My Daughter

My Daughter
Remember when you learned how to do this?

Tuesday, April 14, 2009

GM Pensions Could Be Worthless

All pension schemes, be they GM, Social Security or 401K are not supportable in the long term without perpetual growth. The longer a company is in business, the more retired workers it generates. You need to keep increasing the number of new workers and the size of the business to pay for all the retirees you produce as well.Immigration was encouraged in the US to keep the Ponzi scheme alive. As long as more workers kept coming in and could be taxed on their labor and their consumption, those at the top of the pyriamid who got in early could still be paid off. Now of course, nobody wants new immigration, because there aren't any jobs for them on which they could be taxed to support everyone else.

It doesn't matter whether you saved for your retirement yourself in a 401K invested in "safe" Bonds or whether you participated in a pension scheme like GM or just stuffed your mattress full of dollar bills, you still will get the same result in all cases. There isn't productivity to keep paying nonproductive people in perpetuity. The money in the matress gets renderred valueless over time thru inflation.

There is no such thing as a "safe" investment, and everybody is going to get punished for simply being part of this system to begin with.Blaming GMs failure on the burden of its pension system or the Unions is ludicrous. The whole REASON workers gave up their lives to deadly boring jobs on the assembly line was because of the PROMISE made to them of security through the pension and health care bennies they offered to employees. That is HOW GM got its workers. Unions simply negotiated on behalf of the workers for the best deal they could get, and you always have more bargaining power as a group than as an individual. Of course as soon as they could find cheaper forms of unorganized labor in China and Mexico, off they went to those places with the jobs, but by then it was all being financed thru debt anyhow, and they still had the burden of obligations made to get the car company off the ground in the first place.

It had to fail, and so it did. Its really just a microcosm of the whole Capitalist scheme, which eventualy becomes top heavy and periodically has to crash. Long as there is still exploitable resource out there you can restart after a while, but we are fresh out of those resources now.How long before every last system here collapses?

ShortonOil pins the maximum as late in 2011, that seems a reasonable estimate to me, but I'll be surprised if it lasts that long. Every last financial scheme out there is in some stage of collapse at the moment, and is only being propped up by steady infusions of Funny Money. Its all going up in flames now, in the Greatest Bonfire of Paper Wealth in all of Recorded History.

No comments: