September 24, 2007

GM workers who went on strike today have over $51 billion in unfunded retiree costs. Care to guess how much the US government has unfunded?

GM is smartly trying to get this $51 Billion growing disaster off its books, otherwise sure bankruptcy is around the corner. So GM workers, not understanding that they make crap cars for a crap company who has no future, went on strike today. Good luck with that. Not smart.

But folks, the US government doesn't even bother to put the future costs of retirement and health care liabilities on its books, or even have a discussion about the issue. That's right - what US corporations have to do per GAAP, the US government doesn't have to do. Or even talk about.

So that $9 Trillion debt you think we owe and are about to possibly default on? Not even close. Try $50 Trillion, per the US Comptroller report (not a stat you'll find on Fox News for sure).

So what does the future hold for America? Bankruptcy, default or dollar destruction around the corner, and radical change to our "promised" yet unfunded benefits programs and tax rates.

Thank you Democrats. Thank you Republicans. Thank you ignorant voters. You fuc*ed America. And you immorally and selfishly screwed generations of Americans to come.

You thought the housing crash was big. You ain't seen nothin' yet.

BenefitsPANIC?

56 comments:

k.w. - southern ca. said...

Keith -

You couldn't have said it better.

The housing crisis is just one sign that things are going VERY wrong in this country, VERY quickly.

October is right around the corner, and this blog is apt to get very busy then.

- Kevin

Anonymous said...

Fu*k the UAW

Fu*k unions

Fu*k all you socialist assholes.

I hope GM keels over and dies and all those greedy asshat unionized lazy pieces of filth die off with it.

Anonymous said...

Explain to me again why you want the govt to run health care? Same govt that has destroyed everything it has touched....you want THAT government to decide when you can see a doctor?

Good god man, are you insane?

Paula said...

Uh...what about those state and local governments too?

As the Federal government becomes more unresponsive and inept (Hurricane Katrina, anyone?), local governments can't NOT show up for trouble, because it's right on their doorstep.

I bet there's some whopper pension promises there, too. These will be smack up against everyday, acute demands that can't be evaded.

Ouch, America.

Anonymous said...

Medicare is for sure the elephant in the room.

keith said...

The LAST thing I want is for government to run health care.

Or retirement benefits of any kind.

Government IS the problem. And we're beyond screwed.

Anonymous said...

pkk here-

When GM closes it's doors, it will
turn out to be the last straw; our
economic/social network will implode:
no unemployment, welfare, food stamps. People will be penniless.
Doors of unemployment will be shut
against workers. Other factors will
of course have played their part.

Anonymous said...

has government screwed things up enough that you need them to help and fix things??????/ ha..ha...suckers, something about teet jokes and the comming elections................

Anonymous said...

"Not even close. Try $50 Trillion, per the US Comptroller report (not a stat you'll find on Fox News for sure)."

Over WHAT FUCKING TIME PERIOD??

Gawd I hate it when people wave around large numbers without the context.

Anonymous said...

"Government IS the problem."

No, VOTERS are the problem. Dumb-ass Americans vote for dumb-ass politicians who don't believe in government, or government being run properly, and then dumb-ass Americans are surprised when the trains don't run.

Duh.

Anonymous said...

then if you dont want the govt to run health care why do you support Hitlary? Why do you support Osamabama? Why do you support Edwards? Reid? Pelosi?

They allwant socizlied health care. God damn, you people are so clueless.

keith said...

No timeframe and read the damn report.

Like GAAP dictates, the $50 trillion is achieved by listing known liabilities as of now - those that have been promised benefits.

The problem with goverment spending on the other hand like prescription drug benefit is the cost of programs is quotes usually in 10-year windows. Like in year 11 the program will go away.

Government is corrupt. The ponzi scheme is nearly over.

___________


The U.S. government’s major reported liabilities, social insurance commitments,
and other fiscal exposures continue to grow. They now total
approximately $50 trillion—about four times the nation’s total output
(GDP) in fiscal year 2006—up from about $20 trillion, or two times GDP in fiscal year 2000.

We all know that it is hard to make sense of what “trillions” means. One way to think about it is: if we wanted to put aside today enough to cover these promises, it would take $170,000 for each and every American or approximately $440,000 per American household.

keith said...

