Former US Treasury Official - Expect Frightening Black Swan
October 25, 2013
Today a former US Treasury Official warned King World News that investors around the world need to be prepared for a frightening "black swan" that will shock the financial world. He also cautioned, "the whole (global financial) situation is headed to hell in a hand basket." Below is what Dr. Paul Craig Roberts had to say in part I of his powerful interview series.
Dr. Roberts: "A lot of people think of 'entitlements' as welfare, but (these) 'entitlements,' strictly speaking, are welfare and medicare, and both are funded by the payroll tax. They are not unfunded, and they are not welfare. The current payroll tax is 15% of welfare and that goes to fund these programs. These programs are not the problem. For the last 30 years, the federal government has been collecting far more social security revenues than they have paid out in social security benefits — the difference is about $2 trillion.
So, what happened to this $2 trillion? Is it safely in the bank for social security? No. The Treasury took it and spent it, and stuck in its place non-marketable I.O.U's. So, what's in the Social Security Trust Fund is $2 trillion of non-marketable Treasury I.O.U.'s... .
"The only way they can be made good would be either for the tax revenues to go up by $2 trillion, which is not conceivable, or the Treasury has to sell $2 trillion more bonds and use the proceeds to put the money into the Social Security Trust Fund.
Now, supposedly, when they concocted this scheme the money would be accumulated to cover far-distant years, when it was projected that the payroll tax, at the current rate, would not suffice to pay all of the social security benefits. The real purpose of the scheme, which was cooked up by Alan Greenspan and David Stockman, was to reduce the current budget deficit in order to reassure Wall Street about their bond and stock portfolios.
EVERYONE ACTS LIKE WE HAVE ALL OF THESE "FREELOADERS"LIVING OFF OF THE PUBLIC. WELL, IN FACT, MANY ASPECTS (OF THE UNITED STATES GOVERNMENT), INCLUDING THE FEDERAL GOVERNMENT'S WARS, HAVE BEEN LIVING OFF OF THESE SURPLUS SOCIAL SECURITY REVENUES.
more at link to kingworldnews.com