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Thread: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

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    Default Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

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    (snip)"To all who watched the recent student demonstrations in London (in which members of the royal family ended up being victims of righteous mob anger), and mused that things like this can never happen in the US, Simon "Sovereign Man" Black has some words of caution: prepare to grab your ankles. His advice is what some may consider borderline anarchistic: "Stop playing by everyone else’s rules. Refuse to be enslaved by the idea that it’s your civic and moral responsibility to pay off the debts of your government’s failures. Cast off the yoke of their control… and summon the courage to live a life by your own design." Yet judging by recent violent events in ever more European countries, who have decided on precisely this outcome, is this such a far fetched perspective of what reality may soon become?

    From the Sovereign Man:

    Young people: get ready to grab your ankles

    If you’re reading this and under 30, let me be absolutely clear about one indubitable point: your government is going to sacrifice your future in order to pay for its own mistakes from the past.

    To give you an example, students in London came out to the streets in droves last Friday to protest the British parliament’s most recent austerity measures which tripled the cap on their university tuition to $15,000.

    Sure, Britain is imposing all sorts of austerity measures on its citizens… and while I won’t get into a discussion about the absurdity of government controlled education, I will point out that students are having their benefits cut far more drastically than any other segment of the population.

    Are pensioners seeing their costs triple? No. Are middle-aged workers seeing 50% tax hikes? No. Aside from the very small segment of high-income earners who will be forever robbed and pillaged of their wealth, the younger generation is next in line to receive the butt end of the crisis fallout.

    Younger folks have comparatively lower incomes, benefits, job opportunities, and political clout than their seniors, yet they are increasingly expected to assume a disproportionately larger burden of the consequences of government folly.

    It’s the younger generation that is called on to go fight and die in pointless wars in faraway lands; it’s the younger generation that is forced to assume the debts of their forefathers; and it’s the younger generation that gets relegated to the back rows of the political amphitheater and dismissed by the establishment.

    Meanwhile, retirees aren’t seeing massive benefits cuts, and middle-aged wage earners income earners are being protected from above by politicians. In fact, let’s take a minute and look at the looming fate of the average young person today:

    1) Your government-run university tuition is going to go through the roof, saddling you with unfathomable debt before you even enter the world as an adult;

    2) Once you graduate, you’ll be the last in the hiring queue;

    3) If you do get hired, you’ll be the lowest on the totem pole and the first to be let go when tough times befall your business;

    4) Once the labor market eventually stabilizes, you’ll enter your prime earning years with some of the highest tax rates ever seen as your government continues to cannibalize your generation to pay off its largess and indebted entitlement programs that benefited older generations;

    5) For your entire working life, you’ll pay into a pension system that is going to be bankrupt by the time you’re qualified to draw on it;

    6) More than likely, you’ll never achieve the standard of living that your parents achieved;

    7) Whatever wealth your parents accumulated won’t be left to you– the bulk of it will be confiscated by the state (unless your folks were smart enough to plant multiple flags) due to a host of death taxes.

    If you’re in the millennial Facebook generation, this is going to be the standard storyline of your peers. The system that’s in place right now– the failed cycle of debt and consumption fed by continuous government intervention– has stuck you with the bill.

    Fortunately, there’s a silver lining (as always). Younger people are generally less anchored and more mobile than their elders, hence it’s much easier to opt out of this perverse system.

    If you’re angry that your government is saddling you with the responsibility to pay off generations of bad decisions, then get out of dodge. Stop playing by the same rules of the game that used to work in the past– the old playbook of “go to school, get a good job, work your way up the ladder” simply doesn’t apply anymore.

    Don’t stick around a society that has completely forsaken you and is waiting with knife and fork in hand to carve up your earnings once you finally enter the labor market… get out of dodge now, while it’s easy to do and you have little to risk.

    Go explore the world and get an education based on experience, not expensive academic theory. Seek opportunities in thriving, frontier markets overseas… places like Kurdistan, Mongolia, Botswana, Kazakhstan. Soak up the local intelligence and become the grease guy on the ground who can make things happen.

