From Bloomberg:
“Retirement ages will have to move to 70, 80 years old,” former AIG CEO Robert Benmosche, who turned 68 last week, said during a weekend interview at his seaside villa in Dubrovnik, Croatia. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”
Now, as a guy who is living in a taxpayer-funded villa after his bank-insurance-derivatives-hedge fund-ponzi company blew up, we know Benmosche is a hypocrite. In my view, management should be held personally liable a long time before taxpayers. That’s right, I believe in personal responsibility and that means no hiding behind limited liability and bailouts, no matter how “systemically important” you claim to be.
But let’s set aside disgust at government for first setting up this scenario via Gramm-Leach-Bliley, and then in 2008 throwing money at hypocritical grifters like Benmosche.
Is he wrong about social security and medical services?
Spending costs money. You can spend as much as you like so long as you have the revenues to do so. But the US government is failing to fund its current spending, let alone the $61.6 trillion (that’s a low-end estimate — the high end estimate is $127.5 trillion or 737% of GDP) of future welfare liabilities that the US government is mandated by law to spend.
So can America get the money to match future commitments without significantly raising the retirement age?
In theory.
In theory the Federal government can squeeze taxpayers. Perhaps Occupy will get their wish of raising taxes on the 1% to whatever figure they have in mind (though the way corporations and lobbyists have successfully colonised Washington, that seems exceedingly unlikely). But this is a globalised world, and the higher they tax the more activity will leave to lower-rate jurisdictions, and the less activity will be taxable. Tax evasion and avoidance will soar.
In theory America could have an organic recovery and start generating significant amounts of organic GDP growth. But right now, that’s a fantasy. Pinning your hopes to potential future economic miracles like 3D-printing, nanoengineering, widespread solar energy and synthetic petroleum is hardly good accounting practice, even if they are realistically the best hope of a rosy future.
In theory taxpayers could agree to accept less spending, as Benmosche suggests. But Americans overwhelmingly support social security and medicare, and politicians hawking cuts make themselves into political pariahs. Promises are promises, and politicians have suckered the electorate by promising so much for so little. If Greeks rioting over the retirement age seems raucous, wait ’til a politician tries to slash SNAP, medicare or social security.
Much more likely is the current trend of escalating deficits and printing money to pay the bills — and bail out washed-up corporatists like Benmosche (and his “systemically important” equivalents in Europe). Policy-makers can balance the budget and raise aggregate demand and GDP to whatever level they like (the “highest” level presumably being toilet paper) by throwing newly-printed money out of helicopters.
Trouble is, with the US dollar no longer functioning as the globe’s reserve currency it’s going to get harder and harder to hide the inflation overseas or on primary dealer balance sheets. Welfare recipients will keep getting welfare, but in the long run it may not buy much.
No, nations chose their paths long ago. America chose the path of big spending, big warfare, big bailouts and big welfare, and bailout-recipients like Benmosche who plead “systemic importance” are heavily responsible for that slide into fiscal irresponsibility. It won’t be the politicians, bankers and corporatists who created the mess who will have to deal with the fallout; they have foreign villas, foreign ranches, foreign bank accounts, and barbed-wire-shrouded EMP-proof survival retreats. It will be the average American who has done nothing wrong other than believing the words of politicians.
azizonomics 
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You know that there is plenty of money around to fund SS for decades. You also know that a 10% cut in defense spending over the next ten years could easily pay for retirement and medicare shortfall. What you are talking about is a ruse. The big failure is in the private pension sector. When Corporate America welched on its fixed pension schemes, the Ameican people were swindled. Government cooperated in this swindle, but the private sector elites benefitted and the middle class lost out. Any elite that betrays its leadership role in society in such a fashion, will reap the whirlwind.
I know that you could cut direct defense spending to zero and still not be able to balance the budget.
To make the various forms of welfare sustainable at present levels of commitment you will need fast-rising tax revenues from an organic recovery, probably as well as spending cuts on other projects (e.g. defense).
Is that possible? In theory. Do I count on it? Nope. Do I think you should try? You will try, there’s no doubt about that. Politicians who want to cut social security will struggle to get elected.
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Everything that came in (welfare, social security, pensions, et cetera) that APPEARED to benefit the common man ended up really benefiting the elite. It wouldn’t have been allowed if it DIDN’T benefit the elite.
The little guy was lulled into complacency by believing that his retirement was looked after. He relied on this assumption. He spent his money accordingly: bought the summer cottage from the contractor, upgraded his house, consumed corporate products (cars, boats, electronics) because he believed he would be okay in retirement.
