Showing posts with label inflation. Show all posts
Showing posts with label inflation. Show all posts

Tuesday, October 5, 2021

Millions of Americans are going to die poor: Something to talk about at the Jackson Hole Economic Symposium

 About six months ago, I received a letter from the Social Security Administration informing me that it had miscalculated the amount of my monthly Security check for the past six years. I had been overpaid, the feds said, and it would not send me any more monthly checks until it collected the entire amount the government said I owed.

Meanwhile, a Baton Rouge strip club received a Payroll Protection check for more than a million dollars. And the press reported that more than a thousand Louisiana prisoners received enhanced unemployment checks totaling $6.2 million. 

I will survive the loss of a couple of Social Security checks, but not every elderly pensioner could take the hit.  For me, this incident is just another sign that our government does not care about the elderly.  

The U.S. Department of Education, for example, garnishes the Social Security checks of thousands of elderly student-loan defaulters, driving many of them below the poverty line. Congress could pass a bill to stop this cruel practice, but apparently, it is too busy to address this outrage.

A great many Americans are entering old age with no savings, no pensions, and no assets.  These people will die poor.

And it is going to get worse. Inflation is on the rise, and inflation--it is often observed--is one way the rich rob the poor, including poor people who are elderly.

Jerome Powell and Janet Yellen assure us that the recent uptick in inflation is transitory, but that's bullshit. Our national debt is $29 trillion, and yet the government keeps printing money. The price for just about everything is going up--including food. Five bucks for a loaf of bread?

In one of his plays, Tennessee Williams observed that you can be old or you can be poor, but you can't be both. Unfortunately, that's not true. America is about to see millions of impoverished old people as inflation heats up.  

How much time did the financial fat cats spend talking about poverty at the Jackson Hole Economic Symposium last August?  I would guess not much.  After all, there aren't many poor people in Jackson Hole.

I have a suggestion for next year's economic summit meeting. Instead of holding it in Jackson Hole, book it in Anadarko, Oklahoma--my hometown.  Lot's of poor people there. 

But attendees should book their reservations early. The Budget Inn has only a limited number of rooms, and it would be unseemly for Paul Krugman, Janet Yellen, and Jerome Powell to bunk together.

Anadarko's Miller Theater: A great venue for next year's Economic Symposium






Friday, July 2, 2021

40-year home mortgages, 9-year car notes, and 25-year student-loan programs: This will end badly

Interest rates, as the tv hucksters constantly remind us, are near historic lows. So now is an excellent time to refinance your mortgage--maybe take out some equity to upgrade the bathrooms, take a little vacation, or purchase a home entertainment center.

Or maybe it's time to buy a new vehicle--perhaps a premium class crew-cab pickup, an Audi, or a BMW.  At today's interest rates, the monthly car note won't be that high--especially if you finance your new set of wheels over six, seven, eight, or even nine years!

How about those student loans? You don't make enough money to pay off your college debt under a standard 10-year repayment plan because you have other bills to pay.  But that's no problem. You can sign up for an income-based repayment plan that will stretch out your monthly payments over 25 years.

Twenty-five years is a long time, but maybe the federal government will forgive all that student debt--including yours. After all, what's $2 trillion among friends?

So is everybody happy with their new homes, fancy cars, and impressive college credentials? If so, enjoy the feeling because it won't last much longer.

Inflation is on the move, and who believes it is transitory as our Treasury Secretary tries to reassure us. Wages will probably rise to cover inflation for some employees but not for others. And if you a retired person on a fixed income, inflation will soon erode your standard of living.

That vacation cruise to Greece that you've always dreamed of? Maybe you'll just go to Oklahoma's Boiling Springs State Park this year--a lot cheaper.

Of course, you can't fly to Boiling Spings because airfares are way up, and car rental rates are just short of obscene.  So you will have to drive.  But you should do it soon because gas prices are on the rise. Oil is already back up to $75 a barrel.

So maybe you'll skip a vacation this year and enjoy your backyard--grill a few steaks or hamburgers. But that's becoming more expensive too. A premium steak at the grocery store can cost you $25 a pound.  But hot dogs are cheaper--especially the ones that aren't all beef.

There's nothing the people living in flyover country or modest urban neighborhoods can do about the scary shifts in the national economy.  We will have to tighten our belts, pay off our debts, and cut back on our lifestyles.  

It won't be fun, but we will probably all be OK if we don't do something stupid like refinance our home over 40 years, buy a car on a 9-year note, or borrow $100,000 to go to college.  But most of us are too smart to do something reckless like that.   Right?


You will own it outright in only 9 years!