    Find people whose lifestyles you want to emulate and make yourself indispensable to them as an apprentice… this will be the only time in your life that you can afford to work for nothing in exchange for a valuable, first-hand education.

    Most of all, stop playing by everyone else’s rules. Refuse to be enslaved by the idea that it’s your civic and moral responsibility to pay off the debts of your government’s failures. Cast off the yoke of their control… and summon the courage to live a life by your own design.(snip)

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    Default Re: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

    what does it mean to "grab your ankles" though?

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    Default Re: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

    It means: Bend over and get ready to get fucked up the ass. Hard. With no lube.

    :-)

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    Default Re: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

    ^^^ as the author clearly pointed out ...

    (snip)"Younger folks have comparatively lower incomes, benefits, job opportunities, and political clout than their seniors, yet they are increasingly expected to assume a disproportionately larger burden of the consequences of government folly.

    It’s the younger generation that is called on to go fight and die in pointless wars in faraway lands; it’s the younger generation that is forced to assume the debts of their forefathers; and it’s the younger generation that gets relegated to the back rows of the political amphitheater and dismissed by the establishment."(snip)

    To put this in very blunt terms ...

    - US states are starting to look at 'desparate measures' to reduce their widening budget gaps. Reducing gov't subsidies for state college tuitions ( = increased out of pocket tuition costs for students ) is a favorite for state politicians because it only negatively affects a relatively small segment of the state's total of registered voters ( primarily 25% or so of the 18-25 age group that plan on attending college, and their parents ). Reducing retirement benefits would affect 100% of the 62 and older age group. Reducing social welfare benefits would affect some 16% of EVERY age group. Thus on the basis of politicians' 'self-preservation', young college students will cause the least amount of electoral backlash.

    - younger people typically have a high percentage of their total incomes derived from 'paycheck' earnings, but a low percentage of their total incomes derived from 'investments'. People with comparatively high percentage of 'investment' income tend to be older ... and also tend to be political contributors !!! Thus when forced to raise state tax rates, politicians will opt to increase state income taxes on 'paycheck' earnings rather than increase state capital gains taxes on 'investment' earnings. This directly results in younger people being charged a significantly higher de-facto tax rate than older, richer people on the same dollar amount of total income. Eventually, federal tax increases will follow along the same lines.

    - from a demographic standpoint, America is heading for a future situation where there will only be about 2 active workers for every retiree. Since Social Security must actually be funded out of future year general tax revenues ( SSI's cash flow arguably turned negative last year ), the ONLY real source of funds will be increased payroll taxes on active workers. The well organized lobby of retired people ( who failed to save very much private money for their own retirement ) will place heavy pressure on politicians to raise taxes on active workers rather than cut their Social Security benefits to 'starvation' levels.

    - while many people never stop to think about it, just as the Social Security bonds issued in the past now create an additional 'drain' on current and future year general tax revenues, all of the newly issued US Treasury Bonds sold to finance last year's stimulus package, this year's record federal budget deficit etc. and all of the newly issued Municipal Bonds sold to finance state and local budget deficits also represent an additional 'drain' on current and future year federal and state tax revenues. This must culminate in significant future tax increases ... but with a significant percentage of those increased tax revenues actually being paid out in the form of bond interest and principal repayments ( to the 'rich' domestic and foreign owners of those bonds ) as opposed to paying for retirement benefits, social welfare benefits, public works projects etc. For young workers, this translates into paying a higher future tax bill but getting absolutely nothing to show for it in return.

    - the author also generally alludes to the point that, between the return of the 'estate' tax, future gov't rule changes regarding means tested retirement and Medicare benefits, future gov't rule changes regarding 'loss recovery' etc. it is highly probable that many parental assets that have historically been passed on to their children will in the future be far smaller ( because the gov't will require the parents to spend their own money on retirement / health care expenses before they can access gov't money ) ... and that the smaller amount of 'estate' money will also be subject to new gov't 'strings' ( like the gov't / banks forcing children of recently deceased parents to pony up large amounts of cash to pay taxes / delinquent loans still owed by the parents ) before it can be passed on via inheritance. This will result in smaller inheritances, leaving many of today's younger workers more or less 'on their own' in regard to buying a house, funding their own retirements etc.