Funny, how 'bout that, right on schedule, these two reports today:

Sen. Barack Obama, D-Ill., is considering a major tax hike on the rich to shore up the nation's Social Security system.

http://abcnews.go.com/Politics/story?id=3638710&page=1

and then...

Administration Urges Social Security Fix

The Bush administration said Monday the only way to permanently fix Social Security is through some combination of benefit cuts and tax increases.

That was one of the key findings in a new paper on Social Security released by the Treasury Department in an effort to achieve common ground on the politically explosive issue.

"Social Security can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax increases," the paper said. The Treasury paper said that while other changes to the giant benefit program might be desirable "only these changes can restore solvency permanently."

http://www.breitbart.com/article.php?id=D8RRUI6O3&show_article=1

borkafatty said...

Fu*k the UAW

Fu*k unions

Fu*k all you socialist assholes.

-----------

And Fu*k you..good day sir.

consultant said...

There some smart comments in here and some really throwback views. I know it will not help but..here goes.
The founding fathers, an interesting group, started by creating a government, not a private corporation. They understood something about public/private roles and the different responsibilities of each. The knew that a strong but reasonable government was as important as private liberties, including free enterprise.
Okay. If that is too much for many of you to digest, don't bother to post here anymore. This is a good blog with interesting information that doesn't need stupid posts.
Have a good day. And quit shouting.

Anonymous said...

Why do people care if the Republicans or Democrates gain power? The only thing that matters is that the govenment is creating enough money to destroy our dollars value. If you want to do anything about the problem---get out of the dollar by buying gold.

KIA_owner said...

As a KIA owner - I love the KIA - GM can just roll over and die. I wouldn't let them make my soapbox car. And I have to say this - because it has to be said : GM employees are worthless, I will say what others won't.

Anonymous said...

Obama wants to give subprime tax credits. Wonderful, subprime borrowers not only get a bailout, they will get a tax credit every year going forward.

Anyone care to tell me why they are Democrats again?

The guts of Obama's plan is to offer a $1,000 annual tax credit for middle-class American families with two earners. This, he says, would cut taxes for 150 million Americans or roughly half the population.

Then he would grant a mortgage credit of 10 percent for homeowners earning up to $50,000 per year or a cut for them in taxes of roughly $500 annually. Third, he would eliminate income taxes on retirees making less than $50,000 per year. And he would cut the paperwork burdens associated with filing tax returns in some instances.

JAG said...

Hm.
-
The right people just haven't been in Government yet! That is why it's so messed up!
_

HA HA MOTHERFUCKING HA.

Seriously you owe me a new keyboard 'cause this one has milk all over it.

Vandal said...

I haven't seen any mention of GM getting rid of that stupid 'Jobs Bank' that is a complete waste of money.

Right now if GM doesn't have a job position for a particular UAW worker, they end up in the 'jobs bank' were they get paid to sit around and do nothing until a position becomes available.

Things like that and the UAW demand for unlimited free healthcare after retirement are slowly bankrupting GM.

Anonymous said...

RE: $51 trillion nonesense

That's like me saying over the next 25 years I will need $5 million to cover my living expenses but I only have $50K in the bank, therefore I have a $4.95 M deficit.

OK I suppose that is technically true. But I also expect to make well over $5M in income over the next 25 years.

Your $51T figure assumes tax revenues will never grow pas today's levels.

Anonymous said...

We all know that it is hard to make sense of what “trillions” means. One way to think about it is: if we wanted to put aside today enough to cover these promises, it would take $170,000 for each and every American or approximately $440,000 per American household.

-------------------------------------

170K. Lets see, assume that a person will work for 30years in his or her life, you need only raise their taxes by an yearly average of 5.7k or so. No problemo, cut back on spending and raise taxes. Those receiving the majority of the benefits are probably not paying much in taxes, so a combo of cut and tax means everyone shares the pain.

Heck, I have already had 40k withheld from my salary this year for federal, medicare, and soc sec. I would be up for a tax increase if they would use it to get out of this mess we are in but I know that won't happen. Oh, the tax increase will happen but it will be used for more spending (national health care, mortgage tax credit for those how don't itemize on their tax returns, etc, you fill in the spending blank).

