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Guest Post: The Promises That Cannot Be Kept
Submitted by Charles Hugh Smith from Of Two Minds
The Promises That Cannot Be Kept
The government's promises, for pensions and healthcare and everything else, cannot be kept. We as a nation will eventually have to have a truthful conversation about that reality.
The fact that the Federal government cannot possibly fund the entitlement/ benefit programs that have been promised to the citizenry is well-known, but remarkably unwelcome. I have addressed this difficult reality dozens of times, as have hundreds of other commentators, for example:
To Fix Social Security, First Ask Why It Is Deep in the Red (January 18, 2011)
Is the Recovery "Self-Sustaining"? Here's a Test (March 22, 2011)
If You Want Solutions, First Pin Down Where the Money Is Going (May 23, 2011)
Bruce Krasting recently penned a wonderful evocation of the bitter "I, Me, Mine" rage this reality triggers in Americans: I go to a 4th of July party (Zero Hedge).
The typical reaction is either denial, mixed with wishful thinking--if only we taxed the rich and cut out war spending, everything could easily be funded indefinitely--or rage against anything and everyone that threatens the individual's own share of the swag.
Krasting brilliantly depicts the net result, which I call internecine conflict between protected fiefdoms in Survival+: the constituency of each fiefdom--Social Security, Medicare, Defense, etc.-- will undermine the other fiefdoms to maintain their slice of the dwindling Federal pie. This leads to a profound political disunity which cannot be overcome with compromises, as that would require deep cuts in all government programs.
None of this is new. Richard W. Fisher of the Dallas Federal Reserve laid it all out very succinctly back in May 2008, before the global financial meltdown. Now of course, the situation is much worse: Social Security is already deeply in the red, for example, a condition that wasn't supposed to occur until 2017. If we removed Federal and Federal Reserve stimulus, the economy would immediately contract 11%.
The entire notion of entitlements based on age requires an ever-expanding population of working contributors and an ever-expanding economy. If either condition isn't met, then the programs fail. Fisher's message is clear: our entitlement programs will fail because there is no way to raise $100 trillion in additional taxes in a declining economy.
Please sit tight while I walk you through the math of Medicare. As you may know, the program comes in three parts: Medicare Part A, which covers hospital stays; Medicare B, which covers doctor visits; and Medicare D, the drug benefit that went into effect just 29 months ago. The infinite-horizon present discounted value of the unfunded liability for Medicare A is $34.4 trillion. The unfunded liability of Medicare B is an additional $34 trillion. The shortfall for Medicare D adds another $17.2 trillion. The total? If you wanted to cover the unfunded liability of all three programs today, you would be stuck with an $85.6 trillion bill. That is more than six times as large as the bill for Social Security. It is more than six times the annual output of the entire U.S. economy.
I want to remind you that I am only talking about the unfunded portions of Social Security and Medicare. It is what the current payment scheme of Social Security payroll taxes, Medicare payroll taxes, membership fees for Medicare B, copays, deductibles and all other revenue currently channeled to our entitlement system will not cover under current rules. These existing revenue streams must remain in place in perpetuity to handle the “funded” entitlement liabilities. Reduce or eliminate this income and the unfunded liability grows. Increase benefits and the liability grows as well.
To solve the entitlement deficit problem, discretionary spending would have to be reduced by 97 percent not only for our generation, but for our children and their children and every generation of children to come. And similarly on the taxation side, income tax revenue would have to rise 68 percent and remain that high forever. Remember, though, I said tax revenue, not tax rates. Who knows how much individual and corporate tax rates would have to change to increase revenue by 68 percent?
For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact.
Though I've addressed this many times before, let's walk through it one more time. Let's start with the income side of the ledger, Total Personal Income in the U.S.:
Total personal income is defined by the United States' Bureau of Economic Analysis as income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments. It is the sum of compensation of employees (received), supplements to wages and salaries, proprietors' income with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj), rental income of persons with CCAdj, personal income receipts on assets, and personal current transfer receipts, less contributions for government social insurance.