    ~
    Last edited by Melonie; 01-05-2011 at 02:20 AM.

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    Default Re: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

    follow up info ...

    (snip)"Gordon Brown will warn on Thursday that the world faces youth unemployment of "epidemic proportions", as he urges joint action by the G20 group of developed and developing nations to tackle rising joblessness.

    During a speech in London, the former prime minister will call for Barack Obama to take the lead in boosting education, training and job opportunities for the 81 million people under the age of 25 who are currently without work.

    "Unemployment is an international time bomb for both developed and developing worlds," Brown will say in the Ted Kennedy/John Harvard memorial lecture.

    With some labour market analysts predicting that under-25 joblessness in the UK will edge closer to the 1 million level in today's figures, the former prime minister will say: "The world faces global youth unemployment of epidemic proportions."

    Brown will add: "It becomes an even bigger problem if, as I suspect, the numbers of young people denied education – which had been falling until last year – start to rise and go above 70 million in the years to 2015."

    Brown will also say that the G20 will have to make action on youth unemployment a major issue when it meets in the summer.

    "The world needs to ensure that young people are not the biggest victims of the global crisis and to ensure that they are not much worse off than their parents," he will add.

    "The G20 can take a lead. I am pro-American and the leadership President Obama wants to give the world in fighting youth unemployment is of vital importance."(snip)


    The 'gold foil hat' crowd would tell you that Western leaders are finally starting to pay attention to recent news of riots out of Algeria, Tunisia, Bangladesh, India, China etc. - primarily involving young people whose jobs ( if they have a job ) are barely able to pay for food / basics - and who have no apparent hope that the current situation will get any better.

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    Default Re: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

    The CBO has reported that the Social Security Trust Fund went negative last year by $45 billion i.e. it paid out $45 more than it took in. This is ahead of schedule. The Fund will be totally insolvent by 2037. ASSUMING that Uncle Sam doesn't default on any of the money it "borrowed" from the Trust Fund. Let's all pray we don't see another inverted yield curve anytime soon. One thing preventing a debt crisis here a la Europe are low interest rates. But if we see a return to 2 % on the 2 year Note ? Who knows ?

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    Default Re: Simon Black's ( financial ) Advice To Young People: Grab Your Ankles

    ^^^ actually the report goes further than that, stating that the SSI trust fund is now expected to run a negative cash balance in EVERY future year. However, last year's $45 billion deficit managed to escape mainstream financial news coverage of its true impact.

    For starters, the SSI trust fund has no actual assets. In past years, excess tax receipts into the SSI trust fund were 'loaned' to the gov't's general fund and spent on everything from fightig wars to medicaid / food stamps to education. In exchange, the SSI received 'promises' ( in the form of special non-marketable US treasury bonds ) that in future years when SSI began to run deficits that SSI would have 'first claim' to the future income tax revenues of the general fund ( i.e. individual and corporate income tax revenues ). Last year, for the first time, SSI ran a deficit ... and as a result $45 billion in general tax revenues wound up being transferred to SSI to fund social security checks instead of being available for other gov't spending.

    The truth of the situation is that social security recipients must now directly compete with every other 'outstretched hand' seeking to grab a portion of general tax revenues. Or from the gov't's viewpoint, social security has now become like principal and interest payments on the national debt in that they both divert a growing percentage of general tax revenues toward 'non-productive' spending. And repayment of SSI Treasury bonds as well as other Treasury bonds held by ( foreign ) private lenders arguably takes priority over other gov't spending. Ultimately, general tax revenues are going to have to be increased significantly in future years if, after social security and other treasury bond repayments, gov't spending on other programs is going to be continued at anywhere near present levels. And that increased tax burden is going to fall heavily on the shoulders of younger Americans !

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