Anonymous said...

Gawd I hate it when people wave around large numbers without the context.

----------------------------------

Yea, it is almost as bad as when they use time frames to help make their point. for example:

bush's drug benefit is always described as the cost over 10 years. 700Billion over 10 years.

obama talks about his tax cut only costing 85 Billion a year. How about obama using the number 850Billion over 10 years. Put that way, you could simply round up to "obama's 1 Trillion dollar tax cut**"





** calculated over a period of 10 years.

Anonymous said...

Like GAAP dictates, the $50 trillion is achieved by listing known liabilities as of now - those that have been promised benefits.

-------------------------------------

But that 50 trillion is not due in the next 24 hours. It will come due over a period of time.


for example, I have 150k of mortgage liability. Seems like a lot until you realize that it is over the next 20 years.

My family's "grocery liability" is probably around 100k over the next 20 years?????

OMG, just for food and shelter I have 250k of liabilities....... I am doomed!!!!!!! better sell me short.

don't get me started on my clothing liability.....

Anonymous said...

"No timeframe"

Without a timeframe the number is meaningless. The liabilities won't be due at one time so the up-front number is irrelevant.

The way the number COULD have meaning is to state the timeframe the liabilities will come due. Previously when this type of report has been generated the time-frame was 75 years. $50T/75yr = $670B/yr. Hardly a figure that will overwhelm a $13T economy.

"Government is corrupt."

The American government is exactly what the channel-surfing, bible-spanking, fat, lazy, stupidity-admiring (Bush, Paris Hilton) morons in America have asked for. They don't participate, they don't care, and then they get the government they deserve.

Anonymous said...

"Anonymous said...
pkk here-

When GM closes it's doors, it will
turn out to be the last straw; our
economic/social network will implode:
no unemployment, welfare, food stamps. People will be penniless.
Doors of unemployment will be shut
against workers. Other factors will
of course have played their part.

September 24, 2007 7:45 PM"

But we will still have our great Toyotas, Hondas and Nissans, Acura's, Scions, Hyundias, Kias,,,,, Who needs jobs when you've got cars that cost $30 less per year to operate than an American car.

Edgar said...

anonypuss sed:

Fu*k the UAW

Fu*k unions

Fu*k all you socialist assholes.

I hope GM keels over and dies and all those greedy asshat unionized lazy pieces of filth die off with it.


Yep.

Anonymous said...

They can raise taxes all they want...I'm not going to turn another dime for them to tax.

My retirement will involve assault weapons, financiers, and euthanasia by cop.

Anonymous said...

F...FOX NEWS

Anonymous said...

Oh dear me the world is ending....YET AGAIN.

Holy shit man wsn't doomsday like 3 weeks ago. What happened? Oh I know, doomsday is every week according to you.

Economy's booming and you ignorant tools are talking about depressions.

OK have fun with you little games.

Anonymous said...

What about cutting government spending programs to sure up SS.

Anonymous said...

Funny you mention FOX news with respect to this issue. When past attempts were made by conservative legislators, mostly Republicans but also a few Democrats, all the alphabet stations so commonly called the MSM hooted and screeched that there was no problem. Likewise when any president has suggested that there is a problem with social security. Remember Al Gore and the Lock Box Issue? There is no lock box and the conservatives have been up about it for at least 20 years. Lose the vitriol for once and exercise a little intellectual honesty. The problems with off book expenditures is certainly a problem, but the hated FOX network is hardly to blame. True colors always come through.

Lost Cause said...

Shut down production of the crapmobile line that nobody wants to buy anymore...they did GM a favor.

Anonymous said...

Well, Keith, you're being told you're full of crap fairly clearly here.

Got the courage to admit it's true?

PS: the US spent about $650B on the military and the so-called "GWOT" last year. Seems that your $50T liability could be covered pretty easily if this country had its priorities straight.

Anonymous said...

The GM blue collar workers would have lost their jobs anyway within 5 years. GM makes pretty much all of the parts you don't see on the car in China; stuff like electrical motors and sensors.

It was only a matter of time until assembly went there as well.

If the UAW manages to have all of the GM executives become unemployed and ruined I support them 110%.

yoski said...