Can you just imagine what the economy would have been like had he not believed the lie? He would have saved the money himself (which is what should have happened all along), he would have watched his money closely.
All of the corporate elites benefited tremendously by the consumption. Now that it’s over, everyone is going to get the austerity they should have had all along.
You were sucked in. The elites made the money off you, and you are now going to pay for it. The first ones into the ponzi scheme (your grandparents/parents) benefited, but you will pay.
Moral of the story: never let anyone else control your retirement. Do away with all of the 401K’s, pension funds. They are there to benefit the elite, not you.
Exactly.
‘The little guy was lulled into complacency by believing that his retirement was looked after. He relied on this assumption.’
My question is WHY? Why would ANYone ‘assume’ that ANYone else could be trusted with even a dime of his money? I’m going to ‘assume’ that I’m the oddball out.. certainly 2 ex’s would agree with that statement. However, one is deceased and the other is destitute, although he draws a generous retirement from USDA.. he is just a loser.. not only with money, but a lack luster general nothing..a wastrel, skirtchaser and overall empty soul.. I’m sure we all have known ‘human’s {I use the term loosely} like this one.. I haven’t seen him since 1988 and I’m the better off for it.
While single, raising my two children, I bought a beautiful home, paid the 30 yr mtg. off in 25 MONTHS, was completely out of debt, and never incurred another bill. I never ‘invested’ in anything govt backed, never paid an investor to invest MY money. Deceased husband played the stock market, and when the decline started in early 2000, I withdrew all the money and got out of that blood sucker just in time. Now I am able to save 2/3 my income, and have the ability to pay for anything I want or need, with cash. This is after ‘giving’ alot of money to others until I figured out just who and what they really were. I’m better off for that also.
My only question is this… why would anyone in the U.S. who can plainly ‘see’ what and who this govt. is, and aways was… still ‘trust’ them to get them through life.. I just don’t get it.
spiritwoman12 – I agree with what you’re saying, but the people did trust and they did believe. They did not “plainly see”. Someone wrote re “One Flew Over the Cuckoo’s Nest”:
“The residents on the ward are completely content with their structured lives. For most of them, they have always been told what to do, when to do it and have had to seek permission for the simplest things that other people take for granted. However, with McMurphy’s arrival on the ward the patients’ inherent sense of simple rights is reborn.
The men draw their strength and rebuild their confidence through McMurphy’s example. He challenges them and makes them feel as though they are all equal. They have awoken to the cruel reality that, through their unquestioning submission, they have become puppets to a higher Power that they don’t even understand. They have always naively believed that those who control the environment in which they live would do nothing to harm them”
The last line says it all. People WERE lulled into thinking their government would never harm them..
Too much worry, relax. I would advise Americans to give up the materialism re-connect to the spirit, stop trying to apply logic to the world, stop spilling the blood of innocents abroad and things may work themselves out for you. Killing people can become addictive for elites, they can feel God like and untouchable…but the universe has a way of restoring balance in the long term.
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I’m really loving your “Faces of…” series. When done, you could compile them all into a book and sell them. “Faces of Death” comes to mind.
wrt this douchebag… I watched his whole interview and felt like punching the screen so many times. The fact that he’s pontificating from his Croatian seaside villa makes it all the more aggravating. I don’t often support drone strikes. But when I do, I think this guy should be a target…
I was considering doing my President Choomwagon post as “The Face of Drug Hypocrisy”. But no, I’ll save my Obama’s Face for another day…
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” bank-insurance-derivatives-hedge fund-ponzi company blew up… Benmosche is a hypocrite.”
“…in 2008 throwing money at hypocritical grifters like Benmosche.”
Do you mean Hank Paulson? Benmosche took the CEO post in August 2009.
Hank Greenberg rather, although both were/ are frauds.
Yeah, he wasn’t in charge when it blew up, but he keeps taking millions of dollars of taxpayer’s money from a business that shouldn’t be in business at all and calling for people to work up to 80 while he suns himself in his mediterranean villa is just beyond the pale. By my standard that makes him if a grifter, even if he wasn’t immediately responsible for it.
