Your Portfolio Is a Sack of Lies
by Gary North
Years ago, I bought a domain name: www.NeverSayRetire.com.
I did this because I have long been aware of a crisis that will face tens of millions of Americans. They will not be able to afford to retire.
Every Western government has lied to its citizens, All have promised to provide an old age safety net. These promises will soon be broken.
Americans have long accepted these promises at face value. They have not applied a discount for the high risk of a government default on its IOUs. They have also not applied a discount for price inflation to compensate them for a politically inevitable policy.
Yet they are becoming vaguely aware that the government will in some way wiggle out of its obligations. Anyway, they say they think this. But they take no practical steps to hedge their portfolio of lies.
This is why I conclude that there is enormous self-deception in all adult age groups in the United States regarding the prospects of retirement. This self-deception is so comprehensive and so widespread that I have doubts about people’s ability to make assessments and then make decisions that are consistent with their assessments.
The financial media are beginning to publish articles about how millions of Americans will not be able to afford to retire. Americans have not saved enough money, we are told. This is accurate.
These articles are coming about 45 years too late. It was clear to anyone with an understanding of basic economics back in 1965 that Medicare would bankrupt the United States government at some point. A few critics said so at the time, but they were not taken seriously. The program’s expenses have grown relentlessly. They are going to undermine the solvency of the government. This means that there will be a default at some point. This default will also undermine Social Security.