"RE: $51 trillion nonesense

That's like me saying over the next 25 years I will need $5 million to cover my living expenses but I only have $50K in the bank, therefore I have a $4.95 M deficit."

Nope, wrong. According to corporate accouting standards the government owes around 47 trillion in benefits. Money it collected in form of social security tax and spend frivolously.
An analogy would be a rental house where you collect $1000/month. With that money you have to pay for taxes, insurance, the gardner, the leaky roof, the broken HVAC and the stopped up sewer line. Instead of saving a good part of that money you spend it on booze and hookers. Now taxes & insurance are due, the roof is leaking the gardner hasn't been paid and you're broke.
Getting back to the retirement fund, to date (like in 9-24-2007, not some date 50 years from now) the US government has collected funds that should pay for something like $47 trillion in benefits. Unfortunately the account balance is $0.
How will they pay for benefits?
1. Raise taxes
2. lower benefits
3. Print money to pay for the benefits

Anonymous said...

vThe Governor of New York is now rewarding Illegal Aleins for breaking our Laws- after he prosecuted U.S. Citizens for breaking our laws as a prosecutor...

He is no less aiding and abetting Illegal Immigration. In my opinion he should be the next person to be prosecuted. I would also agree with other Americans who believe he should be arrested and put in jail.

His blatant disgregard for U.S. Citizens, who recently sent a firm message to the Sentate on June 28, 2007 and defeated the senate Immigration Bill, is overwhelming. He must think that he is living in a Country of his own...

It almost appears that Terrorists will now be able to simply check a box that says that they are not able to qualify for a social security card and can drive straight to the new World Trade Center and plan the next attack... what an open invitation... what an insult to the Families of our fellow deceased Americas from 911...

Please take time out to call the Governors office at (518) 474-8390 or call the Governors mansion @ (518) 473-7521 . Let him konw how he is rewarding those that have broken our laws after he prosecuted U.S. Citizens. This is the "real" crime.

borkafatty said...

I agree Unions were good in the early century when health care was poor and sweat shops were the norm, such as the mill jobs.

But now unions are a waste for a company, and I do not blame GM one bit....

Either the people/union come to some sort of agreement..or GM has no other choice than to say
" See Ya " and takes the jobs with it...

Wake the Fu@k up people..Jobs are getting scarce...Those Realtor's/Appraisers/Construction Workers, and so on still have to eat also....

Be thank full you still have a job and get back to work..Unemployment is not a good place to be in 2007.

Especially going into the most volatile month of the year...OCTOBER.

The Government is broke and they will not I repeat will not Bail GM out..They have way to many Sucklings on the TiT than to worry about a Car Maker and their ungrateful, hear us roar, poor us Union worker.

Get your lazy asses back to work, unless of course living in your Automobile is on your option list for yourself and your family.

redshoes said...

I heard the last time GM workers went on strike was in 1976.

What the sucky cars the make, I would not have went on strike.

Good luck strikers on getting money from this turnip...

unomyname said...

As I recall, Paul O'Neill (ex Sec. Treasury) commissioned a study of future obligations of the U.S. Gov't. OVER expected revenue. The writers (Gokhale & Smetters) came up with a really big number, like 45 trillion, which I believe was an aggregate number looking out 75 years. In the few years since I've seen numbers up to 60 trillion using that same methodology, indicating that things are going parabolic. It was widely reported at the time (2203 time frame)that the current admin. tried to squelch the report and that ultimately O'Neill was relieved of his duties because of it.
I'm not an accountant so I can't comment on the methods but it does comport with my sense of things - that the U.S. is well and truly bankrupt.

Anonymous said...

The LAST thing I want is for government to run health care.

Or retirement benefits of any kind.

Government IS the problem. And we're beyond screwed.

September 24, 2007 7:38 PM

Keith, just how much do you love the British while hating the United States?

You are going to great lengths to expose the collapse of the real estate bubble and all that goes with that but you fail to mention any remedy (which is available) which might rescue the situation.
Only government can effectively deal with this crisis.

As just as a side Great Britain does not even have a written constitution, it is based more on the old Venetian doge system.
Why do you think Americans are called "citizens" while the Brits are "subjects"? This is not simply semantics but goes to the fundamental difference between the British Free Trade system versus the American System of Political Economy.

