Posted on 01/14/2013 4:50:06 AM PST by Kaslin
I have a serious question for readers. What’s worse, bailouts for government or bailouts for the private sector?
Yes, both are bad, but is it worse to bail out a bankrupt entitlement program, such as Social Security, or it is worse to bail out an industry, such as the financial sector?
To bail out the housing sector, or to bail out Medicare? Fannie and Freddie, or GM and Chrysler?
All these examples involve huge amounts of money, and both private-sector and public-sector bailouts have perverse long-run effects, but which is worse?
And don’t forget there are lots of other bailouts in our future, as discussed on this interview for Fox Business News.
The interview took place before Christmas, but the topic is even more relevant today since the budget season is about to begin.
Most of the discussion was about government agencies and programs that may get more handouts, though bailouts for the Federal Housing Administration and the Pension Benefit Guaranty Corporation would be indirect bailouts for big business and housing.
So we’d get the worst of all worlds, more government spending and more cronyism.
Or, as they call it in Washington, a win-win situation.
But I call it legal corruption.
Every so often, I try to appeal to statists by explaining to them that it’s not in their self interest to steal too much.
Why? Because if you kill off the geese that lay the golden eggs, what will you do tomorrow when nobody is left to produce?
Heck, even the former leftist President of Brazil understood that there can’t be any redistribution if there’s no production.
I’ve made this point by sharing a very clever cartoon. I’ve made this point on television. And I’ve tried to explain it using simple analysis.
I’m not sure I’ve been overly successful, but perhaps this Chuck Asay cartoon will help get the point across.
The cartoon is akin to the fable of the ant and the grasshopper. But the “modern” version of the story, featuring coerced redistribution that causes the ant to no longer be productive.
Heck, it’s also what we see in the PC version of The Little Red Hen. And the same theme can be found in the amusing anecdote that uses beer to explain the corrosive impact of a “progressive” tax system.
The moral of the story – in every case – is that you shouldn’t be too greedy if you’re living off others.
In my speeches, I often joke that a tick or a flea is in trouble if it’s feasting on a dog that dies. Well, on a more serious note, this can happen to countries. Greece is in deep trouble because there are too many people riding in the wagon and not enough people pulling the wagon.
We’re not there yet, but I don’t like the trend.
“I have been complaining for over 35 years and my voting record and constant barrage of communication to my elected officials reflects it, sadly I and many others were ignored for the “greater good”.”
At age 11 my father explained to me how this would happen to SS. I understood.
Unfortunately, we who lived without expectation of government support will be greeted with the same callous disregard as those who “need” “their” check.
“No one who has paid into the system is a ‘moocher’.”
What if you take more out than you put in?
“The people who have paid in to SS had no control over their money being taken. They were all victims of a vast Ponzi scheme with no choice other than to leave the country.”
Really? Just helpless victims? Couldn’t vote to change that system or rebel to get rid of it? Just kick the can down the road?
I am well aware of how it all works, thank you.
While I agree with your assertions, berating oneself and feeling guilty over the Ponzai scheme instituted by the feral federal government GENERATIONS before most of us were even born and in which our 'voluntary' participation is forced by legal intimidation, is, IMHO, a totally non-productive endeavor.
Unless you're just into self-flagellation.
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The lecture on your part may have been with the best intentions, but in the interest of putting-your-money-where-your-mouth-is......
What would be your solution to them problem of a system you can't get rid of yet are forced to contribute to? Pay into they system but never collect from it?
” The lecture on your part may have been with the best intentions, but in the interest of putting-your-money-where-your-mouth-is......
What would be your solution to them problem of a system you can’t get rid of yet are forced to contribute to? Pay into they system but never collect from it? “
First of all, the “system” is not a “system” it’s a tax that’s called something else but it’s just a tax.
The solution I prefer is that we pare down all the expenses of government and entitlements until we no longer spend more than we have - and then some so that we start paying off the debt.
That is ultimately the only reasonable solution. But government is not reasonable. The solution Government has in store for us will take one of two forms: 1. Default on Debt, or 2. Hyperinflate. Either of those will be a defacto end to “benefits as we know them”
This is not about resentment, or self-flagellation, or feeling guilty. It’s about numbers that don’t add up - and coldly and cruelly set expectations towards reality.
So I’m not really lecturing per se, I’m stating facts as I see them - they may not be exactly correct, but one may not always guess the exact size of the tsunami before it engulfs you - but that doesn’t mean it isn’t in front of us
So what’s your solution, other than restating the problem again?
LOL! With the creative government bookkeeping, how would we even know?
My statement was directed at those who feel guilt over taking from a system they were forced to contribute to, not to imply that I had all the answers to equalize an inherently inequitable system.
***I am now being called a “Moocher”****
The SS program was set up to be self sufficient. Here is what was said back in 1964.
http://www.ssa.gov/history/ssa/usa1964-2.html
Self-Supporting
“The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite future—without any subsidy from the general funds of the Government.
Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.”
And here is where the money went. Read and weep.
http://www.socialsecurity.gov/OACT/ProgData/fundFAQ.html#n4
Which I am aware of.... but that wasn't the question I asked.
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The solution I prefer is that we pare down all the expenses of government and entitlements until we no longer spend more than we have - and then some so that we start paying off the debt.
Again, I agree and see the problem as you do.
While the long-term [and preferable] solution would be to get the government OUT of the charity business, I wasn't speaking of what should happen or may happen, but what IS happening.
Since government obviously WILL NOT restrain itself and manages to either publicly vilify or legally punish anyone who even attempts TO restrain it.....
I say anyone who 'contributed' into it should feel NO GUILT from taking from it.
And may we all continue to do so until the entire thing collapses under its own putrid weight.
The 2 biggest parasites of all in the USA are Michelle & Barack Obama.
They've been taking MY money for 45 years.
Once that stops, we'll talk about how to deal with past politicians corruption - like selling off the vast territories that fedgov owns.
It appears to be that those of us who've paid just suck it up, while illegals, baby mommas, baby daddies, SSI fakers, etc., continue on the gravy train.
F*** that !
“If You’re a Moocher, Common Sense Should Tell You Not to Kill all the Producers…”
This presumes the moochers have something called “common sense”.
They don’t.
The American public was sold a Ponzi scheme. How exactly would you expect private citizens to "rise up" when most Americans for many decades thought it was a good idea? Do you want the retirees of today to pay for the sins of the previous generations?
“this is my starting point. What do you think?”
Doesn’t matter what you think, it will go nowhere.
It should be obvious to anyone in this forum who does think, that the problems of programs like Social Security, Medicare, etc. will NEVER be “fixed” until the system has collapsed and the payments literally stop being paid.
Then, and ONLY then, will there be the realization by both those who receive the benefits and by those who determine how they will be distributed (elected officials) that the system must be “fixed”.
And then, and ONLY then, will it be.
Even a week before “collapse day zero”, the politicians of both parties will still be conniving and concocting schemes to prop the old system up and keep it going just a little longer. It’s they way they work, it’s ingrained into their political consciousness, and they won’t confront reality until reality confronts them...
But if we start things now with younger workers, we can lessen the burden for future generations. Every long journey begins with one small step.
“We can’t even convince people who are otherwise open to debate here on FR that we are broke...”
The reality is that we are NOT “broke” — not yet.
We will be “broke” the day that the EBT cards aren’t refilled, the day that the Social Security deposits don’t show up in folks’ bank accounts, the day that doctors stop receiving payment for their Medicare bills.
That day will have to actually arrive, before the folks and politicians realize that we are, indeed, broke — when there is no money left to actually PAY into the deposits and nowhere from which to get more.
Then, and ONLY then, will the politicians do what is necessary to address the situation.
Until “crash day zero” is here they’ll essentially do nothing.
This a train that must wreck before the tracks can be rebuilt and a new train placed upon them.
Not that I would call someone expecting their monthly Social Security check a “moocher”, but do you really believe there’s a 1-to-1 ratio between what you will receive versus what you paid in?”””
Most people paid in 6.2 % for their social security from their Gross wages & earnings. In the past 2 years, Obama dropped that intake by 2 % and the fund has been operating as a loss for that time period. It was never a good idea to have that 2% ‘vacation’ on the SS taxes.
MANY of US paid in 12.4 % because we were self-employed and paid both halves of the tax.
Furthermore, million have paid in since they first started working, died before they turned 62 or 65 and therefore, got NO SS.
WE PAID into the system what we were demanded to do. IF the DEMOCRATS had left that money alone, the actuarial increases along with those who died before collecting any benefits, would have left a healthy fund for our futures.
Instead, the DEMOCRATS have been emptying that fund since the early 60’s—especially to provide welfare to the millions of those who refuse to do anything more than procreate more mouths to feed. Under that scenario, the fund will never be self-sufficient. The DEMOCRATS have done this and they wish to continue doing so.
It is like have a marriage where one spouse keeps putting money into their joint bank account and the shopaholic other spouse keeps writing checks and spending. They can never become solvent.
There will never be any serious changes in the handling of the SS funding until the Republicans hold all the branches of the USA government.
“But if you want to jerk the rug out from people....”
I don’t want to do anything. What happens will happen not because of me. It will happen because we don’t have the money.
It’s unpleasant to think about, but it is there nonetheless.
“I’ll accept your argument “
It’s not an argument. You can choose to or not to accept facts, but they will still be there despite what you choose.
If you’re a moocher you have no concept of cumulative results (for lack of a better term this morning) of your mooching. The companies, like mine, which each exported good American jobs to Bangalore and each laid off their American employees, because that was the trend, didn’t and do not admit their actions had any effect on the U.S. economy, because after all each of them laid off a small number, exported a small number of jobs. But devil is always in small details, in small things.
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