Turning off the entitlement-meltdown warning light
posted at 8:44 am on January 7, 2009 by Ed Morrissey
Democrats in Congress, led by Harry Reid and Nancy Pelosi, plan on a spending spree that will push budget deficits to a trillion dollars while an entitlement-system crash awaits us in the next two decades. Until now, a House rule has forced the lower chamber each year to acknowledge the disaster awaiting the largest entitlement program by debating Medicare’s funding and direction. Now, according to CQ Today (subscription required), Pelosi and the Democrats have a solution to Medicare’s collapse — change the rule to skip the debate:
House Democrats are planning to deal with one of their annual headaches early this year, using a rules package to turn off the Medicare “trigger” that each year forces an at least perfunctory debate on the entitlement program’s costs.
Buried in the package of operating rules that will govern the House in the 111th Congress is a provision saying the Medicare trigger “shall not apply.”
In a release accompanying the rules package, House Majority Leader Steny H. Hoyer, D-Md., called the Medicare trigger “an ideologically-driven target based on a misleading measure of Medicare’s financial health.”
The trigger is part of the 2003 Medicare overhaul law that also created the prescription drug benefit. According to the law, if for two years in a row, 45 percent or more of Medicare’s funding comes from general tax revenues, the president has to submit — and Congress debate — legislation to slow excess spending over a seven-year period and restore fiscal stability to the program.
The trigger went into effect for the first time last year. President Bush submitted a proposal to cut spending which House Democrats promptly dismissed. They then killed the requirement for debate in 2008 with a rule similar to the one they plan to adopt Tuesday.
In an interesting twist, the rule change will still require Barack Obama to submit proposals to fix Medicare, as required by the statute. The House will simply ignore them. This anomaly will exist because Democrats won’t propose this as an amendment to the 2003 law, but only as a simple rule change, which they can use to govern only their own behavior. They cannot use a rule change to let Obama off the hook.
Steny Hoyer says that ending the trigger “will allow Congress to consider all options for improving Medicare financing to provide a balanced and equitable solution.” That’s exactly what the trigger prompts Congress to do. Killing the Medicare trigger allows Congress to ignore Medicare and the looming financial crisis coming our way. Hoyer, Pelosi, and the rest of the Democrats in the House don’t want to be reminded that while they spend money like there’s no tomorrow in the 111th Session, tomorrow will eventually come — and their upcoming spending spree will have made the situation exponentially worse.
Basically, this is the same as fixing the ENGINE TROUBLE light on your car by covering it with electrical tape and then launching a 3,000 mile road trip. What could go wrong?










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And no one has a towing truck big enough for this vehicle.
jgapinoy on January 7, 2009 at 8:47 AM
Is this the same as when I ignore those bills in the mail that are overdue? If I don’t *read* the statement, I don’t really *know* that I’m overdue, right?
Keep ignoring that big elephant in the room Congress. It’s not there.
Really.
cannonball on January 7, 2009 at 8:48 AM
which entitlement will crash first? i’m not counting on social security for myself personally, but there are many in my locality that literally live off their $300 checks. the dems will never let those people flounder.
kelley in virginia on January 7, 2009 at 8:50 AM
These people are so in love with themselves and so drunk with power, they won’t listen to anyone telling them that this will cripple the country for our children. The adrenaline and spotlight of a spending spree is too much for them to resist. It’s as though they think merely being elected gives them a blank check to do whatever they want.
It’s sad really. It reminds me of the British wanting to tax tea. It’ll eventually come to that because these people won’t listen to reason.
ThackerAgency on January 7, 2009 at 8:50 AM
Ever Congress has done this for the past 30 years. At least Nancy is being honest about being dishonest.
angryed on January 7, 2009 at 8:50 AM
See..”Hope-n-Change” will fix everything. “Yes we can” will become “No they can’t” very quickly. I hope the Republicans live up to their ideology of smaller government after the left screws things up beyond recognition. This is turning out to be sadly funny……..
adamsmith on January 7, 2009 at 8:53 AM
Only one congress has come close to 1 trillion dollars in one spending package. . . the last one with the bank bail out. I’m expecting a long depression by the time the congress gets done ‘helping’ us.