In other words, total personal income includes all the entitlement spending and government benefits such as extended unemployment, Section 8 housing, etc. As Mish recently explained, personal transfers now eat up all Federal tax revenues: $2.4 trillion in, $2.4 trillion mailed out.
If we set aside our own fond hopes for Social Security checks being deposited into our personal accounts and Medicare to survive long enough to pay for our own care, we conclude this is a staggering imbalance. The promised programs are already consuming every dollar the government collects, and the Baby Boom has barely begun to retire.
Perhaps a few million of the 76 million Boomer generation has started collecting Social Security, and the first Boomers, born in 1946, are just now qualifying for Medicare. That these programs have already expanded to the point that they consume all revenues should give pause to anyone still in the denial or rage stage of the denial/anger/grief/resignation/acceptance cycle.
Earned Income is flat to down. Here is a chart of total income:
There are two components of income: wages and non-labor, which includes dividends, interest, capital gains, rental income, and other investment income.
Charts: Conerly Consulting
The handsome rebound in Corporate America's profits--roughly 11% of the entire GDP at $1.6 trillion--and the Fed-engineered "permanent rally" in stocks has goosed non-labor income for the top 10% who own these income streams, but it has also bolstered the pension funds that millions of state and local government retirees depend on. (When the stock and bond markets implode, so will all those pension funds' promises.)
Personal income has "recovered" only as a result of greatly increased Federal transfer payments. If we subtract all those government transfer payments, income has cratered:
Government transfers now account for 22% of household income, an unprecedented dependence on Central State checks and benefits:
Click on chart for full-sized chart in a new browser window.
Employment is down and is not recovering. I have addressed why many times, what author Jeremy Rifkin termed "the end of work." So any projections based on a rapidly growing workforce are not reality-based.
All the "growth" of the past decade was simply borrowed, as our private and public debt has soared. If you borrow cash from your credit card and spend it, is that really "income"? No. Here is the national "credit card" account. Does that look sustainable?
Notice how much of the decade's income was equity extraction during the housing bubble. That source of borrow-and-spend is gone.
Many readers suggest that cutting Defense and raising taxes on the wealthy will preserve these entitlement programs. Unfortunately the math doesn't pencil out, for the reason noted above: when expenses are rising by 6% to 11% a year, every year, and your income remains flat to down, then in a very few years, those expenses will eat up your entire income.
But let's do the math. Let's knock a third out of the Defense budget of around $730 billion, saving $250 billion a year. (Never mind the fierce fight that fiefdom would put up.) Let's increase taxes on the super-wealthy (good luck getting them to pay it) and the plain old wealthy and you might raise $500 billion more a year.
That is questionable for a number of reasons, most saliently that the wealthy already pay most of the Federal income tax, which is quite progressive on earned income: The Problem with "Tax The Rich": It Won't Work (May 28, 2010).
The top 5% earn about 22% of the income, and they pay about 60% of Federal taxes. As many readers have pointed out, the total tax burden, including sales tax, property tax, etc. is heavier on lower-income workers as a percentage of income than it is on the super-wealthy (top 1%), who pay around 17% of income in taxes. But no matter how you slice the data, the fact remains that the top 5% already pay a hefty percentage of earned income in taxes, and they also pony up 60% of all Federal income taxes.
The top 1% could certainly stand to pay more than 17%, but the problem there is that capital is mobile now and anyone paying taxes on their global income in, say, Switzerland, cannot be made to pay taxes elsewhere on that same income. (Income and corporate taxes are low in Switzerland compared to the U.S. and Europe.)
We can rail against this reality, but capital will flow to the highest returns and lowest tax rates. We should impose the same tax rate on non-labor as we do on labor, and that would raise a a few hundred billion more a year. But let's also recall that the Federal government is borrowing $1.6 trillion each and every year, fully 11% of the nation's GDP and 40% of Federal spending, so even $500 billion more simply isn't going to rectify the budget shortfall or long-term situation.
