Bailouts and IRAs

In less than a month, the government has added $5T to our national debt.  They did it by printing money.  It's backed by nothing.  There can only be one result from that: inflation.  "Big deal!" I just heard someone say.  Yes, indeed, a very big deal, especially if you've already retired.

Washington is spending enough money that its effect will be felt almost immediately.  There are already reports of retail price increases for food.  What this means is that over the next few months and years, virtually everything you want to purchase is going to cost substantially more than it does right now.

If you're a workin' stiff, you can campaign for a wage increase on the grounds that your employer is charging more for whatever your employer sells/provides, but if you're retired:

• you're on Social Security and you're probably not going to get an increase in that,
• you have an IRA with a certain balance, and that balance isn't going to be adjusted upward,
• the stock market is presently in the basement.

That $3,500 cruise you had planned for next Summer?  It'll be $4,000.  For every $7 you were planning to spend, you now have to plan on spending $8.  To put it another way, if you had $400G put aside for your retirement, somebody in Washington just stole $50G.  The balance in the account doesn't change; only its purchasing power does.

Now, if you happen to be one of those fortunate people who are the beneficiaries of the bulk of that $5T bailout, you can grab your pot of gold and put it where it will generate some more wealth for you.  If you're Joe Sixpack, you're shit out of luck.  Better luck next time.

And the reason for all that extra spending?  It's to combat the ill-effects of COVID-19.  The Kennedy Center needs money to help them get past the enforced shutdown, and Planned Parenthood seems to be... well, to be honest, I don't know what they're doing to battle COVID-19, but it's important enough for them to rate $35B.  In fact, almost none of that spending will actually help the man in the street... excuse me, the man forced to quarantine at home.

The real problem here is that all those people who just got the shaft from the financial wizards in Congress will go to the polls in November and re-elect the very same people who just stole 13% of everything the voters had saved, because "Hey, I got a check for $1,200!"  They saw that; they didn't see their retirement savings shrink by 1/7th.