We have gotten some cold letters from hot readers. They fall into two camps: those who agree with us… and those who would rather see us imprisoned for hate crimes.
At issue is the “zombie” status of Social Security recipients.
Writes dear reader Kirk H. in response to the current Bonner & Partners campaign promoting a new book on how to maximize your Social Security checks, Get What’s Yours.
Can you stop pushing the Social Security book now?
It seems like you have been only writing about it for a couple weeks now. I am sure there is a portion of your readers, like me, who are not even close to being able to collect Social Security benefits.
I am 50 and expect the whole system to implode before I even reach 62. Also, I agree with Bill that those who take Social Security are zombies, living off other people’s taxes.
Yes, I know they all paid in, as have I, but they all know it is a Ponzi scheme.
While they were still working, I am confident that most of them wished to do away with it. Now, they likely vote for politicians who protect their sacred Social Security benefits.
That is hypocritical!
I really enjoy the information that you folks provide, but I am seriously tired of this Social Security book push.
Here is an opposite view. From reader David F.:
I will argue until the day I die that social “protection” programs like food stamps, Medicaid and welfare protections are indeed “entitlements.”
But the Social Security retirement promise is something I paid for out of every paycheck I’ve earned throughout my entire life.
It really is offensive for someone like me, and others who have never accepted “entitlement” help of any kind their entire lives, to be grouped with the many other “entitlement” spending recipients…
I rarely disagree with Mr. Bonner, but a “Zombie” I’m not, and neither are all those other baby boomers who faithfully paid Social Security every payday for decades and who believed that those in our government would honor that contract with us.
We agree with both readers, more or less. In the following few paragraphs, we will try to put the whole issue in judicial perspective…
First, we go to our old, tattered wallet and pull out our original government issue Social Security card. Yellowed and frayed, it is remarkable we still have it.
Even more remarkable: There is no issue date!
But we can tell from the address that it must have been given to us a long time ago.
The address on the card no longer exists! It is a “rural route” address that the US Postal Service wiped from the map in the 1960s.
Also, there is no ZIP Code; they didn’t exist back then.
Our first official paying job was working as an usher in a movie theater in Annapolis, Maryland. We were 14 years old. So it must have been 1962 or 1963.
As we recall, we earned 68 cents an hour.
Hardly. But it was a start. It was also the start of our enslavement to the Social Security system. We’ve been in chains and fetters ever since.
Now, if we choose to take some of the money back, will that make us a “zombie”?
That is the question on the table.
How can you tell if you’re a zombie?
Do you drool? Do you shuffle? Do you have a crazed look on your face and suffer from substantial brain-cell damage?
Most likely, you are not a zombie. You are just getting older.
The real zombie test is this: In the absence of government would people still willingly give you money to do what you do?
If the answer is no, then you are probably a zombie.
You can see how this applies to tax lawyers, lobbyists and defense contractors.
Without the tax system – and the money that the feds take from us all – they’d be out of business. They are all zombies. (Though many are also honest, upright and helpful citizens.)
How about the big banks… Freddie and Fannie… Goldman and AIG?
Are they zombies too?
They most likely would have gone under – where they belong – during the crisis of 2008.
Congress saved them using taxpayers’ money. Then the Fed rewarded them with low-cost credit. Anything below the real cost of credit – as discovered in a free market – is zombie funding.
It’s an easier question when applied to, say, food stamp recipients. They are getting a zombie handout, paid for by someone who had no choice in the matter.
But what about Social Security recipients?
As a group, surely Social Security recipients are a zombie crowd, because they paid in less than they will get out.
Someone is forced by the feds to make up the difference. But any individual recipient may or may not be a zombie, at least according to our test.
He may have put in enough money to provide for his own retirement needs.
In fact, he may have even put in more than his own fair share.
Our dear 93-year-old mother, for example, is a zombie. But not through any fault of her own.
She just had the good luck to live a long time. That was part of the deal. Like an insurance program: Some win. Some lose.
And there’s another wrinkle, mentioned by our correspondent above. The typical Social Security recipient is a victim as well as a zombie.
He is forced to pony up money into the system whether he wants to or not. Then he has almost no choice: The feds have taken his retirement money; he has to ask for it back.
So, here’s another question: You are walking down the street. A robber puts a gun in your ribs and demands your money. He takes $100. Then, a generous sort, he gives you back $80.
Are you a zombie?
Of course not…
Suppose, after giving you back $80, he beats a retreat and in his haste drops a $50 bill. You pick it up and head for the liquor store.
Are you a zombie?
Not in any meaningful sense.
Zombie-ism – like a herpes infection – can be contracted in a number of ways. Some sordid and repulsive. Others innocent and faultless.
Either way, it is a curse.
Would You Say No to a 30% Yield?
|by Chris Hunter, Editor-in-Chief, Bonner & Partners|
“When all experts and forecasts agree – something else is going to happen.”
That was the sage advice from former Merrill Lynch chief stock market analyst and Wall Street legend Bob Farrell.
And right now, almost all the experts and forecasts agree that Greece will default.
For example, holders of Greek 30-year bonds are selling them at a 60% discount to face value. (The concern is these bonds could be worthless if Greece defaults.)
And investors are even turning up their noses at Greek 2-year notes yielding 30%.
One of the most interesting charts in finance today shows the ratio of Greek to German 10-year bond yields. The higher the ratio, the higher Greek yields are relative to German yields.
True, the investor picking up a 12.5% yield on a supposedly “risky” Greek 10-year bond risks getting wiped out if Greece defaults.
But at least he has a chance of making money on his investment.
The investor buying supposedly “safe” 10-year German Bunds is almost guaranteed to make a loss.
That’s because the sum of the annual income he’ll receive, plus the principal repayment, will be less than the price he paid to buy the bond in the first place.
If you’re looking for a bubble in today’s markets… look no further than the bubble in supposedly “safe haven” bonds.