Category Archives: Economy

Our Childrens Economy: Social Security

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The United States is growing ever closer towards bankruptcy and we just keep piling on more and more debt. People don’t blame Bush it’s the law of compounding interest and providing too many services. One of the more pronounced services that is out there is Social Security. I find that it is quite possibly the largest disservice for the future of the country.

Social Security is the funds that are taken automatically from workers pay for retirement funding, unemployment,  disability, spousal and children, and widow benefits. All of these, except for the retirement, unemployment, and widow benefits, were not part of the original bill and the widow benefits have changed from lump-sum to the continued monthly payments of the deceased spouse. The original bill proposal was highly controversial in and was opposed because it would result in the loss of jobs. However, some said that this was an advantage as it encouraged the elderly to retire, opening positions for the youth.

The problem is that now the elderly are working longer and are less encouraged to leave, resulting in harder positioning for the younger generations. The fact that this pay comes from the workers who should be the younger generation means that this is impacting their future coverage. The average age of workers is also beginning to go up and at ~15% per worker and at a 5.8:1 worker/retired we are slowly sliding into a Social Security deficit; projections show that the ratio will drop to 3.1:1 meaning that we won’t even be providing half the coverage that’s promised.

While researching this, I discovered that the Social Security spending for the ’07 Fiscal Year was $580 billion, this is annualized process that increases every year. Honestly, we’re worried about the government spending $900 billion just once, sure it was on bad loans, but it’s actually going to help stabilize the country while we prepare for the long run. Social Security is ripping off the future generations to pay for it’s promises.

I propose that we introduce a retro-active grandfather clause that will reduce the rates of which people are accustomed will be receiving.  You reduce funding to anyone who was born since January 1, 1963(45 years old as of 1/1/09) to 70% of what they where promised once they reach 67, regressing the rate by 5% for every subsequent year until age 35. Anyone between the ages of 35 and 30 shall receive 25% and anyone below 30 will recieve nothing.  We have this bill continue until the year 2100 and direct excess funding towards the federal deficit. I would not have a problem having the tax remain in my wages so long as it is going to help sustain the state of the country in the future. This isn’t even as drastic as what we need but, it is an initial idea to help us get it started.

This is just my two cents on my subject, and in fact this would actually be excluding myself(19 years old). Though it wouldn’t matter there is nothing left for my generation or future generations, either way. Please leave some comments on what you think of this subject.

Following The Green

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ComputerWorld posted an article that greatly disturbs me. In the article, it shows the growth of CS courses after a steady decline from the ’03-’04 school year to ’07 and how many are switching majors from business. It also mentions that students were making a similar swap back in the late 90′s towards tech.

Bryant said he expects that the troubles on Wall Street will likely influence some students to switch majors in the coming months from business to other fields, including computer science. He also urges caution to those students.

These students are obviously in it for the green, they followed it to business and now that it collapsed they’re following it to the next big thing. What we need are people passionate about what they do, not people that are only passionate about money, key examples abound in the Financial Sector right now. I think we should find people who actually want to do these jobs, and not just for the money.

With the economy as weak as it is, if your a small company it’s going to be even more important for you to find passionate people, just read Jason Calacanis’ latest post (recommend signing up to his mailing list), excerpt below.

3. Firing the average people: Again, it’s totally politically
incorrect, but I highly recommend firing anyone who is good or
average. Startups are an Olympic sport and every slot on your team is
critical. You wouldn’t put a “good” swimmer in a relay, would you?
Don’t have one in your startup. Fire the good and replace them with
the great. ~ Jason Calacanis

You know who are probably not going to be average, the people who are passionate about what they are doing. The passionate employee may spend more of their personal time on learning more about they’re area, and be willing to take a pay cut to keep they’re position.

So we need to find a way to deter people from following the money, in the next few years we will see a large rise in un-passionate employees in the Tech Industry. This will hurt companies that invest in people that only got into the area for the cash. What happens when the cashflow slows, or another bubble happens, and how can we stop them now?

Links From August 11-27

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Something extra for you this week. Some links I really enjoyed the past 2 weeks. Decided I needed to post them before they become to old and irrelevant.

Robert Scoble on passionate user adoption and Ubiquity. This is just something that I enjoyed reading especially after using Ubiquity for several hours yesterday. If you want to use it I recommend reading the tutorial and watching the video.

An article, from Business Pundit, on the enlightenment complex that we see stateside also developing in the Chinese culture. A bit of an insight into why my generation, for the most part, feels so damn entitled. Also, suggest why depression is on such a climb.