ThackerAgency on January 7, 2009 at 8:53 AM
Sneaky Democrats. I love how they quietly take away the power of the peoples representatives when they want to. Can our republic survive two years of this. Pelosi and Reid may be the first sitting congressional leaders to be thrown out by their own party together. The charge…gross incompetence.
kanda on January 7, 2009 at 8:54 AM
A counterrevolution is coming. It’s off in the distance now, but it’s coming. The days of unlimited government and unlimited spending will come crashing down. History will not be kind to the Pelosae and Reids.
EMD on January 7, 2009 at 8:54 AM
Oh, don’t worry. The Dems will just pass another bailout bill. Who cares that there won’t be any money left with which to bail anyone out?
Doughboy on January 7, 2009 at 8:56 AM
Well, we all know what Democrats’ response to the entitlement meltdown will be when it comes: EVEN MORE SPENDING. It’s a cliche to say this, but if I acted like the federal government is acting right now, I’d respond to getting laid off by maxing all my credit cards as fast as possible, buying two new cars, drawing the max home equity loan, and then robbing as many people as I could every single day to feed my kids Ramen soup.
aero on January 7, 2009 at 8:56 AM
Same Congress who couldn’t agree on a 2008 Defense Budget, so what did they do? Never passed one. Who needs a defense budget when your country is involved in two wars. These people are running our country into the ground.
scalleywag on January 7, 2009 at 8:56 AM
The last few days I have been wondering more and more if Reid and particularly Pelosi are making moves to put the House in the drivers seat politically. It almost looks as if they are trying to undermine even the power of the President by sinking any but their own ideas before they even get a chance to float and brooking no disagreement even from their own members. If I were Barack Obama, I would be very, very afraid of Nancy and company. She is narrow minded, ruthless and psychopathically controlling. Beware Barack!!
jeanie on January 7, 2009 at 8:59 AM
It depends on who writes it.
Akzed on January 7, 2009 at 9:00 AM
Too bad no one holds them accountable. If you or I were to perform our jobs in a gross incompetent manner we’d be unemployed. They just keep getting reelected.
scalleywag on January 7, 2009 at 9:00 AM
When the American people elect and re-elect abject morons to govern them, they have nobody to blame but themselves! These people did not inherit these offices! They were duly elected to them by the American people who are more interested in their local football or basketball team than national politics these days. This is the result!
sabbott on January 7, 2009 at 9:01 AM
Unfortunately, the Republicans have no ideology as it relates to fical conservatism and smaller government either. That’s why we are here.
Aggie85 on January 7, 2009 at 9:03 AM
I didn’t vote for either one of them I think it may have more to do with the people of their states…hmmm.. Nevada and California. Nope nothing liberal about those two states.
kanda on January 7, 2009 at 9:06 AM
I absolutely hate defending either Pelosi or Obama. But, have all of you forgotten the past 4 months. Bush has spent 2-3 trillion dollars on various bailout schemes. And that’s in a quarter, not a year.
Nancy and PEBO are just taking the batton from Bush/Paulson and running to the finish line.
angryed on January 7, 2009 at 9:07 AM
In the case of Nancy, her electorate is just as dangerous(for the most part)as she. Birds of a feather…..
jeanie on January 7, 2009 at 9:07 AM
And now they’re going to give a seat to Caroline Kennedy. I have all the confidence in the world that she’ll be able to use all her wisdom and experience towards helping our country manage it’s problems. After all, I’m sure she worries every day about people who have to live on social security and medicaid.
scalleywag on January 7, 2009 at 9:08 AM
Or fixing that pesky lifter tap and rod knock by…turning up the radio volume!
