A very fair and reasoned post. Really. One of the best I have seen recently. Backed up by fact, reasoned, researched. Thank you.
I have to take issue, however, with the basic premise upon which the framework rests.
"Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government.
It is almost impossible to utter the above phrase with a straight face.
The bonds you speak of are worthless. There is no vault of money.
The bonds have to be repaid by collecting more general revenue taxes, by borrowing the money on top of Obama's soon to be $17,000,000,000,000 in debt, or by having the government spend less (not looking good there).
I must say you gave me a better understanding of the shell game played by Johnson and the Democrats in 1968, but the whole "off budge" three card Monty game does not impress me.
Imagine if you will a global currency collapse. Worldwide. Think Greece times 10. This is what is coming. Do you really think then when we reach that scenario (and we will) that the world will care whether SS was "on budget" or "off budget?" No - the entire US currency and economy will collapse just the same. The main three culprits to our debt are thriving: Social Security, Medicare, Medicaid. Add "Obamcare" to that mix very, very soon.
It is almost impossible to utter the above phrase with a straight face. The bonds you speak of are worthless. There is no vault of money. Using that logic, then all of those holding the $16 trillion US debt should indeed have pause, including the foreigners holding our debt (about 50% of the publicly held debt of $12 trillion.) Any T-bill issued by the USG depends upon the good faith and credit of the USG to pay the interest and principle.
The bonds have to be repaid by collecting more general revenue taxes, by borrowing the money on top of Obama's soon to be $17,000,000,000,000 in debt, or by having the government spend less (not looking good there).
That's the point isn't it? And it is not only repaying the bonds but the debt servicing costs that amount to about $300 billion a year now. If interest rates revert back to their historic norms of 4% or 5%, our debt servicing costs alone will amount to a $1 trillion a year in less than a decade. Imagine how to crank that into the federal budget. And remember that two-thirds of the budget is on automatic pilot. Congress only votes on about a third of it each year.
Imagine if you will a global currency collapse. Worldwide. Think Greece times 10. This is what is coming. Do you really think then when we reach that scenario (and we will) that the world will care whether SS was "on budget" or "off budget?" No - the entire US currency and economy will collapse just the same. The main three culprits to our debt are thriving: Social Security, Medicare, Medicaid. Add "Obamcare" to that mix very, very soon.
There is no doubt that the entitlement programs and other so-called mandatories are the drivers of our debt. And the costs are partly driven by an aging society. By 2030 one out of five residents of this country will be 65 or older as 10,000 people a day retire for the next 20 years. And by 2030 there will be just 2 workers for every retiree.
SS is fairly easy to solve. Medicare is almost impossible. Most people don't realize that the General Fund is funding an increasing share of Medicare--by law. The premiums charged for Medicare Parts B and D pay for only 25% of the costs. By law, the other 75% comes from the General Fund. In 2011 it was $222 billion from the General Fund and those numbers will continue to increase as the aging population increases along with healthcare costs, which are increasing faster than inflation. Medicare Part A has been running in the red since 2008. Hence, the cashing in of the IOUs in the Medicare Trust Fund (HI). Obamacare will increase the HI portion of the payroll tax, but it will only keep the HI Trust Fund alive for another 8 years.
Medicare is another Ponzi scheme along with SS.
This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.
If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.
Imagine if you will a global currency collapse. Worldwide. Think Greece times 10. This is what is coming. Do you really think then when we reach that scenario (and we will) that the world will care whether SS was "on budget" or "off budget?" No - the entire US currency and economy will collapse just the same. The main three culprits to our debt are thriving: Social Security, Medicare, Medicaid. Add "Obamcare" to that mix very, very soon.
I agree. The real question is whether the political will exists to reform these programs and do it in such a way that there not only be cost containment, but rather, changing the trajectory downwards. I am not very sanguine about that happening. Obamacare will just be another out of control entitlement program that will cost much more than originally projected as were Medicare, Medicaid, and SS.
There will have to be rationing of healthcare. The only question is who does it? The government or the insurance companies or the individual. The free market solution is the individual. I have a feeling that once Obamacare wrecks the healthcare delivery system and runs the insurance companies out of business, we will go to a single payer system run by the government, i.e., nationalized healthcare. That was always the objective. Obamacare was just an interim solution on the way to socialism.
This country is now in permanent decline. We will go out slowly but inevitably like so many other great nations and societies. All we are doing now is rearranging the deck chairs on the Titanic.
Don't bet on it. We already have concierge or boutique medical care now.