This is one of several articles that prompted my last post. It is promoting some smart financial advice on steering clear of private lenders. However, it all so shows weak decision making on behalf of the government, in allowing people weakened by the subprime mess increased loans.

A really thorough and thought provoking conversation with Nassim Nicholas Taleb, author of ‘The Black Swan‘ and ‘Fooled by Randomness‘, provided by Portfolio.com. It looks into his life and how he removes the noise of now.

As somewhat of a bibliophile this last one is just an amazing list of 50 Essential Novels, provided by Leo Babauta at Zen Habits. It is such a substantial list of both classic literature and current hits that are certain to last for a long while. I recommend checking this list out if you enjoy reading.

College Is Taxing the System

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Something I’ve noticed the last week is that discussions on education have been popping up everywhere. Our economic system is facing collapse, and the main issues are all centrally connected to the way our secondary-education system is founded and unregulated. The payment of the tuition is resulting in the major collapse but no one wants to focus on it. You have parents taking out mortgages, the government heavily subsidizing tuition, and student lenders, all taking huge losses on college.

I mentioned this in an old post that was originally written in the middle of March, though it focused on only the government subsidization. The issue is not that government shouldn’t assist, but they are hurting themselves and the economy by not regulating school rates. Over a 30 year period they have wasted approximately $2.4 Trillion( with a T) on education. Meanwhile, college rates are rising doubly as fast that of interest rates.

The people who were taking out loans are hurting but if they claim bankruptcy that is only making it worse for everyone else. The students with 30 or 40 thousand dollars in loans are going to find it hard to pay back because of the weak job market, and the parents who took out mortgages are are probably hurting tremendously. Yet, today the NYT’s posted an article on how the lenders should be taking the brunt of this blow. By allowing the students to claim bankruptcy on these funds.

This article is fucking ridiculous( pardon my language) , this will allow for billions of dollars to be wiped from the slate. This leaves the lenders with no capital to provide for the future borrowers and no profit for their services. What needs to happen is a reformation of the collegiate system.

The problems of our current economic tumults are founded upon these 2 systems the collegiate and the lenders. They are the major issues that caused the collapse in the housing market collapse, outside of the pricing bubble. Colleges have been and will be taxing the lending system both private and federal, making it harder to produce revenues to reach the equilibrium needed. College is generally going to cost you more with less job security and lower standards of pay. Lenders are feeding on this fact for interest and fees.

So the point I’m trying to say, is that even if we find a way out of the housing bubble, we still have a huge problem. If we don’t do something to reform college funding we will see this strain the system to a point of another economic collapse. I can see this occuring anywhere from less than 5 years to 10-20 years from now, it will happen if we don’t do anything.

Your Pouring The Wrong Way

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[I’m sorry for any ranting and poor writing this subject is just to dire.]

Wednesday, June 23, the Housing Bill was passed through Congress and the House. I’ve reviewed what little information they are giving the public and it’s only going to affect a small majority of homeowners, approximately 400,000. The main benefactors to this bill, however, are Frannie, Freddie and other lenders. The fact still stands that overtime the average American is going to be taxed for the problems of others

The bill will offer bailouts on houses up to $550,000 which in most cases would be relatively higher than median pricing in any area,  with exceptions for a few areas (i.e. California). This is just ridiculous; if you’re going to offer this to former defaulters you’re a fucking retard, or a member of Congress. This is a horrible incentive to be offering, it’s just going to show them that they weren’t responsible for their problems, each party will point the finger at the other.

I think someone should have thought this thing through, at 600 pages you would think that it might be worth something, yet nothing except tying the government to corporations. I think if anything we need to bolster economic centers of growth but we can’t be bailing people out for every problem, yeah I’m calling you out Dems. We need to develop a plan that can actually help rather than just boost morale for a few months. We also need to show that we don’t support weak economic decisions by people, how about starting to teach basic personal finance and economics in our Middle and High Schools.

Our lending market filled itself with greed and ditched common sense; they offered poorly qualified people opportunities that they could never afford. These people only thought about margins and not about the chance that everyone else would be going after the same niche in the market, sub-prime borrowers. Now we, the American public, get our asses taxed off until we default or our jobs get taxed to the brink and they collapse leaving us jobless and then we default. This isn’t going to help it’s just there to ease the trip down.

So it looks like I’m going to have fun as a responsible spender over the next several decades. Hooray for the assholes back in the 90’s and early-oughts, for flipping me and my generation over and fucking us in the ass. It really fucking stings to know that simplicity and release from branding, no matter how non-conformist, doesn’t help you separate far enough to escape bailing out the people bound to consumption. It’s time to stop praying for the money to come in, and learn responsibility for your actions.