Gen X, Millennials and their parents are screwed — Social Security will be bankrupt in 16 years

[soundcloud url=”https://api.soundcloud.com/tracks/165363543″ params=”color=ff5500&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false” width=”100%” height=”166″ iframe=”true” /]

Videos By Rare

Kurt Wallace: This is Kurt Wallace and our guest today on Rare is Charles Goyette author of “The Dollar Meltdown” and Charles, thanks for being with us today on Rare.

Charles Goyette: Kurt its great to speak with you again.

Kurt Wallace: Charles you just wrote an article “Under-saved and under-invested.” This is a very important piece of work detailing what people in retirement right now the baby boomers are facing. Could you give us an oveview of kind of the economic calamity that’s happening right now with those heading for retirement or already in retirement?

Charles Goyette: Sure Kurt, the baby boomer demographic because everybody knows now is just a huge demographic bulge. If you look at a chart of it somebody said it looks like a python that’s swallowed a pig. It’s just this huge demographic bulge of people that were born after WWII. Well, they’re aging now – they’ve turned grey and 10,000 of them become eligible for retirement benefits every day. 10,000 a day in other words are now eligible for full social security and medicare. Every single day another 10,000. So, this is a huge demographic impact on things like Medicare and Social Security. And one of the collateral problems, one of the things that intensifies the problem in my view is that all of this Kaynesian big spending government that we’ve heard from presidents and Fed officials and professors for a couple og generations about spend our way to prosperity, oh the government must spend more, oh deficits don’t matter. And all of that economic poppy cock of course filtered down to the level of the people.

You know a fish rots from the head. The people are corrupted from the top by the government and this is a very corrupting ideal that we can spend our way to prosperity. So, now Kurt, you’ve got a situation that well USA Today just reported the other day that 14% of Americans 65 and older have no retirement savings, none, 14% of them. And then those nearing retirement, those between 50 and 64, 26% of those have no retirement savings they have none. In fact, Dr. Paul and I did one of our radio commentaries recently about, I found this to be a shocking story. It’s not numbers but its a slice of life, it’s a picture of what has happened to these older generations. A story in the LA Times about the enormous number of people between the age of 50 and 64 that are moving back home with their parents. I mean everybody knows about the Millennials and failure to launch and people living in their folks basement and stuff. And they can’t get jobs and people burden with their student debt that can’t find decent employment. This is about older people, the 50-64 demographic moving back home with their parents if you can imagine that?

Kurt Wallace: Oh, that’s incredible. In terms of how this is developing, what kind of numbers are we looking at in terms of when social security might run out?

Charles Goyette: Alright well, first of all the official numbers that social security propagates are of course misleading. Because it is after all the government and if a private business ran a financial scheme like the government runs social security everybody be looked up they’d all be in jail. But the government’s numbers had been that social security with the trust fund would be solvent until 2049 and then it would run dry. Well, we had the intervening event of the mortgage meltdown, the panic of 2008. The effects of which we are still suffering. And so, that’s been revised and they’re saying well the trust fund will be exhausted in the year 2030, so 16 years from now. But even that is misleading because as you know Kurt, there is in Social Security there is now security, there’s no trust and there’s no fund. In other words the money that people have been paying into social security for a lifetime was spent. The government has spent that money. And the only way that the government of the United States can meet its obligations to those people that paid in for a lifetime is primarily borrowing more money from places like China. Even Russia, yes, Russia even is a creditor of the United States treasury. Borrowing more money from places overseas. Piling the debt up on little kids. So, the little children of the Millennials and so on now. And adding to the debt or by simply printing the money. Because the trust fund does not exist the money has been spent.

Kurt Wallace: Now, the baby boomers are the first real generation born with social security in mind they grew up with this idea that this is what retirements all about. They didn’t focus on savings a lot of them because either they couldn’t or inflation got to them or recessions, whatever it is. But now we have another generation Generation X. The younger generation between the Millennials and the 50-64 year olds who are moving back in with their parents. What does this mean for them. Based on what you’re telling me they’re not going to receive social security?

