The Bankrupt of America

‘The US is bankrupt and it doesn’t even know it. Economy won’t be big enough to handle US$4 trillion in entitlements owed to 78 million baby boomers. Let’ get real. The United States is bankrupt. Neither spending more nor taxing less will help the country pay its bills….’ This is the heading and first paragraph of an article in Bloomberg, by Laurence Kotlikoff, Professor of Economics at Boston University. Yeah man, The US of A is a bankrupt country. And it is still strutting its stuff everywhere thinking that it is still the big boy in town. But the best part of this fiasco is that they think that they can act rich and spend their way out of this rut. They are going to print and print more greenbacks for the Americans to go on spending. This is the happiest solution that anyone can ever think of. In fact it is ingenious. A bankrupt spending like a millionaire and as if there is no tomorrow. And the problem will go away. When is America going to carry a bowl and go a begging in the streets of London?

Notable quote by Seelan Palay

“Before we begin, I’d like to clarify that I’m in the dock in shackles, cuffs and chains not because I have committed any crime. I am here in this state because of another unjust law administered on behalf of the PAP Government.” Seelan Palay I copied the above quote from jacob 69er. Seelan was speaking to the judge just before the proceeding of his trial. I totally disagree with the way we treat and handle our political activists with cuffs and shackles. Do we have to be so mean? They are not criminals and not violent. Many are well educated and responsible citizens. The Americans have their Guantanamo and think it is an acceptable thing. And the world kept quiet about the whole sordid happenings there.

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?’

What is $10 million?

This is a statement that a friend of mine used to gripe about. He was cheesed off when he heard this statement made by an elite. That is another world of successful people who have made literally tons of money and $10 million is not money to them in the real sense. It is better that we come down to earth and talk about $100k. What is $100k? Some foolish people take this just as a number. What is $100k if the resale price of a 3 rm or 4 rm flat goes up by that amount? To the owner or seller of the flat, wow, I am richer. Think again. What is this amount to the young couple earning a combined income of $3k means to them? It simply means that they will have to work for 3 years for nothing, and that is if they did not spend a cent, to earn $100k to pay for the flat. In reality, people who earn $3k can at best save $500 pm. This means his debt or burden because of this $100k increase in the price of a flat will drag him down for at least another 10 years. For those foolish people who cannot see any meaning in a $100k increase in public housing price, please sleep on it. Or you may want to rubbish it as another gripe that is best not spoken and not heard. It is the problem of the losers.

Be thankful for the gripes

What would this island become if there is no gripes? One thing for sure, we will continue to see 3,000 public flats being built annually and the resale price of 3 rm flats could be $1m by now. And yes, our population will have hit 6m! And SMRT will be happily recruiting pushers to push the commuters into the sardine packed trains and happily announcing more profits. What else could happen? Ministers would be laughing to the banks with $10m salary. Floods in Orchard Road will be time for celebration and parties. Car insurance would be more expensive than the value of the car itself. And there will be many more mind blowing stuff that would be taken for granted, or as normal and acceptable. Gripes are like symtoms of a sickness. The symptoms appear, crying for attention to treat the disease. Failing to heed will only see the disease going from bad to worst. Imagine if there are no symtoms, like no gripes, the victim could be dead sooner without knowing why. Be thankful, be very thankful, that the people are whining and griping. Only deaf frog would not be bothered with whining and griping. They would not know and live in their own state of oblivious bliss. And some choose to be deaf frogs. The drones of vuvuzuelas are irritating. But they serve a very important purpose. Why have Reach? Waste of time and money indeed, if griping is seen as unhealthy and to be ignored, buried under the carpet. Don't want to know. Put on that 4m smiles and everything will appear fine.