Studies have found that taxes are remarkably stable at about 20% of GDP. It seems that attempts to raise taxes above that share of the economy trigger blowback in the form of tax avoidance, capital flight, voluntary reductions in income, etc.
But let's say you do manage to strip out $250 billion annually from Defense and Homeland Security/War on Global Terror (GWOT), and boost tax revenues by $500 billion a year (a 21% increase in total tax revenues). Together, that would generate $750 billion annually, or $15 trillion over 20 years.
I haven't found any firm estimates of the unfunded liabilities due in the next 20 years, but since 25% of the entire population (the Baby Boomers) will be retired and drawing on Social Security and Medicare within 15 years, I think we can reckon that about half that $106 trillion will come due in the next 20 years--and that is probably absurdly conservative.
$15 trillion down, $35 trillion to go. Do you see how utterly hopeless this exercise is when Federal spending rises by 6.5% every year even as the underlying economy muddles along at 2% in good years and -5% in poor years, if we subtract borrow-and-spend deficit financing?
In other words, $100 trillion in unfunded liabilities is the number now, but if spending continues rising at triple the rate of the real economy, then that number will only grow.
If we're honest about our accounting, then the U.S. economy hasn't grown at all since 2008; it's shrunk by $6 trillion, a sum we have masked by borrowing and spending $6 trillion in Federal debt, money that replaced the decline of private borrowing and spending.
Please look at the charts of healthcare and local government pension and healthcare costs again. Those rocket-launch lines shooting higher cannot be funded by a national income that is flat or declining.
We need a national conversation about reality, not wishful thinking. We need to grasp the nettle and talk about triage, about conserving Social Security for those with no other sources of income, and about devoting our scarce resources for palliative and preventive care. The Status Quo is completely, utterly unsustainable, but that needn't bring the nation to its knees--unless we actively insist that it does so.
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So since health care in the USA is expensive (why?), that justifies stealing other peoples money? Good argument... based on emotion rather than basic principals of good government.
Perhaps health care is expensive *because* of government interference.
It's called living in a society. Society "steals" according to your definition when it collects taxes to build a road, a school, hire a cop (to protect your stuff among other things), build an aircraft carrier, service the subway, bridges and other elements of infrastructure necessary to run a modern economy that allows your employer to make money, and so forth. There are plenty of societies around the world that have robust economies with plenty of wealthy citizens and that also provide great social safety nets including health care for their people. The idea that it can't be done here is laughable. It is all about priorities.
Are you talking about the PIIGS?
How about Germany, Japan, Sweden, Norway as a few examples where there seems to be a very effective balance between social services such as health care for all, and individual wealth creation. The idea that it can't be done is pure propaganda fostered by the "But I've been talking too much about me, what do you think about me?" crowd that seems to dominate our political discourse these days.
It's a good thing they rely on our military to keep them safe. Sure would have been hard to keep everyone 'healthy' if you had to defend yourself against the USSR.
Yeah, and they'd all be speaking German if it weren't for us too! Just ask the Germans. Look, we could debate until the end of time about whether we needed to outspend every other country on earth's military spending times ten to "defeat" the Soviet Union (a lot of smart people disagree), but we can certainly agree that the USSR is no longer a threat to Sweden, Japan, Germany, etc. I for one would rather have a strong health care system versus spending 1/3 of every tax dollar defending Sweden from Breshnev.
The point is that if we stop spending on our military, all of these advanced societies you speak of would drop their universal health care to defend themselves. Because we spend 1/3 of every tax dollar on our MIC, others around the world see a doctor for free. Wealth redistribution!
So we can't have a workable health care system in this country because Breshnev may rise from the grave and attack Sweden? Oh, now it all makes sense.
You may not have noticed but the broke ass Europeans are but a stagger away from serfdom to either the Russians (yep, still a threat) or the tender mercies of Islam. With the U.S. now spent into exhaustion and unable to shield them, what options to they have? They are militarily helpless (see Libya, The Balkans, etc.) and cannot depend on the U.S. to live for them any more. Maybe they will create a military? I doubt it.