Not related to this post, but if you decide to write about the student debt debacle at some point, take a look at these two sites discussing how law schools have ruined their students
http://thirdtierreality.blogspot.com/
http://insidethelawschoolscam.blogspot.com/
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To Backwardsevolution… sorry, no reply tab to answer you directly… You are absolutely correct.. Most people I know, are ‘that’ way. But who can they ‘blame’ for being lulled? When we are born, aren’t we each given a working brain? Aren’t we supposed to grow intellectually, and mature as we learn what this life is about and how to take full responsibilty for ourselves? People on earth really need to wonder why they are here in the first place, search out truth, not the lies we are told… nonetheless.. I do appreciate what you are saying, and you are right. I just wonder what excuse they have when they are retired, and have nothing to show for their lifes work. We are supposed to plan for the future, not so much to live in the moment. At least that is what I do. I confess, I am not the norm….but ultimately we do have to face the One who created us, and answer for the purpose of our life. I am not going to stand before Him and tell HIM stupidly that I was lulled, and have nothing to show for all the 24,467 days He put me here on earth. I have lived life to the fullest, and that doesn’t mean I ‘enjoyed’ it. Quite the contrary.. I fought the fight against evil, did the right thing, as much as I was capable, and provided for myself and my family as much as a human can. That is what I am really saying I guess… I have always lived for the future, and although always ‘in the moment’, knew there is someone bigger than me to please…. and to live for. I appreciate you taking the time to express your thoughts… thank you so much……at least we have given some food for thought here.. sounds like some is needed…
spiritwoman12 – I am not the norm either. I too have done like you, thought always of the future. Perhaps we are less trusting {of government}, or is it that we are more responsible? Or maybe, as women, more concerned with being secure, providing for our children? I don’t know what the answer is.
The less that government is involved in retirement, the better. I hope in future it gets back to where people do have to take more responsibility for themselves. Of course, that would mean less consumerism (which business wouldn’t like), but at least people would be in charge of their own lives and have only themselves to blame in the end.
Take care.
Surprised me! I never thought you are a woman… most women don’t talk like us.. in fact, neither do men.. for me, I learned NOT to trust a man early on… when the first one quit good jobs on a whim, (this is very early ’60’s) I knew I would always rely on my own skills to provide for myself and my children. I was raised in different foster homes, and no excuse, but never had any advice to lean on when I was on my own shortly after I was 17. It is a miracle I am who I am today. I attribute all my assets for the good, not so many, and the bad…. almost all, experiences in life. Somehow, I never took them personal. Our world has invented so many false gods, that to talk about the ONE TRUE GOD, is almost heresy. Because without HIM overseeing this evil place, we would have NO hope. He is everything. Life, breath, love, without Him, it is totally bereft of any spark of goodness. What it soon will be, without souls like us. We are the flickers of His light in a dark and evil world. Rev 12 explains why God had to create the earth/hell, in the first place. In essence, He was giving evil the last chance to repent for the murder of HIS family. ..His beloved wife and newborn baby son. But evil loves to do evil. With no oversight, we now live in a world where evil is the norm. The non holy bible has been rewritten to suit satan and his followers.. most of it is nonsense.. it even reads like a joke. Israel as Gods chosen?? God hates evil…..God is NOT a joke.. the parts that explain the truth takes a lifetime to understand. I have spent my life searching for the truth. I KNOW what it is. We are now, who we were then. We are the same…..and will be again..We either loved God then, or fought against Him in the Great War of Heaven. There is no other reason for a hell…aka ‘earth’. God created millions of planets… He has had forever to do so… we know that earth/hell is secluded from all other life.. so we cannot contaminate them with rebellious evil actions. God has given them many many years, at least 200 years, certainly not the thousands, millions or billions of years they throw around so casually.. everthing they tell us, their ‘subjects’ is a lie. Everything. So when someone says ‘there is no God’, they are hoping against hope that HE has forgotten what THEY did to His family.. but HE HAS NOT. They are going to be judged, and this is for eternity.. and they KNOW what the judgement will be. We are now on the slippery slope of the abyss.. those who love HIM will be taken out of hell… not as a group as ‘religions’ preach.. God hates ALL religions..they are liars and warmongers…. but as individuals… all those who God created were created to be someone special to HIM… not groups of anarchists, warmongers, thieves and liars. We are HIS SPIRITS. His heart. He gave us the choice to choose ‘them’ or Him, again, on earth/hell. There never was a choice for us, really….. we will always love Him, whether we know why, or don’t. There is that part of us that is part of Him. With me, I am part of Him…. but HE is ALL of me. And everthing that I have personally had to endure on earth is ALL that matters to me. I have done it for Him. Just for the love of HIM. HE is ALL that matters. Without HIM….. there is NOTHING.
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