Charles Goyette: It’s even worse than that. They are in a word, well they’re screwed, basically. Not only are they not going to get social security that they’re paying in for but the demographics of social security are shifting so badly. I mean Bearnie Madoff would have been proud of this thing when social security got under way in its early years. Well even in 1945 there were 42 people paying in to the social security Ponzi scheme for every retiree. Well, you can float a game like that for a long time, you know. As long as people are putting money in Bernie Madoff’s scheme than were seeking to withdraw. If you had a 42 to 1 ratio of depositors to withdraws Bernie Madoff could have gone on forever. But that number is going down and Generation X is in the crosshairs. I mean today from 42 people paying in for every recipient after WWII were down today to 2.9 maybe even a little lower than that as we speak. 2.9 people paying into social security for every retiree. In the next 15 years or so that’ll be down to 2 workers for every retiree.

So, not only have these people been loaded with a lifetime of debt that they will be struggling under but now you know for every two of them is going to be expected to support the retirement of one of the wealthiest generations in history. And ultimately Kurt, ultimately where we’re headed is one worker per retiree. So, what they have created for us is nothing short of a demographic war. I mean these people are not going to put up with it. They’re simply not going to put up with it. And of course, the only means that the government has of meeting these obligations is basically involves the destruction of the currency. So, the Generation Xers will find themselves burden in debt that has been about which most of them had no say so in the creation of these huge liabilities. All of these underfunded liabilities. And then they get to suffer the destruction of the currency as well. Boy we’ve done them really proud haven’t we?

Kurt Wallace: Now, we have the Millennial generation. The third leading cause of death among Millennials at this point is suicide. A lot of that’s been contributed to the easy access of prescription medications to deal with the depression. But what’s the root cause of the issues around this generation? A lot of analysts say that it’s economics and they don’t leave home. They’re dealing with this massive debt, the wars. Everything that has put pressure on the new generation coming up. What are some solutions that we can pass on to these wonderful kids that are in their from 18 to in their 30s?

Charles Goyette: Well, let me approach that through the back door if I could. Let me first say the destruction of the US dollar, the destruction of the currency, the devaluation the debauchment, the purchasing power of the dollar has not helped. So, that gives you a hint at what actually could help. I mean the average social security check, imagine someone trying to survive on this. All of those people, the 14% of those 65 and older that have no savings. The 26% of those nearing social security age have no savings. Imagine them trying to survive. The average social security recipients monthly check is $1,294. That doesn’t go very far. But if you take somebody. If you take just as a thought experiment, if you take somebody whose turned 65 today and becoming eligible for social security benefits. If you go back to when they were 22 say went to college and then they entered the workforce and began paying in. In 1971 they would have been 22. And you look at the value of the US dollar in 1971 when they entered the workforce and started paying in, the actual purchasing power of that dollar today, had it been protected – had the currency been reliable. Then $1,294 monthly check that the Social Security recipient gets, the purchasing power of that would be the equivalent of $7,612 and suddenly that makes the picture a lot different. But instead the currency has been destroyed by the activities of the Federal Reserve, the monetary authorities and the fiscal authorities.

Your Republican and Democratic elected officials that think that we can spend our way to prosperity. The currency has been destroyed. In fact, in 1971 when our hypothetical worker turning 65 this year started paying in at the age of 22. That was the year that Nixon severed the last tie of the US dollar to the gold standard. So, the monetary authorities were free to print dollars by the trillions as they have done during this last escapade. So, we’re still waiting for the full impact of that currency debauchment. So, this is a back door way of saying you know one of the surest ways to fix the economy is to have a sound money. It would be good if we did.

Kurt Wallace: And so for Millennials it’s something that they’re facing that we would potentially go back to the gold standard?

Charles Goyette: Yes it would be nice if that happened or at least they can protect themselves from this collective calamity of the United States government’s recklessness. And protect themselves by understanding that these monetary crisis are not rare. It’s not the world’s first currency rodeo. During an event like those that are developing here in the United States. During those periods gold has always stood out as a dependable unit of purchasing power that has lasted for thousands and thousands of years. So, if the society, if the culture, if the government, if the state, if the people collectively won’t fix the currency fraud, then the people need to insulate themselves and their families protect themselves and their families from it. By insulating themselves from the coming woes of the US dollar.

Kurt Wallace: Charles Goyette thanks for being with us today on Rare.

Charles Goyette: You know Kurt it’s always great to talk to you, thank you so much.

Share via:

Leave a Reply

Exit mobile version