Posted on 03/05/2011 9:27:06 AM PST by Libloather
[[Nice post rigelkentaurus. This is directed to some of you (you know who your are), background for others]]
Lively debate here.
Let’s get a few FACTS on the table here:
The federal government is BROKE. It has an ‘income’ of about $2.5T, ‘expenses’ of $3.5T to $4.0T per year (as far as the eye can see) and a debt of $14T.
To put this in more understandable numbers, using the same ratios, you have a family bringing in $100,000 per year, with a debt of $560,000, and expenses of $140,000 to $160,000 EVERY YEAR. But you’re lucky, you have several banks that still think that you will somehow pay back this money, so they’re willing, for now, to keep the credit line open and let you add your $40,000 to $60,000 to your debt...FOR THE TIME BEING, and are keeping the interest rate law.
But the banks are telling you to stop adding to your debt, and hopefully pay it down...but instead you give them the finger. You say: “I still want to take my European holiday EVERY YEAR, and I will do so”.
Eventually the banks get nervous...the first bank that demands repayment is first in line to get it, so they are very tempted to take the plunge, and one of them does so. You are forced into BANKRUPCY (i.e., the dollar dies)...and it’s GAME OVER for your lifestyle. Forget about getting any more credit...and your income drops too, as the money simply no longer comes in either. You are finished.
So what can you do to stave off this outcome? Easy, show that you are serious about reducing your debt. You can show it one of two ways (or a combination of both):
1) Increase your income by taking a second job (for the government that means HUGE tax increases to bring taxes up to European levels, such as $5 per gallon for gasoline, a Value Added Tax of at least 10%, and serious increases in Income Taxes, particularly on the middle class, since that is where the money is). By doing so, you are demonstrating that you SERIOUS about reducing debt...and you may even be able to keep most of your overpriced lifestyle.
2) Reduce your expenses by foregoing the cruise, no more eating out, no more vacations, etc. (for the government that means MAJOR cuts in spending, and that means ENTITLEMENTS…BIG TIME).
That’s about it. Well, let’s see, half of the people here at this conservative site REFUSE to have the government get serious about reducing its expenses (yea, I know, reducing government expenses is fine, as long as it doesn’t affect me - that means NOTHING gets reduced - since NO ONE is willing to give up ANYTHING). That leaves open Option 1, which are the HUGE tax increases. And I certainly don’t see any support for that option.
So WE ARE TOAST. We are stalemated. We cannot do ANYTHING substantial to reduce the debt or even cut back on the deficit, so we will get our credit line pulled, and the day that happens, the dollar dies, and the US instantly becomes a Third World nation.
What does it mean to have the dollar die. It means that prices will likely triple for EVERYTHING imported (including fuel). Anything that relies on imports, or fuel (i.e., everything), will also see huge price rises, probably doubling to tripling also. This essentially wipes most of the value of 401k’s, pensions, and yes, those PRECIOUS Social Security checks that you demanded not be touched, will become WORTHLESS. Needless to say, don’t expect much in the way of salary increases also. This is what happened in Russia and in Argentina and there is NO REASON to believe it will not happen here, and SOON.
As your children and grandchildren ask questions as to why they have to live in country a bit poorer than Mexico or Bolivia, I will be sure to mention your DEMANDS that Social Security (and other entitlements) not be touched - you got your way, and you left the country ABSOLUTELY TRASHED.
(by the way, I’ve ‘paid in’ to Social Security myself for over 30 years, but I believed it when I was told in the early 1980s the money was being spent as it came in…and it was right there in the government books – so I’ve NEVER expected a penny of it back)
So have a nice day. Hopefully enough of us will still have enough discretionary spending to stay on the Internet when this is done…so that I can hear all the old people YELLING: “Why didn’t you tell me back then, I would have sacrificed too”, as their grandkids get skinnier and skinnier…
It’s no longer simply cutting Social Security - we’re long past that option...it’s whether we have a nation or not in, probably, less than 5 years.
Actually Doc, the USSC has ruled on Social Security, it is not “set aside” money, but taxes just like every other thing the govt takes away. They owe you nothing, and if you get anything it will be from the pocketbooks of your children or grandchildren as they earn. I know you know that SS is a Ponzi scheme. We as reluctant participants in this scheme are owed exactly what the people are owed from Madoff. The pleasure of seeing those that foisted this upon us rot in jail. There is just about as much chance of that happening as the US Govt surviving on a trillion dollars in interest payments yearly. Of course borrowed to pay off our “bankers” the Federal Reserve, and Treasury Bond holders worldwide.
