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Entered By: Mark
Entry Date: 2011-08-06 14:40:24
Subject: Lempira Continues Climb Against Dollar
Message:
 

Returned to bank today, a thrice weekly event these days (everybody deals in cash here). Today found that the Dollar continued its fall to the Lempira. Now the US Dollar is a full 2% lower in value from the rate it has maintained for five years up until two weeks ago. The first value decline, about 0.5%, was almost laughable. I thought the banks here were just taking advantage of the whole congressional fiasco regarding the US debt. Now I'm a little nervous about the Dollar.

In the USA, hating congress is a national past time. Congress is pretty well blamed for all the economic ills among other problems. Unfortunately for them, they are faced with an impossible task. They face an aging population, thanks in part to abortion, meaning an increasing amount of Social Security payouts. When the SS program was first enacted, there were much fewer beneficiaries in proportion to working citizens. The reason? Although 65 was still the age that benefits began back then. Few people think about the fact that life expectancy back then was 65 years. Thus, only people when lived longer than average did they collect. In other words, only half the population would ever see SS benefits and for a short time on average. For this reason, the program is called OASDI or Old Age Survivorship Disability Income.

Today, life expectancy is 75 years for men, 78 for women. In other words, most people will receive SS benefits. Unfortunately, the benefit age has not risen with the times. Unfortunate, in that we cannot sustain the program. Raise taxes? Are you kidding? What congressman doesn't want to be re-elected? Cut defense spending? Then the soldiers, their families and extended families will give you the boot and we endanger national security. Cut Social Security? Get out! That's the worst of all. You'd be branded a senior hater complete with editorial cartoons depicting you tossing grandma out into the street.

In my mind, the most sensible approach to the problem of runaway entitlement spending is to raise the SS benefit age for anybody not already aged 65 to only begin receiving benefits at age 75. In other words, nobody would stop receiving their benefit checks if they've already started receiving them. However, there would be no new beneficiaries for ten years.

Yes, this would be very unpopular with those of us whom have seen our paychecks reduced 8% our entire working lives. Yes, there is another invisible 8% cut (employer matching contributions). Effectively our paychecks are cut about 15% to fund SS and Medicare. The alternative is to watch the US effectively fade into obscurity and falter in economic turmoil. We simply cannot borrow forever.

Meanwhile, I've got to figure out how to earn more money while our third world currency climbs against the US Dollar.





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