He must have been feeling some pressure from the Bush administration, due to his attacks on their out-of-control deficits. I am sure Walker was frustrated by the lack of serious discussion or - Heaven forbid! - any action by Congress in the direction of dealing with this massive impending shortfall in entitlement funding. In case you haven't heard, Social Security is run like a Ponzi scheme, which depends on a lot of new "investors" to pay into the scheme, so that it can continue paying for the ever-escalating medical and retirement income costs of the retired population.
The annual Social Security surplus produced by the huge Baby Boomer contingent of workers is about to come to an end and those folks will be retiring in droves over the next few year. All those surplusses have been lumped into the federal budget and spent. They are not invested in anything, to grow into the trillions of dollars needed to pay the Boomers what was promised them, as any normal insurance business would do. They are gone.
Now, you may be saying, "That's no problem. I wasn't counting on that tiny check anyway. I've got plenty of money and investments to provide for my retirement!"
Ahhh, but let me tell you "the rest of the story." Another of my key sources is economist Laurence Kotlikoff, who served on Reagan's Council of Economic Advisors and wrote The Coming Generational Storm in 2005 to explain the danger here. To summarize his argument: The only politiclly acceptable, workable way to find the funds needed to pay for a $60-70 Trillion shortfall in Social Security/Medicare, is to inflate their way out of it. This is how you and everyone else will suffer for Congress' and the White House's incompetence over the past twenty plus years.
I chose the title "The Ulimate Sell Signal" in reference to an article in the Daily Reckoning that appeared February 26, 2008. It quoted money market specialist Bill Donoghue, who noted that David Walker had recently resigned his post at the GAO, calling it "the ultimate sell signal" for America's prospects. The Daily Reckoning is a good read, I reccomend it highly.
Walker is evidently so frustrated that this country and our leadership (who should know better) seem determined to run this country off a cliff rather than come to terms with fiscal realities. Tellingly, Walker has accepted a post at the head of a billion dollar new foundation created by entrepreneur Pete Peterson to continue to spread the message that this country is doomed if it continues to spend money it doesn't have.
Have you noticed?
- Foreign countries are losing confidence in the dollar.
- Home sales and prices are declining nationwide.
- Inflation is going up.
- Jobs are going overseas.
- Wall St. is highly nervous over massive speculation in sub-prime debt, SIVs, CDOs, etc.
- The Fed is caught between their mandate to fight inflation, while trying to keep the economy functioning with lower interest rates.
- Consumer spending, 70% of the GDP, is drying up. Uh-oh!
- Bankruptcies and foreclosures are going up at record rates.
- The country is mired in two overseas wars, at great expense, and looking for a reason to bomb Iran.
- Both Democrats and Republicans have been talking about adding Universal Medical Insurance to our financial burden soon.
- The inevitability of more terrorism here at home, possibly nuclear.
- The inevitability of shortages, price increases, and embargoes of oil and natural gas.
- Resource wars in a mistaken attempt to secure what's left for the USA.
- The Average American doesn't seem to care about all these growing storm clouds.
I assume, if you're reading this, that you have money you want to protect in the likely event of a collapse of our economy and/or runaway inflation. Even if you don't have much to lose, you still must want to make sure you continue to have a roof over your head, food on the table, and some source of income.
I don't know what - if anything - you plan to do about all this, but I will tell you what I'm planning. I would suggest you read Kotlikoff's book and also James Howard Kunstler's "The Long Emergency". I will put these in a link box on this page for your convenience. These are books worth owning.
As a protection against the chaos these authors and others project, I would consider either moving out of this country or - at the least - moving to a safe, small community where you can provide for your own family's need for foods with a good-sized organic garden plot. This is a great way to save money on groceries, improve the quality of your health, and even provide a generous retirement income for yourself. More on this later...
I'm not a financial advisor, but I will say what I plan to do to protect the value of my money from inflation OR deflation. My plan is real basic: Gold and silver as a store of value, and real property in safe locale, plus a stock of tools, seeds, and knowledge. And trustworthy friends with complementary skills.
So, the Ultimate Sell Signal has been given - will you heed it?