The Supreme Court and the evolution of Social Security The Supreme Court has established that no one has any legal right to Social Security benefits. The Court decided, in Flemming v. Nestor (1960), that "entitlement to Social Security benefits is not a contractual right". In that case, Ephram Nestor, a Bulgarian immigrant to the United States who made contributions for covered wages for the statutorily required "quarters of coverage" was nonetheless denied benefits after being deported in 1956 for being a member of the Communist party. The case specifically held: 2. A person covered by the Social Security Act has not such a right in old-age benefit payments as would make every defeasance of "accrued" interests violative of the Due Process Clause of the Fifth Amendment. Pp. 608-611. (a) The noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. Pp. 608-610. (b) To engraft upon the Social Security System a concept of "accrued property rights" would deprive it of the flexibility and [363 U.S. 603, 604] boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act. Pp. 610-611. 3. Section 202 (n) of the Act cannot be condemned as so lacking in rational justification as to offend due process. Pp. 611-612. 4. Termination of appellee's benefits under 202 (n) does not amount to punishing him without a trial, in violation of Art. III, 2, cl. 3, of the Constitution or the Sixth Amendment; nor is 202 (n) a bill of attainder or ex post facto law, since its purpose is not punitive. Pp. 612-621.[65] The Supreme Court was also responsible for major changes in Social Security. Many of these cases were pivotal in changing the assumptions about differences in wage earning among men and women in the Social Security system.[59] * Goldberg v. Kelly (1970): The Supreme Court ruled that the due process clause of the Fourteenth Amendment required there to be an evidentiary hearing before a recipient can be deprived of government benefits.[28] * Weinberger v. Wiesenfeld (1975): A widower claimed that he was entitled to his deceased wife’s benefit, even though he had not been dependent on his wife. The court upheld his claims, stating that automatically granting widows the benefits and denying them to widowers violated equal protection in the Fourteenth Amendment.[60
Gee, Boner...you're up for re-election in 2012, aren't you?
Well you did a lot of bloviating.
What are your suggestions to reduce these “entitlements” which were taken out of my paycheck and matched by my employer for 30 years.
My husband and I bring in $3,000 a month in Soc. Sec. We’re not poor, but we’re not rich.
How much of this should we take a reduction for? come on, give me a number, don’t pontificate and make us look small and petty. I’ve argued enough that I’ve paid, and had my employer match, my paycheck deduct of 6.2 over the years that this amount of monthly deduct should handily be there for me.
$36,000 a year we get. We get along. We haven’t had a raise in two years but I don’t see any old geezers out rioting in the streets.
So how much of this $36,000 a year should husband and I give up? and would taking a thousand a month from us, for example, really help solve the problem of these “entitlements” paid for by a 6.2% deduct of our paychecks for 40 plus years and matched by our employers that are so wrecking this country?
Money that the politicians spent I would add.
If husband and I give up $1,000 a month...bringing our annual ss income down to $24,000 a year, will that solve the problem?
Not that we’d be able to buy much gas should it stay at, say $3.00 a gallon, or we’d be able to put much into the economy but I’m willing to do my bit for the country.
Though I still say what we have here is the realization that the politicos have SPENT this money over the years that they pass laws forbidding banks and 401K trustees to do but hey, by all means, beat on the piddly boos making $35,000 a year...yeah, that’s the ticket.
Whatever you do, don’t blame the ones who caused the problem.
OK. You consider SS welfare then. Thanks for playing...good night. You sure did waste a lot of time proving it, though
So if we do away with Social Security and Medicare, everything becomes just wonderful and we live happily ever after?
The United States of America was such a wonderful country pre-WWII, I’d rather go back to the good old days. /s
Life in 1913 was wonderful, and it was even better in 1934.
Let me insert here, as I talk to myself, that I am NOT in any referring to Medicare.
Medicare is a real problem, even though I contributed 1.65% of my salary, MATCHED by my employer, over my many years of work and, if the money had been held, invested properly, not spent for Public TV’s Sesame Street, for example, there should be enough.
BUT the cost of health care for seniors probably does, over their longer life times, exceed what they contributed over the years even including that employer match everybody seems to forget.
Part of the reason Medicare was even created was because it’s when you get old that you need health care the most and it’s when it is, obviously, the most expensive.
