Friday, March 3, 2017

The senators will learn to take losses

They really cannot price fix for longer than 5 years without the sandbox noticing. Five years because the tax dollar is stuck with a synchronous senate election.

Take social security.  It lives with the odds of a default in its cash flow.  That risk arises because of one sided inflation adjustment.  Why one sided? Mostly failure to pay attention to what the senators are doing. But it is a price fix, and it jams the retirement system because the boomers time their retirement to avoid the short fall. The result is a crash, and a helicopter about every 50 years.

The sandbox measures this way before the helicopter warms up, the sandbox is Ito stable, sooner than the Fed. So the senators are stuck, they will be forced into default, the liquidity is too optimally distributed for them to price fix much longer.

So, the simple solution is to have social security bank at the Fed, like 6 billion other people will effectively be doing.  If the cash flow  is out of balance for a time, the fund suffers losses, otherwise it suffers gains.  Lets the odds determine rule hete. If the senators do not like it, then vote to change the ins and outs and make another five year guarantee.

We are not saying the senate cannot be foolish a period, we have just shortened the period.  The senate will update the program more often. Otherwise, the overlapping generations will be getting flashing reds from their hardware wallets.

The cash card and the social security law

As an aside, not related to banking, let us ask: "How does the cash card deal with entitlement taxes"

Like any other law, the card will obey it or not obey according to your thumprinted verification.  Biomatching always rules in your relationship to your pure cash card. The exception is bankruptcy, your card handles that fairly and autonomously with the bankruptcy judge.  Bankruptcy is a mathematical necessity, free entry and exit.

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