Skip to comments.Vanity: So when will the "Entitlements Crash" occur?
Posted on 11/10/2012 6:31:59 AM PST by The Working Man
The question that arises in my mind now is this: When will the "Entitlements Crash" occur?
First off by "Entitlements" I mean those programs that the Government has labeled as such. Social Security in it's myriad forms, Medicare, Medicaid, ObamaCare/Health care mandates, and a all of the rest of similar programs.
Next a "Crash" is like the stock Market Crash of 1929.
As I see it we will probably see the "Entitlements Crash" in mid 2014 and at the latest by early 2016. Why then? Well I expect that the U.S. will see at least 70% to 80% of the population on "assistance" of one sort or another probably food stamps/EBT. The remaining workers/producers/taxpayers can't pay enough in taxes to fund those programs as well as the other Government programs.
I also believe that Treasury bonds will have to have exorbitant rates of return before anyone would even think of purchasing them. That will come about as our Credit rating slides down towards "A" from the "AAA" it was when Obama became president in 2008. To me that will indicate that our borrowing will be at an end. The old "I'll gladly pay you on Tuesday for a hamburger today" will be over and done and tromped into the ground.
So... With demands for services way up! And income WAY down. Something will give, Bankruptcy or simply halting those services or at the least knocking them way back. An "Entitlements Crash".
So for me it will come as early as 2014 or as late as mid 2016. What about you? What do you think?
You’ll know when it happens.
I dunno, just ask a Greek how long it took there.
Why do we always here about the billions of dollars that will be cut from the defense budget due to the sequestering deal at the end of the year, but we never hear that an equal amount is supposed to come from cuts in entitlements? Is is because the Obama Socialists have no intention of cutting those, no matter the “deal” they supposedly made? The entire cut will probably come from defense, because they always support that.
The Democrats lied to Reagan and didn’t cut spending after he raised taxes. The Democrats lied to Papa Bush and didn’t cut spending after he raised taxes...and even crucified him in his re-election bid because he raised taxes!
So Republicans who would raise taxes now, on the worthless promise of the Democrats that spending will be cut, are really too stupid to hold office.
It will start in California, we’re about 80% there.
Productive taxpayers and businesses continue to flee the state (there is a premium on U-hauls leaving California) - and destitute immigrants continue to pour in.
We’re flat out of “other people’s money.”
In 50 years, the politicians in Sacramento have ruined my home state of California.
— Michael Reagan
3 Scenario’s -
1. Never, Bernake has promised to print money(electronic transfers) to accommodate the Democrat’s financial failure(spending).
2. Sooner, Starve the Beast 2.0 is effective in lowing revenue to GDP, Democrats and the media can only hide the negative macroeconomic effects for so long.
3. Between 1 & (1/2) and 3 years out, as many others have predicted.
There will not be a entitlement “crash” as a time when the EBT card stops working...
It will be a slow devalue of such entitlements....
SS will be first since seniors are going to die anyway and will eat cat food without rioting
Final election results are in:
No amount of explaining can make these fools understand. The “everybody gets a trophy” mind set will not be swayed. Which one would they vote for?
1. I’ll take care of you.
2. You’ll have to work and be responsible for yourself.
Helping keep mankind warm for 65 years.
This “crash” may come much more quickly than most anyone might imagine.
Daily, there are reports and anecdotal tales of businesses that are either about to close, or shall very soon, as they cannot operate profitably because of sharply rising taxes, or draconian regulations that seem to be written for the express purpose of bankrupting what productive capability we have remaining.
Bankrupt businesses do not hire people. Self-employment, if subjected to too much regulation, responds by going underground, operating on cash-only or barter basis, further eroding whatever tax base remains.
There is every reason to believe this will have a snowball effect beyond anything the United States has ever experienced.
Declaring a date of 2014 to 2016 may be unduly optimistic.
SNAP (”Food Stamps”) is not what’s breaking the bank (its around 2.1%, expected to go to around 2.2% in 2014, declining to around 2.0% by 2020.
Even if you include all “safety-net” spending (excluding Medicare, Medicaid, and CHIP) it’s around 13%, and is projected to decline slightly by 2020.
The first stage of the “crash” (actually, a “slide”) kicks in about 2 years out as a result of Medicare and Medicaid costs.
And that’s not just a problem of “Government Spending”, it’s a systemic, cost-driven crisis in the entire health care system.
If you want to learn more about this, I recommend:
“Healthcare Beyond Reform: Doing It Right for Half the Cost”
Only a minor correct, you had it almost entirely correct. My compliments.
Former President Reagan increased revenues after eliminating deductions (minor ones). The deductions eliminated were deductions (mostly) for those in lower income brackets. Then came the deal, the hand shake, the jobs (lots of jobs), and increased revenue from jobs created. It became a boom in no time. Incomes increased, jobs increased, revenues increased. This time the situation is a little different. There is no jobs plan or methodology whereby the democrats are interested in job creation, at least not from what have seen. No jobs, equals less revenue. Also there were tax cuts to create jobs. No such plan this time. I pray you are not angry with me for typing this bit of information. I really think you did a fine post. And btw ... what do I know? I only alive during that time of President Reagan's successful deal. It was a wonderful time.
1. Social Security Disability Insurance claims have risen dramatically in the last few years, and it is pretty well understood that a lot of permanently unemployed people whose unemployment benefits have expired are collecting SSDI to replace their unemployment benefits.
2. The number of employed Americans relative to the total population has continued to decline, regardless of what the official unemployment figures indicate. This has occurred even as Social Security and Medicare outlays have increased dramatically as Baby Boomers begin to retire.
3. Coupled with the previous point, average incomes in the U.S. have declined in the last few years -- and payroll tax revenues have declined with it.
Get out of blue areas, WROL will be lethal there.
Amazon CEO Jeff Bezos donated $1 Million to promote same sex marriage this election cycle - I wouldn’t buy my last meal from him.
It’ll happen immediately before the inflation crash - the day when the government has printed so much paper money to cover its bills and other expenses that it takes a wheel barrow full of money to buy a loaf of bread.
Good-bye savings account, good-bye retirement account, good-bye rainy day account, good-bye cookie jar account. King Hussein the First, of Kenya, will see to it that you have all the cardboard shoes you need and all the tree bark you can eat.
-——Self-employment, if subjected to too much regulation, responds by going underground, operating on cash-only or barter basis, further eroding whatever tax base remains.-——
I run a business that services exclusively to the self employed...
I have an in house account for people who want to buy off the “ books”
In the last two years it is my # 1 account now...it was basically used for new customers until they were set up with a customer number...
People are doing exactly that....avoiding regulation which means avoiding taxes just to survive ...
It wil only get worse ....
Nope, the authour is ignoring all the other probable results out there:
Military coup (Obama would call it a "coop")
Well, I don’t think it will be four years. Obama drove the debt up from 60 percent of GDP up to 120 percent of GDP. Japan hasn’t collapsed yet with around 200 percent of GDP, although they have gotten their spending under control.
I figure Obama will drive up the debt to around 180 percent of GDP, around where Greece sits today. That is close, but not quite into death spiral territory.
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