I’d be the first to wave the white flag and say that most seniors will probably cost more in their elder years via Medicare than they paid in. Even if the politicos hadn’t spent it and if had been invested properly. The cost of health care has skyrocketed, due to better medical care, longer life spans, but let’s not forget the lawyers caused a lot of this.
I’d be fine with a “voucher” system myself. Give me a monthly amount to be applied to a health care purchase and let the free market do the rest.
I daresay that the private insurers would straighten out the medical system, they’d get at the fraud....I bet if seniors could just use a voucher to buy medical care...I’d bet it would work.
They’ll never do it. The politicos never gives up power once the get it.
So you paid in and never expected a penny back. How nice of you. Well I don’t think it is okay for them to steal, yes steal from me, for all those years and then just say never mind.
They can start talking about cutting social security AFTER they take all the crap programs, waste and welfare out of the system. Til then screw em, I want my money they stole from me.
Actually it took only minutes, and it doesn’t matter what I consider SS to be. It only matters what our “leaders” rule it to be.
“I want my money they stole from me.”
You will NEVER get it. What you will get, due to your refusal to accept the fact that you money has already been spent, is a bankrupt country that will still give you checks, but they will be worthless.
That IS the future unless we quickly take action...but we will not, so don’t fret it, you can watch the country crash along with the rest of us. You will “get your money (or really my kid’s money)”, as you demand...but it will be WORTHLESS.
And, no doubt, your kids will appreciate the country you left to them.
“What are your suggestions to reduce these “entitlements” which were taken out of my paycheck and matched by my employer for 30 years.
“Though I still say what we have here is the realization that the politicos have SPENT this money over the years”
You seem to understand that the money was spent (which is more than I can say for half the people I work with) - so that money is long gone.
And so the question really becomes what is it we want to do collectively, as a country, to take care of elderly people? It seems to me we DEFINITELY do not want to pay the necessary level of taxes - so then what? We could let them starve if they don’t have any other income, but I don’t think we want to do that either.
Seems to me that the best thing to do is assure that everyone has some level of income where they can live reasonably well...and that’s it. If that income comes from pensions and 401k’s so be it. If it comes from the direct descendants of the elderly (i.e., there children and grand children), I have no problem with that (that’s how things were done for the first 4920 years of recorded human history).
But it’s time for all of us to forget what we paid in. Like I said, I’ve paid in over 30 years, many of them at or near the limit...I know it was simply another INCOME TAX, since the money was NOT being set aside for me. So I have no problem going to a system that we can afford and still not throw the elderly on to the street.
“So if we do away with Social Security and Medicare, everything becomes just wonderful and we live happily ever after?”
Yes - wipes out the deficit. The other option is to increase taxes enough to PAY FOR THEM.
Other options include crashing the dollar or defaulting on our debt. In either case, whatever little amount of dollars people now get will be worth next to nothing, after those types of events.
Boehner makes me nervous. He should not be doing anything that makes Obama look good. Just do the right thing and cut spending.
I may have to take up smoking. /s
The loss of revenue from the loss of payroll taxes will severly disrupt a lot of the social schemes now being funded fradulently. So no more SS payments means no more SS taxes. Problem solved. But the bastids in Congress treat the SS money as a slush fund; think they want to be deprived of that? No. Those of us who could see the light some decades ago may have put away some personal retirement funds, so we may have to live a little simply, or we may have to sell our homes because property taxes are too damn high. I figure the next things the criminals in Congress will do is to nationalize all 401k's and IRA's - just like in Argentina.
I wonder what a modern civil war will look like?
I don't get that feeling at all. I think most of us here want to see gov't spending cut. Indeed, I think the President could come out and say: "As of today, by Executive Order, every agency now has 10% less to spend than it did yesterday. I expect you to perform at no worse than 90% of your previous service/payment levels. If you cannot do that, I will find someone who can. Have a nice day."
Too many people see something as "all or nothing", but cuts don't have to be that way. Better to pare everything back a little than totally cut some programs. That way, all segments bear the burden. Doing it that way would also mute the "you-gutted-my-program-but-not-his-program" arguments that would surely follow any other approach. While there are programs I don't feel should exist at all, this approach would be politically easier.
As to not expecting anything from SS, I never felt that way. That's an obligation no less legitimate than a US bond or other gov't-backed obligation.