I’ll never understand why people don’t see the corrolary between the inept and spendthrift way medicare is run and the prospects of national health care…
What could go wrong, indeed!
RocketmanBob on January 7, 2009 at 9:09 AM
Maybe Hoyer doesn’t want the on-floor debate happening because it would reveal to the public his preferred option for dealing with the coming Medicare crisis: voluntarily transitioning everyone who’s over 65.
See, problem solved. (wipes hands)
/sarc
LastRick on January 7, 2009 at 9:09 AM
Finally….someone with wisdom who understands the plight of the republican party. I am a Conservative Republican. Notice Conservative comes first. Until our party gets back to our conservative roots and acts that way we will stay “here”.
kanda on January 7, 2009 at 9:10 AM
These moronic politicos will destroy us but we’ve nobody to blame but ourselves. They are single minded and live only to payoff their parasitic constituents, feed their narcissistic egos and pad their personal bank accounts. Steal yourselves because this once great Republic is about to tumble into the abyss.
rplat on January 7, 2009 at 9:12 AM
Worrying about paying for welfare programs is nothing more than ideological posturing.
Glad Reid cleared that up for me.
MarkTheGreat on January 7, 2009 at 9:13 AM
Hey give Caroline a break. For the first time in her life she is going to learn what it’s like to be employed. She has to bring home the bacon…err sorry …. the pork
kanda on January 7, 2009 at 9:13 AM
And, these same financial wizards that are bemoaning the economic mess that O! inherited, can’t seem to wrap their pea brains around what the long term effects of a multi-year trillion dollar deficit will be when superimposed on the ever-growing entitlement cost…
Do they think we can just go chapter 11 or something?
What happens when the Chinese forclose on Kal-ee-forn-ee-ya?
And, by the way, since the current financial crisis is primarily drin by CRA and the malfeasance at Fannie/Freddie, aided and abetted by the congressional Democrats, who really inherited who’s mess anyway?
I know their mantra is, “I blame Booooooooooosh!; but didn’t his administration and the congressional republicans try and rein in the mortgage GSEs a couple of times?
All inconvenient trooooooooofs!
RocketmanBob on January 7, 2009 at 9:15 AM
Now they ARE inheriting them. Look at Burris and Kennedy. And Biden’s son will likely take over his seat(although at least he’ll have to run for it).
I agree with your basic point though. The voters are to blame for this mess. Incumbents are being reelected to Congress at such an alarming rate that a lot of them(Barney Frank for example) run unopposed. And people are actually surprised that our country is in the toilet?
Doughboy on January 7, 2009 at 9:17 AM
No, Bush is not a source for this madness, he only enabled the likes of Pelosi and Obama. Furthermore, justifying or tempering the current Marxist fiasco by citing a prior one is nonsense.
rplat on January 7, 2009 at 9:18 AM
Reid and Pelosi have decided that since they have this DC naive and left leaning but somewhat idealist President, the times are ripe for the Legislature to take it’s “rightful” place and run the country without any interference from the President, the Courts OR the voters. I am wondering when/if Obama is going to catch on! A coup d’etat?
jeanie on January 7, 2009 at 9:18 AM
Dear liberals and other leftists,
You elected these destructive freaks . . . now live with them.
rplat on January 7, 2009 at 9:21 AM
Bush is not the source? Give me a break. Bush/Paulson were the ones telling us all that if we didn’t print $700B to give to Paulson’s Goldman Sachs and Co, we’d be doomed. It was total bullshit. That $700B was the biggest graft ever. And it was created by and for Bush and Paulson.
And that is small potatoes in the big scheme of things. How about the $150B “stimulus” from last year that Bush advocated? How about he $300B mortgage bailout that Bush advocated? How about the $80B Bush gave to AIG? How about the $30B Bush gave to bail out Bear Sterns? How about the $20B Bush (not congress) gave to GM? And of course add to that the hundreds of billions that have been printed by the Fed at the request of Bush and Paulson.
