And as far as burgeoning enconomy goes: M3, read inflation, is calculated to be running at about 10-12%. All the fiat streaming off the printing presses is going to Goldman Sach, Citi, JP Morgan et al and into the stock market. Asset inflation and the stock market bubble is not long for this earth. I am out of stocks and long on gold. The only people making money are the ones buying and selling money. This is not wealth creation we are talking about here, it is merely passing the paper around.

Shadow account simply means, its an accounting entry because the money as it came in and the interest is all never seen. It just goes into the general fund and stays in it until some is needed by a state for unemployment payments. So, in a downturn, we may be in worse shape given what is going on than we currently expect. Hope I am wrong on that one.

If that is the case, look for the Fed to do something to try and hide the problem if possible by getting employment going as quickly as possible. Usually that is interest rate cuts but that will weaken the dollar even more.

We are cutting programs, department budgets, and other things to keep funding social spending and the war and prescription drugs and Medicaid and education and other things that most of which shouldn’t even be federal programs outside of the Constitutional requirement for defense.

We have a $59 trillion unfunded liability and are facing 78 million people leaving the ranks of workers and thus the ranks of Payroll Tax payers and becoming collectors of what they paid in, except it isn’t there to collect. It was loaned out.

Even with the surplus, since it is loaned out, we have to pay in enough taxes to buy the notes in the surplus account and pay the interest due on them each month once inflows are less than outflows and no extra is being paid in to the surplus.

They say the surplus will start being drawn from, not added to by 2017 but, that is with illegal immigrants (soon to be legal if Congress gets its way) paying in the extra that isn’t immediately paid out to current retirees. My question is, who pays in the surplus during the next downturn. If the jobs dry up and the illegals go home, the unemployment report will look OK but, there will be that many less people paying in.

Also, in a downturn we can expect some early retirements and thus more people drawing early from social security at 62-66 instead of at full retirement age (what is that now? I know it has been moving up). We can also expect people drawing unemployment and not paying in but rather drawing from unemployment accounts (are they loaned to the general fund too?)

If we have a serious downturn that lasts a couple of years as “boomers” retire, we could see a dramatic drop in the surplus long before 2017.

However, Congress doesn’t believe voters will support reform either. I think they hope we will focus on illegal immigration so much we will overlook the fact that they are raising quotas to astronomical levels.

This is what is really bothering me. Other than Frosty Woodbridge, few are hammering the other “bad news” that even if they were to deport the 20 million here, they would immediately bring them back legally and another 67 to 100 million to boot.

I still think some of this is a delay too. The longer they delay, the more that come in across our open border. And, they admit they are raking in billions of payroll taxes they put in “special accounting categories” because the money came from a bad number. That money, of course, is also immediately loaned out to the general fund which reduces the loans needed from China, Russia and OPEC.

If they stopped all illegal workers from work and paying in (about the amount of surplus paid in each month) they would have to increase borrowing from China, Russia and OPEC and they are already regretting the power they have as bankers. But, how do you tell the American voter how big a mess our debt has gotten us into?

Texans are saying they have been defeated in their effort to stop the TTC construction and that Gov. Perry has the upper hand again. The movement of “people” as well as goods to the U.S. is a high priority.

Why not secure the border?

The immigrations quotas until this new immigration bill or bills are passed is way lower than what Congress believes is needed to keep workers to retirees at 3 to 1 or more. So, if you can’t bring them here legally until those quotas are raised, you bring them here illegally and then grant some type of amnesty or “guest worker” that leads to as much as amnesty.

Good luck America. You are going to need luck because “skill” in Washington is killing you.