The U.S. economy added just 88,000 jobs in March, proving once again that any talk about recovery is misplaced.
Food stamp recipients, on the other hand, rose 1.8% year-over-year amid early released news of President Obama’s new budget that curbs Social Security benefits.
Social Security is an entitlement to people who have paid into it for more than 40 years of working service. Remember, individual employees contribute 7.65% to Social Security and Medicare – and their employer matches the same amount. In other words, Social Security and Medicare taxes amount to 15.3% of every individual’s earnings.* Call me crazy, but I do believe that these people are entitled to a reliable benefit at retirement that fulfills the promise of the social benefit plan that they invested in.
Yet they are the first ones on everybody’s hit list – Republicans and the President – to incur benefit reductions.
But why isn’t food stamps – which are not an entitlement – at the top of the list?
There are currently fifty million people in the U.S. population on food stamps – some 15% of all people. This is embarrassingly way too high almost five years after the market meltdown; not to mention that there are many people receiving food stamp benefits in America that are not American.
America has a welfare problem first and foremost, a government corruption problem in the second – and yes, an outdated social entitlement system that needs a drastic overhaul in the third. Why not attack them in that order? By overlooking the first two to focus on the third is further proof that current American governance has no clue how to fix the Market. As such, Real recovery cannot begin.
This unfortunate state – a lackluster market economy, a poor jobs market and escalating welfare programs, and incompetent fiscal management – force the hands of an all too willing Federal Reserve to think twice about stopping its printing presses and irresponsible monetary programs, like quantitative easing (QE).
If trillion dollar fiscal deficits, and trillion dollar currency print runs, all of which amounted to $7 trillion of new debt, couldn’t bring unemployment down to 5% by now – then continuing to do so is more insane than hopeful, and more corrupt than helpful.
Let’s acknowledge one thing: “free stuff” means much less than that which is hard earned. Free stuff can make a populous stupid, not to mention dependent on government assistance. QE, for example, is food stamps for white collar investment bankers.
Take Goldman Sachs, a recipient of government bailout funds and QE proceeds – a.k.a. free money. This week they announced the creation of a new unit dedicated to “high risk debt” for companies with “no credit ratings.” (Remember, they’re too big to fail, and therefore, dependent on government assistance and taxpayer funded bailouts to cover their failures.) But here’s the best part – Goldman said that the people who will be managing their new junk bond business “have no prior experience managing” such an operation. Does that sound smart?
Hey, when money is free and easy – losing it is no big deal. And since losing free money is easy, it requires no experience.
In spite of the Market’s dysfunction, the Dow Jones Industrial Average is up 11% this year. That’s because new money handed to investment banks creates inflation in easy to manipulate market indicators like the Dow Jones Industrial Average and S&P 500. The 15-51 Indicator is telling the true story, and continues to lead “the market” by several months. See below.
Food stamps, like QE, are artificially inflating a very weak market.
Stay tuned…