I also think this finance problem can be fixed. But it's going to take a shift in political will and that has to be driven by people like us.
“As to not expecting anything from SS, I never felt that way. That’s an obligation no less legitimate than a US bond or other gov’t-backed obligation.
I also think this finance problem can be fixed. But it’s going to take a shift in political will and that has to be driven by people like us. “
I hear you, and what you say is certainly reasonable, but the problem is that the numbers cannot add up, regardless of how much the government tries to clean things up - without entitlement reform (or large new taxes), as there are limits as to what can be done. For example, Social Security personnel expenses are something like 5% (or less) of total expenses (the rest being payouts) - so you could double the productivity of the workers, and barely notice any change. The cost of the program is almost completely driven by the payout level and the number of recipients - and the number of recipients is in the process of skyrocketing. Either you bring in more money, or Social Security adds to the debt, in larger and larger numbers.
Other programs have a lot more room for improvement...but as much as people have tried over the past 2500 years to get government working efficiently, without fraud and waste, there are limits. Our founders knew that, and tried as hard as they could to keep government from getting in the middle of everything...but FDR, and then LBJ managed to figure out a way to do just that.
This chart shows pretty much where the money is being spent:
You can see the big line items are:
1) Interest on the debt
2) Defense
3) Health and Welfare (including Medicare)
4) Social Security
Of these items, the first one cannot be touched, unless we decide to default...and once confidence is lost in our credit (any day now, in my opinion), this number will skyrocket. The second item can, maybe, be lowered a bit. Most of it is for personnel costs (i.e., soldiers) - but lower it too much (which is probably happening anyway), and you walk right into World War 3...history has proven that over and over. The third one is about 2/3’s Medicare, whose cost should be lumped into Social Security when discussing reforms.
So, the numbers from above come out to $2.76T for those 4 items. Of them, interest rates are the wild card...they only stay low as long as people believe we’ll get our budget in line. Social Security and Medicare (about half of the above number) will grow...and grow...and grow due to the Baby Boomers retiring (you can see the nice, steady, climb of SS in just 4 years - that climb gets steeper with the baby boomers kicking in - medicare is actually growing more steeply but is buried in the HHS line). Defense probably won’t change much - it certainly will not grow much, and if it shrinks much we’ll regret that even more.
So with Social Security and Medicare being about $1.4T and growing...it is the growth area of spending and will ensure huge deficits for the foreseeable future.
All of the other spending on the chart (albiet, much of it, probably most of it, wasteful) comes out to around $800B. You can wipe it all out overnight, and we still have a decent sized deficit...but some of that money cannot (or should not) be lowered much, as it funds nuclear weapons and functions that are clearly constitutional (like border security, federal courts, etc.)
So the bottom line, again, is either we figure out a way to get the Middle Class to pay twice as much in taxes, or we default and watch ourselves turn Third World overnight...or we cut entitlements.
Personally, I’m convinced we will default...just based on the what I hear on this forum...from people who are much better educated than most Americans, but still cannot (or will not) comprehend what is ahead.
I knew in 2006 that the banks had to go broke, watching them lose something like $250,000 from each foreclosure in California (now even more), and maybe $150,000 each from each foreclosure in Nevada, Arizona, and Florida. Banks don’t make that kind of money off loans, not even close, they had to go broke (and I made a decent amount of money shorting financials by doing that math). Same thing here...only ways out are taxes or default...and taxes don’t look to be moving up...so it’s default. That simple.
Neither Social Security nor Medicare can be saved. They are both broken and irrepairable socialistic institutions.
The only possible ‘solution’ is to face this cold hard fact and realize that any attempts to ‘fix’ these Commie programs will merely kick the ‘can of worms’ on down the road.
They shall both ultimately collapse without doubt and prove to be much harder to replace with viable alternatives in later years.
What we need, as a nation, is a viable plan to phase-out these vote whorehouses with a free market solution. The phase out process could take 50 years, but we must get on a viable path.
Most seniors will get something out of these frauds, but it’s my children and grand children which drive my entire logic and thought processes.
Today’s seniors are both the victims and beneficiaries of Social Security and Medicare. But let’s get beyond ‘us’ seniors and think of the innocent faces of our descendants, who shall be victims instead of beneficiaries.
I’m ashamed to say that mamma and I are forced to both kick the slop jar and eat soup from it too!
Your proposing going back in time to the good old days of 1900 - 1945.
Stay away from the paint chips.
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