But I guess that was all Pelosi’s doing right?
angryed on January 7, 2009 at 9:24 AM
…Or like pinching your nose shut and chugging a quart of sour milk.
whitetop on January 7, 2009 at 9:24 AM
Well, Pelosi, Reid and most of the dems in control are pretty old.
http://www.youtube.com/watch?v=8Sp-VFBbjpE&feature=related
izoneguy on January 7, 2009 at 9:25 AM
Hey scalleywag. After many years in industry, I and C. Northcote Parkinson can assure you that incompetents don’t get fired; they get promoted. …by the same elitists that own the company and vote for Obama. Remember, incompetents surround themselves with incompetents so they don’t look so bad in comparison.
Old Country Boy on January 7, 2009 at 9:27 AM
You know what’s truly sad? Every liberal and Democrat I know right now (and many moderates, too) are just drunk with the joy and anticipation of how much better life will be now that the Democrats will be in charge. They seem to honestly think that just getting Bush out of office will solve everything. They’re so hopelessly, blissfully, dangerously naive it’s frightening. They have no clue whatsoever that an entitlement crisis is coming, and if they did they’d just figure Barack will fix it with a winning smile.
When Republicans took charge of the White House and both houses of Congress, I was pleased and hoped that we’d see some positive trends begin to happen. I understood that that’s the way it works — setting trends in motion, not getting instant political gratification. I did not expect miraculous overnight changes like these Democrat loons do. And when Republicans dropped the ball and made things worse, I was disappointed but not terribly surprised. The Democrat loons and naive voters who think Barack will fix everything instantly are going to crash hard when their incredibly unrealistic expectations are inevitably let down.
aero on January 7, 2009 at 9:29 AM
Those damn bastards. This is the epitome of, “I’ve got mine, I’ve got my health care, my pension, and lots of hidden cash. Too damn bad for you.”
My fondest dream is to one day see Nancy and Steny in orange jumpsuits after they get caught with their grubby, greedy hands in the cookie jar.
anniekc on January 7, 2009 at 9:34 AM
That’s right . . . Pelosi and her Marxist/Socialist friends and associates. Bush simply caved to their putrid philosophies. Truly bad behavior on his part but inconsistent with his fundamental belief in fiscal conservatism.
rplat on January 7, 2009 at 9:34 AM
Congress’ middle name: PORK.
Good point.
scalleywag on January 7, 2009 at 9:38 AM
That is truly sad. I find that to be true of the liberals I know as well. It’s frightening.
scalleywag on January 7, 2009 at 9:40 AM
I don’t believe that Bush has a fiscally conservative bone in his body. Well, okay, he did lower taxes. But that’s it, and it doesn’t count since a tax cut must be accompanied by spending cuts to be truly effective. Instead, he allowed exponential increases in spending on his watch, eroding what faith the public had in the efficacy of tax cuts. I think Pelosi and Reid and the rest of the pork brigade in Congress (both parties) are actually going to miss GWB when he’s gone. I don’t think Congress has ever had as green a light on spending as George W. Bush gave them.
Bush is socially conservative and a war hawk, but he’s missing the crucial third leg of the stool: fiscal conservatism. As a result, he has done tremendous, possibly irreversible damage to the conservative brand and the country’s economy.
aero on January 7, 2009 at 9:41 AM
This is not driving on the “check engine light” this is like driving when the needle is on HOT! We know where that leads.
Mr. Joe on January 7, 2009 at 9:41 AM
As I have said elsewhere, soon the only rich people in this country will be the ‘Professional Politician’ and their Hollywood syncophants.
