Skip to comments.Fiscal Cliff? The Real Threat Is The 'Entitlement Cliff'
Posted on 10/16/2012 5:24:43 AM PDT by SeekAndFind
Putting Paul Ryan on the GOP ticket ensured that the presidential campaign would focus some attention on Medicare's fiscal challenges.
But that debate barely touches the scope or depth of the entitlement challenges facing the U.S. economy. The fiscal cliff coming at the end of the year pales vs. the entitlement cliff forced on us by a multitude of entitlement programs that we can't afford.
Most people think of entitlement programs as Social Security and Medicare for seniors, Medicaid and perhaps some other means-tested welfare programs. But there are many more: veteran benefits, unemployment, the children's health insurance program, disability income, the GI bill, Head Start.
The U.S. Census Bureau says 108 million Americans live in households where at least one person participates in a means-tested program. We estimate that 80 million are the primary recipients, though millions more share those benefits. That number has been growing rapidly under President Obama.
Since the president took office:
Medicaid is up from 46.9 million to 56 million people.
Disability beneficiaries are up from 7.5 million to 8.8 million.
The food stamp program has grown from 32 million Americans to 47 million.
Add to that 80 million beneficiaries 40 million Americans age 65 or older on Social Security and Medicare (9 million of the 49 million on Medicare, including some under age 65, also receive means-tested benefits).
That 120 million does not include the numerous smaller entitlement programs.
(Excerpt) Read more at news.investors.com ...
As Tip ‘o Neill used to say ...
“A billion here, a billion there, and pretty soon you’re talking about real money.”
Put them all together, and a number approaching half of the country participates in an entitlement program.
Now add in the 16 million new Medicaid beneficiaries, thanks to ObamaCare, plus an estimated 12 million people who enter the health insurance exchanges by 2014, where most will receive federal subsidies.
The budget implications of these programs are huge. For fiscal 2012, America spent $2.2 trillion of its $3.7 trillion budget on entitlement programs $400 billion less than the $2.6 trillion in gross annual revenues.
Oh, and interest on the federal debt was $220 billion.
60% of the budget goes to entitlements, but I’m sure that number has been climbing since Obama took office. We’re probably at 65 or 70 percent now.
This editorial is right. The MSM uses phrases like “fiscal cliff” and says we need to do something about the “deficit.” Those words hide the problem, which is SPENDING. In particular, domestic social spending, including entitlements. We need to cut spending, period. Look at any graph or chart of spending over the past 5 years, 10 years, 20 years, 40 years. It has gone up way faster than inflation and population growth. It is the problem, not the “deficit” or some “fiscal cliff.” I don’t even know what “fiscal cliff” means. Its silly. Call the issue what it is — a huge increase in spending that is not supported by tax revenue.
A billion here, a billion there, and pretty soon youre talking about real money. Everett Dirksen
The other day, I got in line behind one of Holder’s women at the local Turkey Hill convenience store. She was buying state lottery tickets (PA). It took five minutes for her to buy all of them she wanted. She then paid with her welfare entitlement card. In short, I paid for her lottery tickets. And I felt like screaming.
Sooner or later, we are going to have to defund the Welfare Vulture Culture. If it takes a civil war, so be it.
California is now floating tax increases (Prop 30) just to keep up with teacher pension funding. It ain’t about the kids!
The real threat is socialists.
“Socialism Is Legal Plunder” - The Law - Frederic Bastiat 1801-1850
DEFUND socialist collectives, foreign and domestic.
DISMANTLE domestic socialist programs.
DEPOPULATE socialists from the body politic.
DEFUNDING PBS/Big Bird was a good start. /sarcasm
Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it. - Bastiat 1801-1850
Above all, if you wish to be strong, begin by rooting out every particle of socialism that may have crept into your legislation. This will be no light task. - Bastiat 1801-1850
BIG GOVERNMENT IS CRONY SOCIALISM
Progressive plunderers and tyrannical totalitarians have placed many mandates on our existence, our time of life, our labor. We, our children and grandchildren, have become debt slaves to those organizations of sophisticated socialists.
live - free - republic
That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
It’s about the handouts at all levels of g’mint and citizenry.
Remember how it was about the oil.
My favorite part is how they turn around and demonize the “rich” who have already. in to many instances, given them more than they deserve.
Commies B commies, no matter their temporal location.
