes away.

In a little-known book, “The Looting of Social Security: How the Government Is Draining America’s Retirement Account,” Allen Smith, who has a P.h.D. in economics, details how the Bush administration looted social security in his eight years in office.  But, it wasn’t only George W. Bush, it started with Ronald Reagan.

From The Boston Globe

If you … have the stomach for a truly demoralizing read — you may wish to take up ”The Looting of Social Security: How the Government Is Draining America’s Retirement Account,” by Allen W. Smith (Carroll & Graf, paperback, $14 ).  With dismal clarity, Smith lays out the step-by-step history of how a national pension plan was transformed into an outright shakedown of working people, a maneuver that began during Ronald Reagan’s administration. Bill Clinton aggravated the situation by making no distinction between general revenue and Social Security in crowing about budget surpluses — which, in turn, culminated in the grand largess of George W. Bush in handing out whacking great tax cuts to the rich.

It is an unfortunate fact that the social security fund is basically broke since it is running on IOU’s.  As Bush said:

“Our system is called pay as you go.  You pay into the system through your payroll taxes and the government spends it.  It spends the money on current retirees and with the money left over, it funds other programs.  And all that’s left behind is file cabinets full of IOUs.”

THAT is the reason that Bush wanted to privatize social security; all those IOU’s are suddenly gone and a NEW system instituted.

Retirement pensions became IRA’s

Many people have IRA’s.  Many people saw their IRA’s take a huge hit when Wall Street almost crashed.  That is because the money you have in an IRA is money that is traded on the stock market.  In addition, no matter when you take out the money, it is treated as taxable income.

Companies finally realized that it came out of their profit margin, and,  Wall Street wanted a new way to their hands on more money.  The “win-win” scenario?  To stop giving retirement pensions and, instead, force people to set up accounts that they put their money into that Wall Street could then use on the stock market.

The stock market, however, has three “lanes”; the slow lane, the fast lane, and the ultra-fast lane.  

The ultra-fast lane is used by those who run the industry, and, they never lose money.  The fast lane is used by those “preferred members,” and, they rarely lose money.  Everyone else, to include these IRA’s accounts, use the slow lane, meaning that when the market takes a loss, it is the people in the slow lane who take the biggest hit.

To put it more bluntly, it is our money that is lost first so that others can keep their profits.

How to get more money?

I posed this very thesis before, that our government and Wall Street will continually want more money, that companies will continually want higher profits, and, as wages stagnate and decline, there are fewer and fewer ways for that to happen.  The government has already stolen the funds from social security and Wall Street already has all the money they are likely to get from IRA’s.

We’ve already seen that banks hold no accountability for their failures and debts.  In fact, we just saw this, and the ramifications of it, in action; in Iceland.  When an Icelandic bank went bankrupt, the British and Dutch governments are demanding reimbursement for debts incurred by the failed bank.  The Icelandic government is now trying to push that debt, incurred by a bank, onto each individual person because the debt is so large even the Icelandic government can’t afford it.  Our government could afford it, on our taxpayer money, by simply increasing the national debt by a few trillion dollars.

The idea today is “reforming” health care, but, as Dennis Kucinich has said, all the bill does is make all American’s buy health insurance by federal mandate promising that this will keep rates low.  What promise has our government ever kept?

When you look at what Sheila Bair said, it is now evident where they are looking to find that new money; state pension funds.

Here is what she said, see if you can follow this thinking…

A state’s pension fund is used to bolster failing banks, and, if the bank fails, only the shareholders and creditors will take the loss.  

But, if a state’s pension fund is used, that means that each person who has money in the fund is now considered a shareholder.  Thus, they lose their money they had IN that pension fund.

Doesn’t that sound like another “win-win” scenario?  The FDIC uses the money that average people contribute to a state pension fund and are looking to fund their retirement to cover banks, and, if the bank fails, it is the people that lose, not the banks, not the government.

Unless someone knows something I don’t, that is exactly what I am reading.  Sheila Bair is simply floating a new way for the government to get their hands legally on more of our money.

They’ve drained our social security.  They drain our IRA’s to bolster losses in the stock market.  Now, they want to drain state pension funds.

That pretty much sucks any safety net for the average person dry.


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  1. live in an area which could produce it’s own food supply.

    Are you up on all the latest health without a doctor technology.

    Do you have enough ammo.

    What does your local like minded people score look like.

    Do you know some guys who can wire up stuff to 12 volts DC.  

  2. The military is sucking the US dry.  

  3. …. I’m so happy to see the nearly bankrupt state of California leaping into another scam with putting their retirees’ futures in the fiscal toilet of funding the Middle Eastern Mercenary Crusades !

    Over 140 U.S. lenders folded in 2009 alone. To remedy the financial void left in their wake, the Federal Deposit Insurance Corporation wants public pension funds, which safeguard the retirement funds of millions, to buy in part or in whole the banks that couldn’t manage to keep their depositors’ funds.

    “Direct investments may allow funds such as those in Oregon, New Jersey and California to cut fees for private-equity managers, and the agency to get better prices for distressed assets,” anonymous sources reportedly told Bloomberg News.


    The wire service also reported that firms being targeted for the plan control over $2 trillion in retirement funds.

    Yeah, I bet that sources wanted to remain anonymous on that one.

    This is why Rahm Emanuel and the Coffee Party don’t want us using profanity.

    Who the hell is the scam artist who thought up this newest con job ?  

  4. Many here will remember the ’80s Social Security reform. Withholding went up significantly and the amounts being withheld were sufficient to see the system through to the middle of the 21st Century or longer. This was proper self funding, not “pay as you go”, but that created a problem. If we extract more money than we pay out for Social Security and put it in a “lock box” as the phrase had it, it was equivalent to putting the money into a coffee can and burying it.

    A true “lock box”, it was feared, probably correctly, could stall out the economy. IIRCC, Keynes had discussed the problems with inter-generational wealth transfer. If this money could be invested in areas that would improve future productivity, such as infrastructure and public education, then the future economy would be able to pay for the retirement of the baby boomers. But with Reagan came Neo-Classical Economics, Supply Side economic fantasies and successful pressure to reduce taxes, especially on the wealthy. So, instead of being invested in better infrastructure and public education, the increased revenues from SS withholding was simply used to buy Treasury Bonds. Treasury could then cover the reductions in capital gains and personal income taxes with the revenues from these bond sales. The investments we made were in Star Wars and other defense expenditures. Later we claimed that this is what had led to the collapse of the Soviet Union–which no one had expected.

    So we have paid for Social Security and instead gotten Star Wars, etc. I guess the Death Star blew up SS. Lucas should have cast Ron Reagan as Darth Vader, but that would have been to exaggerate Ronnie’s role. His job was to hit his marks and deliver the speech with conviction, whether or not he understood it. In many cases it was probably better for the Reagan Admin. masterminds that Ronnie didn’t understand what he was saying. Made him more convincing.  

  5. The official coup d’etat of the Republic is well on its way. It’s just those pesky states. The real American Republic sits in Washington D.C. You know, Uncle Sam and his band of corporate thieves. Let’s let State Pension funds for millions of Americans take the risk of bailing out banks too small to succeed, cause the Federal Insurer is broke helping out the big ones, you know, the ones with people in high places. Amazing!  

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