Image via WikipediaAs I write this, I am watching Jon Stewart (The Daily Show) point out that, after the U.S. Government gave GM $20 Billion 6 months ago, it has now gone into bankruptcy and U.S. taxpayers are now writing a cheque for $50 Billion to own 60% of a company that is worth negative 90 Billion (-$90,000,000,000)
Canadian taxpayers have invested $12 Billion in the venture, to own 16% of GM. This increases total taxpayer ownership to 76%.(That doesn't include the initial $20 Billion gift from last year from the U.S. Treasury, nor the over $4 Billion from Canada)
Now, I know that my math is not very good, but I do know that 76% of nothing is nothing!
Now If I put that in my Retirefund, I get nothing, right?
But if I invest $62 Billion to ensure I own 76% of a debt of $90 Billion, Then where does that leave me.
Well, if the new entity again goes bankrupt, I lose the initial $62 Billion, and maybe as much as $84.4 Billion (76% of the company).
The Retirefund of Millions of taxpayers just took such a hit, and make no mistake, it has to be paid back, just like the 10.7 Trillion debt that the U.S. will book at the end of this year.
Unless something drastic and unexpected happens, Americans can say goodbye to Social Security as they understand the term today.
If you are under 40, it may not be there for you or your children, or your children's children.
The Drastic Action? - ***Prediction***: (oh, oh, shouldn't make predictions), sometime over the next year, the Obama administration will introduce a bill for a Goods and Services tax (a la Canada's) of 1% on "all goods and services sold or traded in the USA".
Every dollar you spend on anything (except groceries) like clothing, appliances, building materials, candy, bicycles, motor cycles, cars, boats planes, you name it, add 1%.That includes all labour.
Then look for this tax to "increase" to 2% in the following years.
Update Dec 11th 209 - New York Times Talks about VAT coming to America!