They will always demonize “the rich”, and as things get worse, whom they are pointing at goes down the scale.
To most sheeperals, “the rich” simply are those that are perceived as having more than they do. And it’s not about wanting or getting what “the rich” have, it’s about using the force of gov’t to keep “the rich” from having it at all.
It's math, not politics. We are nearing the end of a long exponential function which will inescapably explode upwards. Any president making the required deep cuts will be savagely attacked and run out of office by the ignorant masses. It's a lose-lose situation for all the pols who must make the decision... and every month that goes by in avoidance, makes the ultimate solution increasingly more painful.
Blessent mon coeur dune langueur monotone.
The entitlements will be cut.
It’s just a matter of whether they are cut in a managed way, or in a catastropic failure.
There are way to many people who are second hand communist. They’re not reading Marx or Alinsky.
They are useful idiots,pawns, and even some are sellouts.
Most of them don’t care they just know someone wants to give them “free” stuff and someone else wants them to make a effort at being self reliant.
Glenn Harlan Reynolds: The Higher Education Bubble Is Going To Burst
Someone posted last week -
the adult that says “no more free candy” to a room full of children is NOT going to be popular.
It maybe worse.
IMHO we do not know if GAAP procedures are being used in Disney on the Potomac, what games did Reid-Pelosi-Obama pull w/ the numbers and agencies...
My latest prediction? My friends think I am nuts on this one..
I think things are so bad, that when Romney-Ryan do a full up GAAP accounting of the budget that they ask Wall St to close for a week to explain it to the American people like GWB closed the Markets post 9/11.
A series of Come to Jesus State of the Union Speeches with both Houses in Session to explain it all...
A penny for your thoughts...
Romney is going to need Cost-Cutters / Turn-around experts.
The Ultimate one IMHO is Alan Mulally.
I don't want to ask him to leave Ford, that is his decision, but man, talk about the Go-To guy to add to Team Romney to help get our Fiscal House in Order...
Just to P*ss off the left and the likes of Schumer make him a Czar so he doesn't have to go through hearings for Confirmation ! LOL !!
THIS is the single most critical issue facing our country, our government and each one of us. We are way beyond "managed" cuts, or tax increases to solve it. As Chuck Yeager would say, we're going to "auger in", and the impact will affect every living soul on the planet except hunter-gatherers. Frankly, I'm not sure why anyone in his right mind would want to be a politician at this point, because all they have to look forward to is the wrath of the electorate.
We've been lied to. The lying must end. But how do you tell the "Obama-phone Kids"? Do they even have the education to understand the coming "cliff"? It will be those angry folks who will make politics, or walking in the park, or washing your car a life-threatening activity.
May God help us all.
These kinds of articles may be of interest to those who are now only getting up to speed. But for those of us who have been on top of this since the beginning know how it's gonna end - badly.
I used to fall in the deflation camp - I actually thought (silly me) that governments would follow the rule-of-law with regard to defaults and proceed via 'normal' bankruptcy channels.
Now I know better - they've chosen effective default via currency destruction. After all, this allows them to retain their bonuses & positions of power.
At the end of the day, it functionally doesn't matter if (a) they tell the 47% there is no more money; or (b) they lock the CPI and pay the 47% pennies on hundreds of dollars.
Option B keeps the structure in place - for awhile at least, which is all they're hoping for at this point.
What makes you think Romney would be any different than Obama? What possible reason would he have to bring this issue to a head? The plan is to drag this out for as long as possible so as to maximize each person's tenure in office/position.
Any cuts, any declarations, any 'adult conversations' will be the catalyst that sets off the CW2. They know it, we know it, the markets know it. So, continue running deficits, continue printing $trillions, let prices rise, let their people commence with the screeching & complaining, but never, ever give the People a moment where it all becomes perfectly clear what is occurring.
A strict wage/price freeze might delay things during economic surgery for a little while, but basically we’ve got a dead parrot and nailing its feet to the perch will be a tough and painful job, if not useless. Denninger has been blowing this horn for quite some time now. I tend to believe him, especially when he talks about prison terms for the guilty.
He is selling himself as the “fixer” I will hold him to it... Then we hold their feet to the fire, Romney’s worst critics won’t be the Rachel Maddow’s of the world it will be us... If they don’t listen we throw them out too with the ballot....
