Skip to comments.Another Fiscal Flop
Posted on 01/03/2013 12:58:56 PM PST by iowamark
Over the course of the 20th century, America built its welfare state. It was, by and large, a great achievement, expanding opportunity and security for millions. Unfortunately, as the population aged and health care costs surged, it became unaffordable.
Public debt as a percentage of gross domestic product was around 38 percent in 1965. It is around 74 percent now. Debt could approach a ruinous 90 percent of G.D.P. in a decade...
By 2025, entitlement spending and debt payments are projected to suck up all federal revenue...
Ultimately, we should blame the American voters. The average Medicare couple pays $109,000 into the program and gets $343,000 in benefits out, according to the Urban Institute. This is $234,000 in free money. Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren. They have decided they like borrowing up to $1 trillion a year for tax credits, disability payments, defense contracts and the rest. They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living. They have made it clear that they will destroy any politician who tries to stop them from cost-shifting in this way.
Most members of Congress are responding efficiently to the popular will. A large number of reactionary Democrats reject any measure to touch Medicare or other entitlement programs...
The events of the past few weeks demonstrate that these political pressures overwhelm the few realists looking for a more ambitious bargain. The country either doesnt know or doesnt care about the burdens we are placing on our children. No coalition of leaders has successfully confronted the voters, and made them heedful of the ruin they are bringing upon the nation.
(Excerpt) Read more at nytimes.com ...
Debt at 74% of GDP? Where does he get that figure?
Every figure I see indicates that the USA’s present $16.4 Trillion in direct liabilities (not including Soc. Sec.) is 103% of GDP.
Every time they trot out these articles, the mention Medicare. It’s not Medicare, it’s MEDICAID, WIC, TANF, Section 8 housing, Social Security Disability for “mental disorders” (referred to in urban areas as “crazy money”), Obamaphones, Pell Grants and the like. Not to mention the gigantic, bloated federal and state bureaucracies that “administer” these programs (which I refer to as “employed welfare”).
Don’t pare them back, ELIMINATE them. And while you’re at it, eliminate minimum wage laws. Then you will find plenty of Americans willing to do the jobs “Americans aren’t willing to do.”
Any you’ll have a balanced budget, too.
This solution to our problems is so obvious as to be self-evident. And it has absolutely no chance of ever happening in our current political and social climate.
Mr. Brooks didn’t you endorse the “crease-in-his-pants” Kenyan and his tax and spend policies?
He’s not counting the “Social Security Trust Fund”.
At the current spending rate, more like two years.
Do your homework.
EVERY Federal program is in trouble.
They all spend too much.
That's David Brooks - alleged Conservative - playing a completely bogus accounting trick.
Brooks pointedly says “Public Debt.”
He doesn't count “Intra-Agency” debt.
That's when various agencies of the Federal Government - like HHS - “borrow” money from the U.S. Treasury or other Federal agencies.
In theory, this is money that the Federal Government “borrows” from itself.
The borrowed money has been SPENT, and HHS, and all the other agencies, have no source of income except the U.S. Treasury.
Medicare is the biggest driver of our debt. It will consume every federal dollar if not reformed.
It is called "Intragovermental Holdings." It contains the HI, SS, and federal trust funds. For example, the SSTF contains $2.7 trillion in non-market interest bearing T-bills. How did the SSTF get the T-bills?
When SS was getting more in revenue that it paid out in benefits, the "surplus" was deposited into the General Fund. In return, Treasury issued T-bills in the amount of the surplus and deposited them into the SSTF. The SSTF represents the good faith and credit of the USG to honor those T-bills in much the same way it honors the T-bills held by the Chinese. Since SS has been running in the red since 2010, i.e., more is being paid out in benefits than in revenue received, some of those T-bills are being cashed in to make up the shortfall.
Intragovernmental Holdings are obligations by the USG, which has borrowed money from SS, HI, and federal pension funds, not the other way around.
I stand corrected.
A very clear explanation.
my mil did not work, did not contribute to SS or medicare except for about 2 yrs...
my fil has been retired for nearly 30 yrs....
both have had multiple big surgeries, spent time in a nursing home, take multiple meds and have had countless mri's and ct's for aches and pains....throw in many rounds of physyical therapy....
seeing as SS was once just a pittance, the amt they have "paid" in is miniscule and almost sacriligeous to what my husband and I have paid it, and we're still working....
oh, and I have "disabled" sil/bil with bil on the take for about 20 yrs now....
the takers have really stolen the golden goose....
not that I want anyone to die, but I don't run to the dr for every little pain, and I don't take multiple pain meds for my bad back and knees nor feel I need to get on abx for every sniffle....but this is exactly what my inlaws do....because they're not paying....
Apparently the biggest reasons for our debt are: the Military (going back to the 1930s, and I'm not kidding), the Republicans, and the vast number of super wealthy; entertainers and athletes who wear $100K watches.
Yes folks, these people are American citizens who actually believe this crap.
I’ll bet Brooks is not discounting the cash flow in and out for inflation.
Ultimately, we should blame the American voters.
Really? We just had a year of listening to con man telling the voters they have a right to all trhis largesse from DC.
He told them they could have whatever they wanted if the rich would just pay a little more.
It was the rag this clown works for that let the grifter get away with the lies
It is the “american voter” who pays nothing in taxes that is willing to bankrupt the producers children.
I can foresee a future where our grandchildren are lining up old people against the wall and shooting them.
I’m surprised this editorial was EVEN IN the NY Slimes.