Yes Japan is a great example, they are more in debt than the U.S. Many of the nordic countries also have incomes due to gov't owned natural resources, and many are running into the same demographic problems we are seeing now in the U.S. However, those countries do seem to have much better run governments that appear to be less beholden to corporate interests.
Do you understand that the citizens of the USA fund drug research for the rest of the world? Do you understand that medicare cost shifts to those with insurance directly driving up costs? Do you understand that making health insurance a tax deduction for employers perverts the effect of normal market forces? Do you understand that U.S. defense spending reduces the defense spending of other western countries? All of these issues are a direct result of U.S. government policy.
Before we turn the USA into the United States of Europe, we need to return to the founding principals of the U.S. and see if they actually work, rather than the perverted kleptocracy/corporatocracy we have now.
Corruption is everyone in our system and needs to be weeded out. Whole systems (like the Federal Reserve) need to be abolished. But I don't agree that part of the solution is to turn the nation's back on our elderly and poor, and I don't believe it is necessary either. Ironically, I think the quality of life for the better-off in this country is much better due to the safety net that we help pay for. Think about the scary places in this country (bad parts of big cities), and then imagine if that were how it is all over. Not a good resolution even if you want take a purely self-interested view of it.
Perhaps, but do you not think that we would see much more charity if 15% of people's incomes were not stolen as social security tax?
It is not possible to argue that caring for the elderly and poor should be a function of government based on basic logical/libertarian principals. It can only be argued based on opinion. Once opinion becomes the only reason for government policies then anything goes, i.e. all that matters is power and who wields it. Arguments based on opinion can never be locigally decided as all opinions are equally valid. Only arguments based on logical principals can be decided with any form of definitiveness.
A .45 caliber argument. The founding principals do work. Collectivism is immoral, destructive, and nihilistic. Try as you might it does not work because it is insane.
"Collectivism is immoral, destructive, and nihilistic?"
War is peace. Love is hate. Black is white. There, I feel better now.
I have seen a lot of this kind of absolute thinking and moral certainty from the right that any attempt by citizens to band together for the common good is somehow contrary to our founding principles, but I've never seen any factual basis for the statements. The founding fathers nowhere in the Constitution stated that our country is to be a pure Darwinian free market system with no social programs or safety nets. Quite the opposite. Enforcing the rule of law and protecting citizens from oppression requires -- by definition -- collective effort and government. "That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed." The founders were against tyranny and taxation without representation, but they were not against all forms of collectivism or taxation.
So the U.S. of A wasn't a "society" prior to 1913 and the creation of the income tax? There are different forms of taxation. A tax on wages is a direct theft of an individuals productivity, except that "soeicty" calls theft when commited by government taxes.
None of those infrastructure items you mentioned could be considered "welfare", so you are ignoring the original issue of stealing from the "rich" to give to the "poor".
This whole stealing from the rich thing is a bit debunked I would say. In fact, Zerohedge linked an article just this morning showing that the rich have gotten richer over the last several decades while the poor became poorer, due in large part to goverment policies such as propping up the Russell 2000. That's tax money going right back to those whose accountants kept their taxes low in the first place. Taxes suck and by definition there are going to be some individuals who pay more than they get back and vice-versa. That's the cost of living in a society. And you can't compare America of 1913 to today. Our economy in 1913 was still largely agrarian. Most people lived to age 40 or 50 at most. Our military was tiny. I guess if you really want to back to the good 'ole days, we could argue about the economic benefits of slavery. But kind of a waste of time, don't you think?
Of course those with more disposable income and more investments are going to gain more wealth faster than those with minimal disposable income and no investments. A properly functioning economy results in exactly that outcome and is what we should expect to happen. A properly functioning economy should see the standard of living of the "poor" also rise in tandem, which is what did happen until recently. However, government policies to cause wealth transfer to the upper class at the expense of the middle and lower classes are unacceptable.