I’m mid 50s...have made pretty good money and paid income from family businesses too and then lost most of that to inheritance tax
yet i have by aged 55 paid around 300,000 in medicare payroll tax
by 65 if still here I will pay another 50,000 or more
hence by the time i qualify i will be over 350,000 in..
so is it an entitlement for me?
i sure don’t think so...unless i live really old and get real sick a lot
which is sort of a mutually exclusive dichotomy
9000 per year invested for 40 years at 5% is about 1.2M
just as a reference
resentment by younger folks here towards those of us who are btw the way the first to have paid all in is to me reflective of the generation that was the first where everyone got a trophy...just for showing up
Let’s be honest. The level of entitlements has justified people cheating on their taxes if they can get away with it.
I can't imagine anything more incendiary than a government mandated freeze on private wages and prices.
One immediate consequence of a true "freeze" would be that the one trillion dollar deficit would be made permanent, assuming that a tax rate freeze was included.
No, you were right the first time. It's ALL about getting what "the rich" have, period. They don't deserve it, ya see. They got it by screwing the poor, of course.....not by education, hard work, risk taking, etc. No, homie and trailer park Joe & Bertha DESERVE to have more of what "the rich" have, so yes, they will vote for a government that has the same goal for vastly different reasons: redistribution of wealth as a means of control of the populace. Ain't Socialism/Communism grand? F**kers.
Given your age, I'm guessing that by age 65 all you'll be entitled to is a visit with your Death Panel rep.
lol...he better come loaded
maybe he’ll be from planning-codes-zoning-motor vehicle....and public healthcare
the grand slam of aparatchik madness
every single one is unsustainable....
I love how SS gets the most abuse.....after the thousands and thousands of dollars paid in over decades by the worker and his employer, somehow its the first thing they want to cut....
not the other stuff....just that evil SS....
as taxpayers, most of us paid SS and Medicare our whole entire lives...not just a few years to qualify like some...but our WHOLE lives....
yet now, that's what they go after....not the $100,000 govt pensions with health care....but the $15,000 a year SS recipient...
Keep in mind that SS is and was always just a tax. You don’t have a property right to the tax money you pay the government and they can spend it on anything they want. In the case of SS, they did. So there’s nothing there. Now future generations are paying a tax to sustain a program that shouldn’t exist in the first place.
Like everything the Democrats do it was a lie from the start. It isn’t insurance, it is currently just another welfare program. It will eventually be means tested and God willing, changed for younger Americans.
I don’t know exactly how bad the financial situation is but I tend to say that it is a house of cards. And when it collapses it will bring every country down with it.
The way I see it, the deficit problem is due to uncontrolled spending. A freeze might allow time to cut that spending and get the house in order, while protecting those who stand to lose the most during extreme inflation.
Wage and price controls just produce shortages. They were disastrous in the 1970s. But if you are on a fixed income, then you should be compensated somewhat by the much higher interest rates the central bank will allow to squeeze inflation out of the system. (Assuming that lunatic Bernanke is gone by then and replaced by a Volker-type chairman.) Also, if you’re older, you probably own real estate, which is a good inflation hedge, not that that will help your cash-flow any, but at least not all your assets will be losing value.
Government is not the solution. Government is the problem.
Spending more money than revenue by borrowing it from China or printing it is a gigantic form of government interference in our economy.
Just as with any addict, there will be severe withdrawal pains involved in ceasing the self-destructive behavior. This in no way would justify trying to "help" people who are going to be affected. That's what they are doing now and look where it's got us.
The primary source of wealth in our nation is PRODUCTIVITY. People do things in order to better themselves. They create value that they can trade to others in exchange for other items of value.
From the Great Depression we got an entire generation of people who saved instead of spending. My mother-in-law even saved aluminum plates. She became the way she was because of the pain of having had to work tirelessly for years just in order to stand still.
Most in the U.S. today have no idea that their "entitlements" are being supplied by borrowing from future generations. The bill will be paid in painful ways we can hardly imagine.
Having the government dictate the dollar value of goods and services while printing those same dollars in almost unlimited amounts is about the craziest idea I can imagine.
As for "those of us on fixed incomes", I suggest that you find a way to pursue a variable income. I'm one of those "not-so-illiterate" retired engineers. I paid cash for my two daughters' college educations and my wife and I saved as if there would be no social security.
Nobody should be able to claim that they did not see this coming.