Watching bloggers go bonkers reporting that Social Security may be cut to balance the government’s budget has me laughing all the way to Apocalypse. What is it that people thought? Social Security is a time-shifting Ponzi Scheme that isn’t illegal because the government runs it. It gratifies the liberal in me and makes absolutely no sense economically especially when we have an upside-down-triangle shaped population as ranked by age (thanks WW2 baby boom!).
When people catch wind that an entitlement as big as Social Security or one as fundamental as Medicare is threatened everyone instantly closes their eyes and power-stuffs their head into the sand – wham wham thhhwap plork!
I tweeted a while back that it would be an interesting time when the government was faced with Social Programs vs. Military Spending. This particular versus is an insidious one, because if either side wins it’s an economic apocalypse. It’s a Catch-22 as well, since you can’t keep this kind of spending going forever, eventually China will go apeshit and demand that we take the borrowing we’re fleecing them for seriously. In many regards, USA(SSI vs. DoD) Vs. China. If we cut Social Security we’ll have outrage, panic, and most likely a spike in heart attacks. If we cut Medicare we’ll have a lot of dead elderly as medical care will become catastrophically unaffordable. If we touch military spending then we’ll harm the military-industrial complex and the massive flow of cash out of the DoD and back into the general economy will squelch and then we’ll have another economic collapse. So, if we all play a very good game of pretend, we can ignore that problem as long as none of us do any kind of simple mathematics. That is until China can’t stand the Catch-22 they are in with us and stop lending us money. They know that it’s disaster if they stop, but eventually they’ll have to, and then we’ll stop buying all that cheap chinese plastic crap and their economy will tumble as well.
This is epic level drama whore material. “May you live in interesting times!” Indeed a blessing and a curse! Afghanistan nearly broke the Soviets, and it’s going to break us. What’s the practical upshot? Massive hyperinflation as the US Treasury prints billions of worthless dollars in a last-ditch effort to keep the mighty US economy from total collapse. Those of us who are filthy debtors are going to be the only ones dancing in the streets as our debt, which is not keyed to inflation quickly pay off the numbers, and then we’ll follow the rest of you down the whirling economic toilet hole that is our collective future.
All it takes is time. In the meantime it will be interesting to see how the Federal Government responds to these ever-mounting pressures. Which will buckle first? Entitlements or Defense? Anyone care to toss the dice?