In my opinion nearly every major problem we see today was directly caused by government interference or lack of law enforcemement: health care costs (medicare cost shifting, insurance tax deduction), tutition price increases (gov't sponsored student loans), financial kleptocracy (bailouts), mortgages (reglators & FBI ignoring fraud), etc. ,etc. Why would we want more government programs when we have all these examples of failed large government programs?
No it isn't tax money, it is borrowed debt money being used to prop up the economy.
Yes taxes suck, but you are ignoring the reality that social security and medicare, direct "rich" to "poor" transfer payments, make up more than 50% of the entire federal budget and are growing faster than the economy itself. Such a situation can never be sustained regardless of tax rate.
In our distorted system taxes go from the middling to the rich and poor. The high tax system leads to cronyism between government and their intrenched allies. If you want to complain about the rich getting richer, you'd better define who the rich are. Are the rich the productive class? Your heart-surgeon? Your small company employer? Or is the rich the well heeled super corporations like GM, Goldman Sachs, Citigroup, et al. that enjoy near lalwless entitlements from the government to raid the country's wealth? Do we need to strengthen government's hand at this juncture?
I agree definitions are difficult. I make a lot more money than a typical laborer, but I am not rich. I consider both the laborer and myself productive, however. I chose a profession which results in higher pay, but I don't think that makes me morally or otherwise superior to the laborer whose productivity I benefit from. I am currently a business owner, but I was not for much of my life. I was just as productive as an employee as I am now as an employer. I don't buy the argument that if we just stop regulating the giant companies, they will place nice and we'll all be in happy land with low taxes and plentiful jobs. I think we'll end up like China first. Why libertarians belive that unelected robber baron types are to be trusted more than elected government leaders, is a mystery to me. The free market only works if there are checks and balances. Ask those who competed with Rockefeller about that. The system is corrupt, but fixing it does not require leaving the the elderly and poor to fend for themselves and letting the giant corporations among us run amok.
In hydrogenated oil.
Nickel, it's what's for dinner.
We don't need the government to create group healthcare systems. I find the example from history of the Oddfellows quite interesting.
http://en.wikipedia.org/wiki/Oddfellows
Can't afford to protect the world either - Cut defense by 50% (easy) and a lot of the other fiscal issues start to look a lot more solveable. But no, In America, we can afford guns, tanks, planes but not decent infrastructure, education or health care. Obscene.
besides food it's about all we make well Bill. I know i have friends and they are very proud of their arsenal. I must say it brings a "longing feeling in my heart" too...
They call it a welfare/warfare state for a reason. It gives "each side" a reason to demand theft for their pet project, in an attempt to redirect expenditures currently "wasted" on projects they do not support. Meanwhile, they do not notice their support for the system as a whole provides support for the "other side."
The problem is not what the money is spent on, but that it is stolen, and spent in the first place. As long as society accepts the idea that theft and coercive violence is the best way to "run the world" then we will not overcome any of the social problems in existence.
Of course, the best way to run the world is to let people run their own lives, and the world will take care of itself as a result, as order spontaneously arises from chaotic systems. No central authority is needed, nor desired.
Protect? We don't do any protecting. What we do is dominate, police, maim and kill, or pay for those that do all of the above.
Cutting defense spending by 50% only brings the federal budget deficit to about 25% vs the current 40%.
You still need another 25% made up by additional cuts or revenue increases and this does not address the fact that mandatory government spending is increasing faster than GDP.
Someone needs to get this info to our Congress and President, fast! If they knew this, they would probably act to fix it.
Let me be devil's advocate. So what? So we have to keep borrowing to pay entitlements. So the national debt goes up. And then what? The whole thing is smoke and mirrors, and has been for a long while, and everyone knows it. Many people have been predicting disaster, and it hasn't happened yet. Who's to say this sham can't keep going for a long time?
So what? So what if your purchasing power goes lower every single day for the rest of your life?
So, maybe the sham can keep going, thing is, you can't. Now, apply this to every person around you, and imagine our future. It's not going to be pretty, fake band-aids, or not.
Would you bet your life savings on it?
You have a very good point. This sham can keep going on a long, long time.
