8/13/2010

A frightening and uncanny similarity

Please read the extract below from an article by Laurence Kotlifkoff, an economics professor of Boston University. ‘We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare and Medicaid that, on average, exceed per capita GDP. The annual costs of these entitlements will total about US$4 trillion in today’s money. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year. This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck. Mr Herb Stein, chairman of the Council of economic Advisers under US President Richard Nixon, coined an oft repeated phrase: “Something that can’t go on, will stop.” True enough, Uncle Sam’s Ponzi scheme will stop. But it will stop too late….’ Just think of our CPF scheme, and also the public housing scheme. The ever increasing price of HDB flats, direct from HDB or resale, is like taking from the young to pay the oldies. And of course, promising the young that the housing bubble will go on expanding, never ending, and they will reap their millions tomorrow. How long can this go on? Or as Stein above said, ‘Something that can’t go on, will stop?’

11 comments:

Anonymous said...

Hello and Hi to all.

A question struck me this mornig like a lightning as I update myself in Blogosphere.

ARE SINGAPOREANS ORIENTAL PEOPLE ?

Singaporeans are digesting western dissertations and their commercial philosophies. Have they no recollection of Oriental Wisdoms from India, China, the Middle-east and old civilizations liked Greece, Mesopotamia and Egypt etc?

Day in day out, bloggers are quoting this American that Angmo and forgotten all the great forefathers of their own origins. No wonder the world goes topsy turvy. When a Race uproots its own culture and adopt and bastardize his/her very own, the bearings are all lost. Depending on science and technology for progress only leads to the atrophy of the essence and nuance of living which is basically a cultural one. The meanings of existence is how to live a happy life and not how to be more artificial by the applications of sciences and technology.

Yes orgasm and esctasy can be had by artificial means but they will never be meaningful when compared to the nature-endowed ways.

Get the hell out of your artificial intelligence before one becomes a digit.

Anonymous said...

Ya why are Singaporeans all like pseudo and fake angmo?

Chua Chin Leng aka redbean said...

You are quite right in your observation. Singaporeans are westerners, educated in western language, fairy tales, nursery rhymes, history and philosphy. Thus they think like westerns and will only take westerners seriously.

Tell them any quotes from any Asian or African sages and they will be at a loss or will disagree. Ok, one exception, Jesus.

To understand and discuss with Singaporeans, you need to speak their language and understand who they chose to believe or listen to.

Many still believe that Kim Jung Il is a madman because the westerners said so.

Anonymous said...

The US ponzi scheme cannot be stopped, same as ours.

How on earth is Obama going to double US exports and who is going to buy all their products, short of selling arms to fight another major war. Every country is talking about trying to export more, not import more.

But that is the problem for Obama to solve.

Here in red dot, the ponzi scheme cannot stop because once that happens, a big all round crash will ensue. And so-called upgraded assets and CPF savings will all turn into dust, be it invested in properties or otherwise. So, by all ways and means the ponzi scheme will never be allowed to die.

And since it will never be allowed to die, future generations will suffer.

Anonymous said...

The Day the Ponzi Perpetrators left Sin, the Ponzi Scheme will naturally stop and the worst misery for sinkapooreans shall start. It is not far away.

Matilah_Singapura said...

America is ageing at a faster rate than Singapore, and the system in advanced welfare states like the EU nations, USA, Canada and Australia is that taxation is used to pay for the social welfare.

This was brought in during the industrial boom years where there was about 10 workers supporting on welfare recipient.

However if you take Aust, the welfare state has “advanced” here to the point where 1/3 of the population receives some kind of social welfare. That means 2/3 of the population support the “needy” 1/3, and it is all done trough the redistribution of wealth: taxation.

Singapore will face similar problems: the CPF is a pyramid scheme and will suffer a cash/ payout crisis in a matter of time. The govt will respond as it usually does to crises: rationing and more tax.

It will “ration” out the amount of CPF you can collect, “ration” the health care by such things as means testing or age-based triage (the older you are the less they’ll want to cure you --- they’ll just keep you alive on drugs), and believe it or not TAXATION in Singapore will increase.

My suspicion is that it will start with property taxes, cars and it already has been attempted with success in the GST. The GST started at 3%. It is now 7% which means it has INCREASED 133% -- most people don’t see that.

The state will survive longer than the people, because the state has absolute territorial power. If you look at failed states, look at the people: they were well and truly fucked before the state itself failed.

The S’pore state is a great shape, and it will continue to be in great shape at the expense of the weakest people in the society.

Better get that foreign PR as soon as you can :-)

Chua Chin Leng aka redbean said...

The hardlanders were so happy when their flat prices shot through the roof. They did not care who is going to pay for it.

They did not know that it is preparing for higher property tax collection.

The best part, while they have to pay more property taxes, probably 90% are owner occupied and the increase in value does not bring them any gains.

Anonymous said...

That is the beauty of the argument which is sweet music to heartlanders, seeing their flats valued, in time to come, by the millions.

They failed to realise that their money, their CPF, are turning into joss papers.

Anonymous said...

Certainly not the case if you cart away your money to a foreign land. That is if you're wise to do so, that's it.

Anonymous said...

Wherever you cart your money to, or hide away in, the end result is you still have to leave it behind.

Matilah_Singapura said...

Sure, everyone dies someday.

But using that argument is weak. The fact that you are alive now means that you have to deal with reality: i.e. as long as you are alive you must make choices and take actions -- there is no escape from these facts.

That being said: do you "surrender" and play the victim and use the tored "we all are going to die" argument, or do you change your mind and act in ways to reduce "pain" and increase "happiness"?

Up to you.