Everyone else will become true peasants toiling in the fields of
Congressional DistrictBarony.SeniorD on January 7, 2009 at 9:49 AM
OT, but I wonder if Congress or Obama have even bothered to do a study on the impact the last stimulus checks had on the economy. Seems rather foolhardy to rush out another one without knowing if it will have positive results.
scalleywag on January 7, 2009 at 9:49 AM
The way it appears, at least we’re going down with a bang, not a whimper.
petefrt on January 7, 2009 at 9:50 AM
In my experience, understanding cause-and-effect has never been a strong suit of liberals. They don’t seem to have any interest in it.
aero on January 7, 2009 at 9:54 AM
OK. I admit-I did this when I was desperate & younger. But I had no $$ to fix it, so I drove on a wing & a prayer from Laramie to Seattle in my ’84 Ford 1/2 ton. But I don’t think you can do that with a newer car.
Ugh. Everything I drive now always has the engine light on. Nothing ever happens. Yet.
You have just described most of the public school system.
Priceless.
Badger40 on January 7, 2009 at 9:56 AM
Democrats go wild, America crashes and burns. But at least the illegals will be legal voters so they can stay in charge.
tarpon on January 7, 2009 at 9:56 AM
Bush and fiscal conservatism should never be uttered in the same breath. You sound like you have Reverse Bush Deranged Syndrome.
angryed on January 7, 2009 at 9:57 AM
So, basically, they are changing the rule to one where they stand there with hands over their ears, yelling ‘I can’t heeeear you!’
Vashta.Nerada on January 7, 2009 at 10:05 AM
I’m seriously considering quiting my job since “The One” and his cronies will ‘save’ me with all the entitlements that will be available. Hell why should ANY of us work anymore? The government will take care of us all! Viva la communism. (sigh)
lyfsatrip on January 7, 2009 at 10:05 AM
No. Only Congress can appropriate money. Bush can have all the hare-brained socialist daydreams he wants, but only Congress can write the check.
Our representatives in Congress have betrayed us.
LimeyGeek on January 7, 2009 at 10:11 AM
We already know the answer to that. The previous one didn’t work because it wasn’t big enough.
MarkTheGreat on January 7, 2009 at 10:34 AM
Logic is nothing more than one of the tools that the patriarchy uses to keep down the masses.
MarkTheGreat on January 7, 2009 at 10:34 AM
Rest assured that Pelosi, Kennedy, Kerry and the other wealthy solons in Congress will pay only a tiny fraction of this.
They all make their money in tax free municipal bonds. They pay much less than 1% of their wealth in taxes. Of course, they report earnings from their Senate Salary and speaking engagements and show a healthy tax % against that. The underlying truth is they all have fortunes of $50M and up and pay a few hundred thou a year in taxes.
The tax burden will fall on people who have to work to make a living.
The purpose of this obscene spending spree is to make sure that it will no longer be possible for working people to rise into the American aristocrary. There will be multi-trillion deficits for years which WE will have to pay, not them.
Basically, they are entrenching themselves as an immovable aristocracy, sealed off from the rest of the us, the so-called “middle class”. It will actually be the serf class, just like in old Europe.
That’s what it is really all about. They engineered the economic crisis to make this happen.
notagool on January 7, 2009 at 10:37 AM
The one prediction investment counselors have been accurate about:
Don’t depend on Social Security to be there when you retire…
right2bright on January 7, 2009 at 10:39 AM
That’s quite the conspiracy theory you’ve got there ;)
Whatever the ‘truth’ is, we’re fast approaching the point of no return – we either behave like free Americans and stand up and close our checkbooks, or we bow our heads in serfdom like castrated cowards.
We must refuse to pay for the corrupt, cynical idiocy of the cretins in DC. This is our country, not theirs. They exist at our pleasure, with our consent. We need to withdraw that consent.
LimeyGeek on January 7, 2009 at 10:41 AM
The President has the advantage of the bully pulpit and the veto pen. The House has the power of the purse.
