Think the Fed Financial Crisis Doesn’t Affect You?

It’s easy to get lost in all of the rhetoric coming out of Congress and the White House these days. For years, we’ve Wrong Way Signseen nothing but a series of lies, mistruths, selfish mindsets and ulterior motives. All the while, we’ve been forced to sit back and watch it unfold. Amidst all of this, there are the debt ceiling crises that have taken over mainstream media from time to time, only to fade into the darkness when a new and better “breaking news” story hits. Now, as yet another deadline looms, which really is just proof that the elected folks have drastically failed yet again, the repercussions are many. Don’t allow yourself to become indifferent because it seems so familiar. There’s a lot at stake.

Medicare and Social Security

This is a double whammy for seniors and the elderly. For around 70% of Medicare recipients, they’re protected from an increase in their Part B premiums. Part B is the portion of Medicare that oversees doctors and hospital payments. They’re protected because they are not receiving a cost of living adjustment – also known as COLA – from Social Security. Since there’s been no inflation, there are no increases for recipients. The law doesn’t allow Medicare premium increases if there are no COLA increases.

That still leaves 30% of Medicare beneficiaries who will shoulder 100% of the Part B premium increases. That equates to about 7 million seniors and elders. Now, we all know Congress can halt this, but we also know their track record. Couple this with everything else that’s going on: 2016 race to the White House, the absence of a speaker of the house and the general bickering they’re known for, and it becomes worrisome. Oh, and did I mention the deadline is November 2nd?

Remember: they could have prevented this – in fact, they PROMISED we’d not run up to another deadline the last time they run us up to a deadline. This could have been avoided. If you’re wondering what the Obama Administration is saying, you’ll appreciate this: “We share the goal of keeping Medicare’s premiums affordable, are exploring all options, and appreciate the interest and ideas of members of Congress,” said White House spokeswoman Katie Hill.

Shared goals and appreciated ideas. Great.

For those who are facing this 52% premium hike, it equates to around $60 each month. Currently the premiums are around $104.50. They will increase to 159.00 each month.

Who’s at risk?

  • New Medicare applicants in 2016
  • Medicare recipients with incomes over $85,000 or if they’re married, $170,000
  • Low-income income people whose Medicare premiums are paid by state Medicaid programs
  • Medicare recipients who don’t receive Social Security

Even if you’re still working – even if you’re in your 20s, these are the types of problems where Band Aids are applied and by the time you prepare for retirement, you’ll remember decades earlier when no one was willing to do the right thing. Odds are, all of us – no matter our age – have loved ones who will be affected today and tomorrow and next week. This matters to all of us.

Keep in mind a few more things that should provide a bit of perspective as well:

New numbers suggest a full 2/3 of Americans have absolutely no retirement savings. That’s huge…mostly because it’s a far bigger problem than anyone anticipated. Remember the MyRA retirement program Obama introduced last year? Not a single state has implemented it. Not one.

We’re working in the belief that employment is sound. The numbers have been so twisted for so long that it’s actually laughable. More companies are talking (and in fact are already in the process) of layoffs. These higher numbers aren’t all being reported as they should because they’re being referred to as furloughs and not layoffs, so the government isn’t taking them into consideration.

Our stock market is just as laughable. This has become nothing but a heavily modified “ideal” that has no degree of truth at all. Do you realize our financial sector is being determined by a Fed that can’t figure out how it backed itself into a corner, a global economy that’s worse than our own, but doesn’t realize it and backdoor deals and dynamics created to save taxes, keep more dividends and shift and change with very little regulation? Folks are getting rich. I’d say there are about 100 people benefitting from the shady practices built on non-existent foundations. When these strange business structures finally crash and burn – and they will, the taxpayer will be the one to cover those costs. And we will. But right now, we have a bigger crisis on our hands. Our senior citizens need to eat and have access to their medications.

We Know the Costs, but are Ivy League Educations Worth it?

For the most part, the past few years have meant contracts with several financial-based clients who require my attention to be focused on Wall Street, Jamie Dimon and the rise and fall of the American credit card. While I’m no financial whiz, nothing gives me greater pleasure than knocking Jamie Dimon down a notch or two when his narcissistic declarations get in the way of the big picture. And his narcissism is what I hope ultimately brings him down – but that’s for another post.

The next week is my “calm before the storm”. April 15 is creeping up on us and there are several big reports everyone’s waiting on from the government. That, along with the upcoming presidential elections and the highly anticipated ruling from the Supreme Court on Obamacare, is sure to make this summer quite interesting. For now, though, or at least, for the next week, it’s all about catching up on Rolling Stone, Cosmo and all those episodes of the Brady Bunch I’ve been careful to not delete from the DVR. And don’t judge me.

I couldn’t wait to read Janet Reitman’s piece in Rolling Stone, “Confessions of an Ivy League Frat Boy: Inside Dartmouth’s Hazing Abuses“. This, of course, has to do with Andrew Lohse, a former Dartmouth frat boy who was also the editor of the student paper, The Dartmouth. He decided to open the doors to those secretive hazing episodes that has resulted in the deaths of several kids across the country. I’m always amazed that a group of college kids can keep the lid on their secret lives in the fraternity while the U.S. government can’t figure out how to keep Julian Assange quiet. Again, though, that’s for another post.

As Reitman tells the story, images of rather disgusting behaviors begin to surface. The things these kids are willing to do is disturbing and begs the question “Why?” I understand the obligatory answers: to belong, to be part of something greater, to be a “bro” – I get all of that; but seriously? As Lohse describes in his editorial, “I was a member of a fraternity that asked pledges, in order to become a brother, to swim in a kiddie pool of vomit, urine, fecal matter, semen and rotten food products; eat omelets made of vomit; chug cups of vinegar, which in one case caused a pledge to vomit blood; drink beer poured down fellow pledges’ ass cracks… among other abuses,” Who in God’s name would want to be a part of that brotherhood when the family you come from has the resources to send you to Dartmouth?

Here’s where I was able to link the incredulous story told by Reitman and Lohse. Earlier this week, the government released its own alarming report. In one of my recent posts for a client, here’s how I broke it down:

Did you know there is more than one trillion dollars owed in student loans? And did you know that figure continues to grow to the tune of almost $60 billion each month? It’s true. It’s also true that the delinquency rate is rapidly approaching the 30% mark. Of course, there are a lot of dynamics at play. The job market continues to struggle and college graduates are coming out of college with their degrees and no jobs to go into.

The icing on the cake is the realization that today’s college graduates are entering a job market where only 46% of the nation’s 18-24 year olds are employed. It hasn’t been this low since 1948, when the government began keeping up with the numbers. An ivy league degree isn’t really giving these young people an advantage. Unless you’re in New York or DC, or are willing to move out of the country, my guess is that noble Harvard or Dartmouth degree, while impressive, won’t amount to much, especially considering employers who see these educations on a resume will immediately dismiss the candidate because he knows his company can’t afford the applicant.

So, basically, we have a lot of frat boys who went to great lengths to “belong” to their brotherhood while gaining their ivy leave educations. Unfortunately, they’re going to struggle once those glory days are behind them and they realize that big bank or law firm that Daddy once ran is now in jeopardy. In hindsight, I wonder if it will occur to them that not only did all those vomit omelets do little more than place them in a so-called family that would allow that to happen, but that they’re also competing with people they never thought they would have to battle for a job. You know – the ones who took a bit more realistic approach to their futures and “settled” for a state university.