Anonymous said...

Anonymous said...
Fu*k the UAW

Fu*k unions

Fu*k all you socialist assholes.

I hope GM keels over and dies and all those greedy asshat unionized lazy pieces of filth die off with it.

September 24, 2007 7:30 PM

The hedge funds looted GM you idiot! Auto production is the heart of our machine tool capability. You lose your machine tool industry and you lose your economy.

Let's keep those productive hedge fund managers and lets do away with those terrible unions. We'll allow the hedge funds to set our wage for us.

Everytime I read or hear some moron blaming the labor unions for the troubles at GM and Ford I just want to puke.

Just how stupid are Americans?

But it aint the unions wrecking GM it's those nasty hedge funds.

Shakster said...

Anonymous said...
"Government IS the problem."

No, VOTERS are the problem. Dumb-ass Americans vote for dumb-ass politicians who don't believe in government, or government being run properly, and then dumb-ass Americans are surprised when the trains don't run.

Duh.
----------------------------------
Good Post-I want to add...SEE ,Told yall. Voters keep expecting a different result by doing the exact same thing over,and over.Ron Paul ,although he speaks like someone I'd like in a leadership position,is still not the solution.The US factually,and legally considers him an Enemy,and a combatant.Look up the United States Statutes at Large.You want leadership?Think about this.If America enters a severe recession,or depression,and families are torn apart,hungry,and desperate.If we have to take to meanial jobs,and do our own dirty work yet manage to keep going would that be horrible?If you were an Iraqi right about now with no sewage,clean water,no health care,and some foriegn country ripping your family to bloody shreds,would that be horrible?Who the hell will save your asses?Not the Government,Not GM,ford,or Chrysler,so Who?You wanna real vote? Go into Collusion with your neighbors,and conspire to change this shit for the better on your own terms.Voter-The new Pollock.

Westparker said...

Keith,
Don't forget all the individual state's unfunded liabilities. CalPERS is so dramatically underfunded that they won't even disclose the amount. Given the numbers of illegals the state is buying free health care and education for, combined with our great governors socialized medicine plan. I don't see how the state won't be bankrupt in under 20 years.

Anonymous said...

You can't just divide the 170 by 30 years. Much of the money is already borrowed and is incurring interest charges.

That would be like diving a 360K house by 360 months and deciding that the payment should be 1k per month.

Every dollar we spend is already owed, so interest is accruing.

Daphne64 said...

Is there a developed nation that doesn't have this (unfunded pension and health benefits) problem?

You make it sound like Americans are uniquely stupid, but the powers that be in every western country fell for this socialization process, and all western governments will die as a result.

I just hope we can save a good chunk of western civilization.

Since you live in England, Keith, you really should be aware of how the situations are developing in different countries, and trying to get a handle on what stupidities are inevitable and which can be avoided.

H L Mencken said...

I believe that all government is evil, and that trying to improve it is largely a waste of time.

The state remains, as it was in the beginning, the common enemy of all well-disposed, industrious and decent men.

The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office.

Anonymous said...

I know of a guy in the food industry that got his pension cut(after he retired ) .I know of a guy in the travel business that got his pension and benefits cut .

For instance ,in the food industry ,I know that the new employees do not get the benefits that the old employees get and it takes longer to be vested in benefits .

So, under what circumstances can a Company burn their employees on benefits they paid into for years .Wasn't the corporations suppose to put pension money aside in a safe interest bearing account or a insured account .But lets say a Company goes BK ,wouldn't the benefits just be pro-rated up to the time of BK?

Some Companies give stock options as a Company benefit ,so if the stock goes down ,I guess that employee would just lose,yet Countrywide Fundings employees are suing for the value of their employee stock benefits going down ,(maybe they have a case ,I don't know).

So ,lets say a Company misjudged the cost of medical benefits they promised employees ,(because of inflation I guess ),yet they got the service from the employees based on that promise of benefits,than aren't they obligated to pay ?

This is a example on how inflation in medical costs can mess up a benefits program for workers that was promised .

But, if companies are going to cut benefits ,that were paid into or promised ,than why would a worker accept benefits anymore .It would be better for companies to just give bigger incomes and let people provide for their own future if the companies are not going to honor these benefits . What can people count on anymore?

