Inside This Issue You Will Discover…

*** The Curious Novelty of the Rubik’s Cube
*** Deception, Fraud, and Deceit
*** John Maynard Keynes
*** And More

The Curious Novelty of the Rubik’s Cube

“Kathleen Casey-Kirschling, born on January 1, 1946, is acknowledged as the nation’s first baby boomer and the first to apply for social security benefits, for which she will be eligible in 2008.”

We came across this Yahoo News article titled “US Braces for Baby Boom Retirement Wave”, by Rob Lever, on Christmas day.

We found this first tidbit of information about Ms. Casey-Kirschling to be intriguing…  Like the original Rubik’s cube, the first of anything always has a curious novelty to it.

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But it was several more lines in that really sparked our interest…   

“The cost for government-funded social security and medical care for the boomers leaves a funding gap of between 40 and 76 trillion dollars for next 75 years, according to various estimates.”

We’ll pause here to marvel and gawk at the mammoth…gargantuan…Grand Canyon sized abyss that is the funding gap.

If you’ve never seen a $1-trillion dollar bill before, don’t worry, we haven’t either.  But if you had, it would have a $1 with twelve zeros after it – like this $1,000,000,000,000.

For practical purposes, it would be too big to fit on the bill. 

But that’s just one.  The cost to pay for government-funded entitlements – those already promised to baby boomers – would require between 40 and 76 of those $1-trillion dollar bills.

We’re not exactly sure why…  But for some reason, our brain’s too small to grapple with such large numbers.  In fact, for us, they’re so big, they’re meaningless.  The range differential alone strikes us as ridiculous.

Deception, Fraud, and Deceit

So how will the government pay for this?

The short answer: They won’t.

But no politician – except Ron Paul – will tell you this.  And most won’t realize it is happening.  That’s because no formal default will occur…the U.S. Government will not officially go broke. 

What will happen, though, is that its citizenry will live in increased poverty.

You know why as well as we do.  But, for kicks, we’ll tell you again.  It’s because the government – with the help of the Federal Reserve – will paper over the mammoth funding gap with inflation.

In other words, they’ll pay for it with deception, fraud, and deceit.  For, it’s the politically expedient thing to do.

John Maynard Keynes

Here we’ll turn to John Maynard Keynes for edification.  From his 1919 work titled, “The Economic Consequences of the Peace”…

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.  The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

There you have it – deception…fraud…and deceit.  And it’s so mysterious that “…not one man in a million is able to diagnose it.”

And even if you’re one of the few to diagnose it, if you’re saving money or living on a fixed income, it presents a nearly insurmountable mountain of a problem.

The only ways to maintain your current standard of living is either to dramatically increase your income or to invest your savings very wisely.

We recommend doing both.

Sincerely,

M.N. Gordon
Great Depression Online

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