Almost through the weekend
Bookworm on Jul 11 2010 at 5:28 pm | Filed under: Uncategorized
It hasn’t been a bad weekend. It has been a very, very long weekend, and I’m still gearing up for another 5-8 hours of family activities and work. Tomorrow will be a great day! Also, I’m excited by the fact that something I’ve been working on will be published sometime this week. I’m pretty pleased with it, and always get a frisson of pleasure when something I’ve written shows up at another, big website.
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8 Responses to “Almost through the weekend”
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I think this post is an open thread…
From Instapundit, concerning the commission examining our debt:
DEBT IS A CANCER: “The commission leaders said that, at present, federal revenues are fully consumed by just three programs: Social Security, Medicare and Medicaid. ‘The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans — the whole rest of the discretionary budget is being financed by China and other countries,’ Simpson said.”
The only solution is drastic cuts in Social Security, Medicare, and Medicaid, then, until they’re taking up something significantly less than the entirety of federal revenues.
Let’s take a look at Social Security. Where am I wrong in this analysis? Feel free to point out my mistakes…
Some people claim “Don’t you dare touch Social Security in any way! I paid into it and I expect what is mine to come back to me. It’s MY money!”
But that never was the truth and it isn’t the truth now. Consider when the program first started. People at the very beginning of the program received Social Security benefits, but they had not paid into the system. Therefore it is irrefutable: It was not THEIR money then, and it is not YOUR money now.
Social Security was, and is, merely a redistribution program: FROM those who work, TO those who are retired. (They have expanded its beneficiary list beyond just retirees as the years have gone by, as all entitlement programs tend to do.)
Why did it work for so long? Well, in the beginning (if memory on the statistics is correct), there were 14 or 15 workers paying in, for each retiree receiving out.
Today, because we are healthier and living longer, there are only 2 paying in for each 1 receiving. From 15 for 1 at the beginning; down to 2 for 1 now. That is why the program is collapsing. Social Security, as a program and as a system, can no longer work. It is a guaranteed failure.
Since it never was “your money”, what’s to be done? As an interim solution to head off fiscal disaster, why not means test recipients? That may in fact *be* fundamentally unfair.
But it seems much like the debate surrounding illegal immigration. Americans are angrily resisting ANY proposed change to the status of illegal immigration unless the borders are secured first, knowing that the borders will never be secured if it isn’t done first. Because that’s how politicians work. (Or don’t “work”.) And I’d add, by “secure borders”, most of us don’t mean that the border must become so secure that not even an illegal gnat could slip through. We’d be perfectly happy with low-cost solutions that cut the traffic down to 5% of the travesty that is currently occurring.
Similarly, I’d say, interim solutions such as means testing could be considered OK… but ONLY if legislation is enacted first that guarantees that Social Security as a system is ended. Killed legally. Only then should other facets of the solution be enacted… much like “secure the borders first” is a requirement for other illegal immigration considerations, the legal end of Social Security must be enacted as legislation first before I think the program can effectively be modified.
But I don’t think conservatives can propose that until we first beat the numbers into the heads of nearly all Americans. The numbers: 15 workers used to pay for each retiree. Now only 2 workers pay for each. That is why the system is collapsing. It must collapse. Only when the majority of Americans realize this fact, will they be movable on the issue. Without most Americans understanding that knowledge, proposing any real solution to the Social Security debt collapse is political disaster.
Supportive news article for Mike’s comment:
http://www.theglobeandmail.com/report-on-business/the-disintegration-of-the-welfare-state/article1634837/
More bad stuff. Note particularly #29. I’m not sure that it’s the most significant item on a horrible list, but think about it when the news starts talking about all the banks “sitting on their assets” and not loaning money.
http://www.zerohedge.com/article/presenting-wall-worry-50-ugliest-facts-about-us-economy
And then I get pointed to these two articles:
http://www.oftwominds.com/blogjuly10/con-of-decade07-10.html
http://www.oftwominds.com/blogjuly10/con-of-decade-pt2-07-10.html
Assume they’re correct. What next? The question is back to that old “is this a conspiracy?” question…or is it an inevitable path once a certain direction has been taken???
Obviously, the shadow of the future is on my mind this AM…! And for some reason, I’m not alone. Links popping up in all sorts of unexpected places…
http://www.econbrowser.com/archives/2010/07/whos_buying_all.html
SueK’s con of the decade in #4…
I’ve always wondered who owns our nation’s debt. No matter how low the interest rates on it, it’s lucrative, and they have every vested interest (pun intended) to see that debt continue.
>>I’ve always wondered who owns our nation’s debt.>>
You must not have checked out #5 when you did this comment…very interesting graph.
However…another interesting question has come up about “MERS”. I’m not even sure what it is – but apparently, they somehow claim possession of mortgages, but don’t have actual signed contracts/obligations to pay. They buy and sell mortgages, but don’t have original paperwork. In some cases, their foreclosure actions have been thrown out of court. Can’t be happening too often, but what happens then? Does the homeowner own the house? How do they prove it? If they don’t, who does? If the MERS doesn’t have the right to foreclose, does anybody?? After all, somebody sold the mortgage, so they don’t own it. MERS theoretically owns the mortgage, but doesn’t have the paperwork to prove it. So…who gets the house?
SueK,
Yes, I missed that link.
So foreigners own about 45% of the debt.
American government, pension, and financial institutions another 40%.
And home and business interests the other 15%.
It’s always been clear that foreign oil interests have a lot of leverage over us. Now it seems foreign holders of our debt have a lot of leverage as well, and China would definitely be a huge player there. To the extent that they are holding the debt because the interest is good for them, and they believe we’re “good for paying the debt”, OK. But if the debt gets used as a threat or as a club to beat us, not good at all.