Anonymous said...

I'm one of those people who bought only "american made" (translated one of the big three makers) for forty years. The last one was a top of the line cadillac. Never again! Our last car was japanese and we will buy japanese from here on out. I won't blame the executives or the rank and file workers but I also won't help pay their compensation any longer.
As for the health care issue, our last child cost >$40k in medical for a pretty routine pregnancy. We personally know of two foreign couples who paid nothing at the county hospital because they are "low income" people.

Happy European said...

So government is the evil and private corporations are good? Then how come that GM is in such a big mess? Was it government that told them that building reliable and fuel-efficient cars was unnecessary and they should concentrate on gas guzzlers?

The truth is, some things should be run by gouvernment (i.e. where ever competition to reign in corporate greed can not be organized), others by private corporations.
Just imagine the justice and police system were run by private corporations. It has happened in history before, in 18th century South Italy. The corporation existes to date and is known as the Mafia. Life is too complex for being represented in just white and black.

Anonymous said...

"not understanding that they make crap cars for a crap company who has no future,"

Wow, that sounds like an uneducated statement from Ahmadinejad.

All you people who think America builds crap cars are truly ignorant or blinded by your shear hate of good American jobs with good pay and benefits.

Google "Toyota Recall" or "Toyota Problems". Research reliability reports.

When your job and benefits come under the chopping block I hope you are supported by your fellow American and not abandoned like the UAW workers have been.

Corporate America must love you tools. They have you hating products built by us in our own country and hating the idea of good benefits and wages, they must be laughing hystericaly at you sheep.

Anonymous said...

Interestingly, the problems of GM reflect the free market system at it's best. All systems - GM, Ford, even the US government are subject to entropy. If they don;t react properly they will die - as they should so more useful and efficient systems take their place. I hope GM doesn't die - it has provided many well paying jobs in peace time and a big contractor during times of war. The new Volt concept car is a great idea as well. And for those boasting about Japanese products, Buick ranks above most of the imports in quality while GM's biggest business is selling technology to the world's automakers. Unions are dying out rather quickly - and GM will start satellite industries without union labor.

vegas crash watcher said...

I'm not going to pay. All you socialists can tax each other.
Leave me alone.

Anonymous said...

GM builds great vehicles, anyone saying otherwise is just missinformed, period!

I have a 2004 Buick Rendezvous with over 93,000 miles on it. It has NEVER, ever been in the shop. Not one break down, not one repair, not even a tune-up and it looks, feels and runs as it did when new.

The Rendezvous gets 22mpg observed, and seats seven.

Just how reliable does a vehicle have to be for you America haters to relent.

SteveM

Andrew Hac said...

Quote:
###
Thank you Democrats. Thank you Republicans. Thank you ignorant voters. You fuc*ed America. And you immorally and selfishly screwed generations of Americans to come.
###

I like the part about "Ignorant Voters". Yes, that is correct in America. This country is now made up of 75% ignorant, uneducated, pompous-ass white-trash-trailer who think they can invade any nation in the world if they want to. How about this, Americano ? Want to make a bet ? Why don't you try to invade China then ? Think you can win the war (by military force or by nuclear bomb, take your pick...) ?

Americano !!! What a nation, what a people...

P.S: GM can die and I will place a flower on the grave. And all those FAT-ASS White-Trash Beer-Belly Assembly-Worker at GM can die of starvation, having their white-trash trailer repossessed for all I freaking care. I don't buy American car. My 1999's Toyota Corolla cost $16,000 drive-out price and has a 178,000 miles on it and drive like a freaking 20-year-old strip dancer... How about that, you Americano lover ? Can you match your car against mine ?

Osman said...

The unfunded, off balance sheet liabilities faced by our country over the next 10 to 30 years are simply unprecedented. Run-away inflation and much higher taxes are one way the government can dig its way out of the hole. It also doesn't hurt to boost the tax base via legal and illegal immigration.

Here's the rub. Owning a home with a fixed rate mortgage is a protective hedge in an inflationary environment. If you can hold onto your job, your income should rise along with inflation. In absolutely devastated former bubble markets, and markets less impacted, long term buyers should now be starting to look for value.