It’s time that fiscal conservatives, whether Democrat or Republican, turn Nancy Pelosi’s mantra of “for the children” against her. Repeatedly point out how ignoring current entitlement obligations and promoting even more costly pie-in-the sky programs by mortgaging the debt’s costs to future generations that they will never be able to repay the loan is a form of child abuse.
Call out Pelosi’s fiscal poor leadership with specifics in front of every camera or microphone and on every talking-head program. Inform the taxpayers who will be footing the bill at every opportunity. Educate the public.
onlineanalyst on January 7, 2009 at 10:42 AM
Chairman
Maouh, Pelosi is going to fix things.Johan Klaus on January 7, 2009 at 10:46 AM
Pelosi promises to change the rules… again. Isn’t that the Democrats’ modus operandi?
When they don’t like the outcome, they change the rules, whether for fiscal accountability or election results or anything in between?
Call them on it, loudly, clearly, and repeatedly. Expose them for their less-than-honorable shenanigans.
onlineanalyst on January 7, 2009 at 10:48 AM
rplat on January 7, 2009 at 10:49 AM
“That’s quite the conspiracy theory you’ve got there ;)”
Are you aware that the market drop in Sept and Oct was the greatest ever, including the Great Depression?
Are you aware that the day after McCain took the lead in the Gallup poll the weekend of Sept 6 and 7, market volument went up 60% over the prior month and stayed there for 2 months. That had only happened one other time in the prior 60 years.
Are you aware that George Soros made $2.5B shorting the market in the first part of the year. His Sept / Oct profits aren’t announced yet.
Are you aware that Chuck Shumer made a statement in late summer that caused a run on Indy Bank and caused it to fail. Later, Harry Reid made a public comment that was clearly about AIG which subsequently required a $50B bail-out.
Are you aware that the market drop for 2008 was the second biggest drop in history. Yet, gnp growth in Q2 was 3.2%. unemployment was low and corportate earningw were good. We were not in a recession. Where are our bread lines?
Are you aware that the SEC is investigating insider trading associated with the bankruptcy of Lehman Bros.
Are you aware that Lehman Bros went bankrupt 5 days after McCain took the lead in the polls, and Paulsen declared “an emergency” a few days after that?
Are you aware that Henry Paulsen didn’t even spend any bail-out money for a month after he received the “emergency funds”.
Etc.
notagool on January 7, 2009 at 10:50 AM
small correction. The market drop in Sept Oct was the greatest drop ever in an election year.
notagool on January 7, 2009 at 10:50 AM
And it prolonged the great depression.
Johan Klaus on January 7, 2009 at 10:52 AM
This is not an insult but a genuine diagnosis; these people are insane.
Mason on January 7, 2009 at 10:57 AM
And we all know what the result of that is….
(I tried to find the clip of Kramer vomiting on Susan after drinking sour milk, but no results came up in my youtube search)
UltimateBob on January 7, 2009 at 11:00 AM
Sounds like the Dems are having another BF moment like when he ststed thheree was no problem with Fanny & Freddy mortgages. (BF= Barney Frank). So history guides the conclusion the Meicare will go code blue iin about 3 or 4 years.
droofus on January 7, 2009 at 11:09 AM
Why? Bush wanted a bailout of banks, Pelosi/Obama/Reid did too.
Bush wanted a “stimulus” packages last year. POD did too.
Bush wanted to give GM a bailout? POD did too.
It wasn’t POD that initiated the AIG or Bear Sterns or Citi bailouts. It was Bush and Paulson. And they wrote the checks directly without any doing from POD. And for the 3rd time, congress voted against the GM bailout. It was Bush and Bush alone who said screw you Congres, I’m sending over $20B despite what you think.
Bush has been arguably the worst president, fiscally speaking, ever. LBJ spent like a drunken sailor too and he comes in a close second. But Bush has set a new standard of just throwing money hundreds of billions around without any regard for the future.
