Monty Pelerin's World

Economic, Financial and Political Analysis

Archives for A Year Earlier

A Year Ago — The Ruling Class

Angelo Codevilla wrote of the political elite and contrasted this ruling class with the rest of us.

Apparently, it is their job to rule and get fat while we work, feed them and cater to their whims. If they merely drained resources from the productive center, that would be harmful enough. But it is worse than that. Most of their work makes things even worse for the productive class. We pay them to do things that are harmful!

We would get a better return if we sent them the money and barred them from ever entering Washington or meeting anywhere else.

These facts were published a year ago and illustrate how members of Congress and government differ from we mere mortals.

#1 According to an article in the Hill, House Speaker Nancy Pelosi’s net worth soared from $13.7 million in 2008 to $21.7 million in 2009.

#2 In 2005, 7420 federal workers were making $150,000 or more per year.  In 2010, a whopping 82,034 federal workers are making $150,000 or more per year.  That is more than a tenfold increase in just five years.

#3 More than half of the members of the U.S. Congress are millionaires.

#4 The total compensation that the U.S. government workforce is going to take in this year is approximately 447 billion dollars.

#5 Today, all members of Congress earn at least $175,000.  This is far, far more than the average American makes.

#6 60 percent of the federal government workforce is represented by labor unions.

#7 The median wealth of a U.S. Senator in 2009 was 2.38 million dollars.

#8 In 2005, the U.S. Department of Defense had just nine civilians earning $170,000 or more.  When Barack Obama took office, the U.S. Department of Defense had 214 civilians earning $170,000 or more.  In June 2010, the U.S. Department of Defense had 994 civilians earning $170,000 or more.

#9 Insider trading is perfectly legal for members of the U.S. Congress – and they refuse to pass a law that would change that.

#10 According to a recent study conducted by the Heritage Foundation, federal workers earn 30 to 40 percent more money on average than their counterparts in the private sector.

#11 When you factor in such things as retirement and health care benefits, the compensation gap between federal workers and private sector employees gets even larger.  Just consider the following quote from the Heritage Foundation study mentioned above….

“Including non-cash benefits adds to this disparity. The average private-sector employer pays $9,882 per employee in annual benefits, while the federal government pays an average of $32,115 per employee.”

#12 The personal wealth of members of the U.S. Congress collectively increased by more than 16 percent from 2008 to 2009.

A Year Ago — “Why Obamanomics Will Not Improve the Economy”

Approximately a year ago, this article appeared on this site and also on American Thinker.

The article is as relevant today as it was then. While specifically criticizing Obamanomics, it provides a general criticism of economics, specifically macroeconomics.

The recent compromise, extending the Bush tax cuts and adding new ones as well as new spending, does nothing to dispel what was said in the original article. The changes reflect new political realities rather than economics.

A Year Ago — The Empty Suit Appears

The fraud that is Obama was spotted early on by his detractors. Yet even non Kool-Aid drinking Democrats were quick to spot problems.

This post appeared on December 1, 2009. It reflected concerns by Democrats.

A Year Ago — Investment Facts

In an important post for investors, a year ago, it was shown that

… your $200,000 ten years ago has been halved in terms of purchasing power. However, in terms of planning purposes, your anticipated retirement amount has been reduced by 75%. Given these outcomes, who will be able to retire? And for those already retired, how many will “unretire?”

All investors should read this post because it has important concepts regarding returns, inflation-adjusted returns and planning for retirement implications.

Year Ago – Porter Stansberry on Bankruptcy of the US

This post appeared a year ago in November 2009. It is worth reading or re-reading. The numbers which caused Stansberry to fear bankruptcy within 12 months have only gotten worse.

Perhaps it is QE2 that is temporarily protecting the government from missing payment obligations. I suspect that we will know before QE2 runs out the dire condition of the US government.

This article concludes, as did my recent post Spiraling to Bankruptcy. that the bankruptcy of the United States is now inevitable. Porter Stansberry approaches the topic from a different angle, using cash flows and borrowing capacity, to support his conclusion.

Stansberry  has a great sense of urgency believing ”the odds are very high you’ll be wiped out over the next 12 months.” Whether he is correct in this prediction, only time will tell. Timing is impossible to predict with any degree of reasonableness. Bankruptcy could happen this week or not for many years.

The bankruptcy of the United States is now certain

Tuesday, November 24, 2009
From Porter Stansberry in the S&A Digest:

It’s one of those numbers that’s so unbelievable you have to actually think about it for a while… Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that’s not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury

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