Good Morning Middle America, your King of Simple News is hot off the press.
U.S. NEWS: The economic news is getting worse as the days go on, with new home sales falling to a 13 year low. At the same time, oil prices are climbing, trips to the grocery are becoming more painful, and interest returns on savings and retirement accounts have hit bottom.
These are all bad indicators as to what we can expect for the remainder of the year, but not really important in the overall scheme of things. Residential housing is not, and cannot, be the basis for sustainable long term commerce; I pointed that out some 12 months prior to the beginning of the housing bust.
The real news yesterday was that Social Security and Medicare are in trouble. I know, I know, you already knew that. But current estimates as to just how much trouble have skyrocketed. Dallas Federal Reserve President Richard Fisher gave a scalding speech yesterday regarding the magnitude of the financial trouble that the twin programs represent.
Mr. Fisher told news reporters that he didn’t, “really believe that you got it, and so I will give you some numbers.” Those numbers given for the unfunded liabilities of Social Security and Medicare alone, now stand at $99.2 Trillion; if we paid them today!
I remind you that a trillion seconds represents 32,000,000 years.
Medicare will begin taking in less money than it pays out…this year of 2008. The prescription drug liability alone, that was passed on November 25, 2003, has already incurred greater liability than the entirety of Social Security.
Mr. Fisher went on to speak to a point very near and dear to my heart; inflation.