I cannot fathom why anyone would defend this abomination of a President. Yes he has an “R” next to his name, but he is worse than any other “D” that was there before him. And I wish people on the right would see him for what he is.
angryed on January 7, 2009 at 11:32 AM
I loved the Bicentennial.
Seriously, I was in second grade and it was so great that I couldn’t wait for the next one.
I was in for a disappointment.
The teachers kept telling us that most democracies (yes,I know that we aren’t one)would have failed by now. 200 years was the expected life of a free country, they said.
As of today, I’m pretty sure that I’ll live long enough to see this country enter a death spiral.
Sad.
Dorvillian on January 7, 2009 at 11:41 AM
I tell you, guys: with 2011 and 2012 coming in the horizon, we have little time left.
If Congress decides to ignore this, each and every one of those clowns will have to deal with the stink when it actually comes. What can we all do? Get out of the way and save our skins – that’s what!
Nostradamus 2012? He probably never prophesied about this one: the entitlement crash will be a cataclysmic one!
newton on January 7, 2009 at 11:56 AM
OK, why are those two years important?
2011 – the first wave of Baby Boomers will reach age 65.
2012 – the next wave will, in bigger numbers than the first one. And on, and on.
Congress has a time bomb in its collective hands, and they’re not willing to diffuse it. It will explode in their faces.
newton on January 7, 2009 at 11:59 AM
It’s already exploded. The entitlement mess has finally been worked out, and it was such a simple solution that it’s surprising that someone didn’t think of it sooner. We collapse the whole system before the boomers retire. The economy is dead, it just doesn’t know it’s time to fall down, but it will figure that out soon enough.
DFCtomm on January 7, 2009 at 1:15 PM
Damn the torpedos! FULL SPEED AHEAD!
CynicalOptimist on January 7, 2009 at 1:25 PM
I urge all americans begin to pay off your bills as fast as you can NOW…
with the LIBERALS RUNNING OUR GOVERNMENT..
We wont last 6 months..
they arent in power for more than one day and already they are purposfully disreguarding all the warning signals..
Just like the sub prime mortgage crisis was ignored by the liberals they will absolutly destroy our country..
why do you think obama has hired a known anti gun AG..
The liberals want to disarm us first then destroy whats let of the USA..
I now firmly believe that all liberals and democrats
Work for either china , russia or IRAN..
jcila on January 7, 2009 at 1:26 PM
They know full well what they are doing.
There will be no “tomorrow” because the country will not exist. Their goal is to destroy this country.
Nahanni on January 7, 2009 at 1:39 PM
Is paying off your bills really the best thing? If hyperinflation hits isn’t the general rule to borrow. I myself am not paying anything extra on any loans I have, but I am hoarding my cash, and will probably, about, May convert it all into gold and then wait.
DFCtomm on January 7, 2009 at 1:47 PM
With talk of Trillion dollar budget deficits already in the air (as if bailouts for this and that in the hundreds of billions wasn’t bad enough) I’m sure there’s a home someplece in there to keep all those entitlement programs and more going. How else to guarantee people vote Democrat eh? No one will care what the deficit is just so long as they’re getting “free” s#!t from the govt.
As for who pays for all that well I imagine Obama and Co. will have been out of office long before that’s a worry for them.
Yakko77 on January 7, 2009 at 8:54 PM
DFCtomm on January 7, 2009 at 1:47 PM
If hyper inflation hits, cash quickly becomes worthless.
If you think hyper-inflation is around the corner, you need to be buying as much as you can, on credit. But only using fixed interest rates. The rates for credit cards can and will rise to match whatever the inflation rate is.
Basically, you need to get your hands on as much real estate as you can. Beyond that, gold and precious metals, they will retain their value while money looses it’s value.
Of course if you follow this strategy, and hyper-inflation doesn’t happen, then you are screwed.
If we instead hit a deflationary cycle, holding money is the best option, and being in debt can completely bankrupt you.
MarkTheGreat on January 8, 2009 at 9:51 AM