Mish's Global Economic Trend Analysis

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Time to Wave the White Flag on the "War on Poverty" Posted: 30 Mar 2013 06:38 PM PDT In response to Unwilling to Work; 25% in Hale County AL Collect Disability, 14 Million Nationwide; A Simple Solution I received some interesting emails from readers. Regardless of Insurance, Taxpayers Pay Reader Chris writes Hey Mish, I have been discussing disability for quite some time with others. I know a few people on disability who should not be qualified. I also have one good friend who is on disability for back problems. He had several surgeries and is genuinely disabled. The interesting part is my friend paid for his own insurance for 25+ years and the minute that he was declared unable to work, a lawyer saw to it that he would go on SS benefits. The insurance company collected premiums for 25+ years and now the government (taxpayers) pay. Discussion on Radio Station KMJ I was on radio station KMJ in Fresno, California for 45 minutes on Friday discussing my post on disability. Mike, a disabled worker was kind enough to share his thoughts. Mike writes ... Hello Mish I just heard you on KMJ and agree with what you have said. I am a disabled person working in the social services system, I will soon be retiring due to stress related problems. I would like to keep working at another position with less stress but many of my friends think I am stupid for wanting to work instead of taking social security. Time to Wave the White Flag Reader Claudette, writes ... Hello Mish Thanks for a good post on a complex issue. SSI/SSDI comes from social security funds, making that program even less sustainable over time. I also see those who are truly disabled and unable to be competitively employed...they are being sustained in poverty by this program because of the sheer numbers in the program. Multiple disincentives are built into the system to getting a job for fear of losing your stable disability check and Medicare coverage, so that it is very hard for the state Vocational Rehab system (where I work) to get disability recipients back to work. There are few entry level jobs that pay enough or have benefits adequate for the recipients to take the risk of leaving the safe harbor of Disability. Let's just raise a white flag and admit that the "war on poverty" has been lost and look critically at how our programs sustain people in poverty rather than lift them out of it. Thanks all. Yes, it is time to raise the white flag. Many of these programs are structured to keep people on disability rather than get them off disability. Reader mike shows the pressure on the few who really do not want to take advantage of the system. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Beppe Grillo "We are the French Revolution Without the Guillotine" Posted: 30 Mar 2013 09:38 AM PDT With Beppe Grillo unwilling to form a coalition government, and with Prime former Prime Minister Silvio Berlusconi making demands that Bersani will not go along with, Italian President Giorgio Napolitano Considers Options. One of those options includes stepping down early so the next president can call elections. Under Italian law, an outgoing president is restricted. Napolitano's term ends mid-April. Napolitano, who met with lawmakers yesterday, may make an announcement today, the president's spokesman said late yesterday. Napolitano will continue talks with leaders in parliament and may consider resigning, daily La Repubblica reported today, without citing anyone. To reach a compromise, Napolitano would need help from lawmakers loyal to either former Prime Minister Silvio Berlusconi or Beppe Grillo's Five Star Movement. Berlusconi said yesterday he would back a government in partnership with the Democratic Party, while Grillo reiterated he will shun a deal with other parties. "We were and still are open to giving life to a coalition," Berlusconi, 76, said yesterday after meeting Napolitano. "We think it's logical that if we form a government together, a coalition government, then together we must discuss about who will be the best president of the republic." Vito Crimi, Five Star's head in the Senate, and Roberta Lombardi, the party's leader in the Chamber of Deputies, repeated their resistance to compromise after meeting Napolitano yesterday. That position was praised by Grillo later in an interview broadcast on his website. "We're going to win with our ideas and our strength because we're a miracle," Grillo said. "We are the French Revolution without the guillotine." Poison Pill Silvio Berlusconi is willing to form a coalition but his price of admission is high. Berlusconi wants to shield himself from further lawsuits, and he wants new rules favorable to his PdL party. He also wants the PdL to name the next president. Grillo would never go along with such demand, and Bersani has thrice ruled out such a deal. The sane thing to do would be for Napolitano to step down so there could be early elections. If he goes the route of attempting to find a technocrat suitable to everyone, the odds of success will be very low, and the odds the election delayed until September, high. My main scenario remains No Working Government for 7 Months, Then Elections in September but an early resignation by Napolitano could alter the time line. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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