Until it stops. I don't know when this will happen. It feels soonish. But might be another 50 years from today. All of those promises the policiticans made must be kept one way or other. Some will be broken but I think more fiat printing will be done to keep the promises. Easier to print than to tell the masses, sorry got to cut this program or that program...
No it can't. 50% more dollar devaluation and we will be paying $8/gal for gas.
Even at $8 it's not what it actually costs. We make fun of the OPEC countries selling gasoline at 25 cents a gallon. Our actual cost including the wars to secure it is what? And we pay what at the pump? Gasoline in the U. S. is subsidized!
dupe
RE: "the constituency of each fiefdom--Social Security, Medicare, Defense, etc.-- will undermine the other fiefdoms to maintain their slice of the dwindling Federal pie."
Social Security and Medicare are insurance programs into which recepients have paid for a lifetime - therefore it is gross mischaracterization to A) lump them with the military industrial complex (who only takes and does NOT contribute to its own operational costs) and B) call Social Security and Medicare "fiefdoms".
Empire is the antithesis of Individualism - caring for the sick and elderly through insurance programs to which everyoine contributes for life are not.
I am weary about the lack of objective observation and analysis - alas, that is the foundation of all our current evils. Let's get the thinking hats on and look at things in a detailed, objective way.
social security is a pay as you go scheme, not an insurance program. either way, the money has been spent is gone now, so the point is moot.
The point is not moot. The US Government continues to withhold SS and Medicare taxes out each every americans pay check, so if you want it to be a moot point then stop the withholding and give every penny back to those who paid it.
Ok, but your argument fails since SS and Medicare taxes are (legally as has been upheld by the Supreme Court) just another name for the income tax. They are separate and distinct from the payouts
I guess the question is then: Why and how have they become seperate and distinct from the payouts? I don't think the politicians have the stomach to institute haircuts for all, whcih will rpobably result in epic failure of the government and future of uncertainy and pain that none of us can imagine.
Because the Supreme Court declared it as such and Congress reserved the authority to alter any provision of the act at will. Social Security is not a contractual arrangement.
https://secure.wikimedia.org/wikipedia/en/wiki/Social_Security_%28United...
spinone - you are both technically and morally wrong:
soc.sec. & med.care taxes are "earmarked" or dedicated to both its current and future beneficiaries who all contribute to those benefits by paying those taxes.
By contrast, the military-security-industrial complex exist for the sake of the elite - one gigantic employment and bribery program, which sole purpose is to entice its beneficiaries - i.e. military-security-"defense"-contractors and all of their personells, to SERVE THE ELITE.
I REPEAT: THE TRUE ENTITLEMENT RECEPIENTS ARE THE RICH AND THEIR SECURITY MINION APPARATUS.
THE ONLY TRUE TAXATION IS THE ONE YOU PAY WITH YOUR LABOR.
You are incorrect. Congress has "expressly reserved the right to alter, amend or repeal any provision of the Act." Social Security is not a contract, citizens have no right to any benefits. Whether or not contributions are "earmarked" is irrelevant.
https://secure.wikimedia.org/wikipedia/en/wiki/Social_Security_%28United...
People are going to have to get over the fact that the money for ALL entitlements at their present levels no longer exists and pretty much everybody is going to take a haircut.
hey, zing!
chk out the last time the people who get soc sec got a cost of living increase, ok?
then, look at what goobermint workers have hauled off from the Treasury in new jobs and pay raises & increased benefits, since that date, years ago, ok?
also, some folks seem to think that the average senior is some greedy monster who is responsible for screwing up the country. propaganda check, ok? last time i looked the financial crisis and ongoing clusterfuk was caused by massive, layered, CRIMINAL FRAUD, aided and abetted by our elected shakedown artists and their employees in the goobermints.
the fact that these assholes now contol the justice dept & some, if not many/most of the courts, so almost no one responsible is getting convicted, does not make the seniors, or the needy, responsible, i wouldn't think.
unless people can start thinking a little more clearly, and for themselves, the same false dichotomies which muddled us into this mess will continue to be presented to muggle us thru it. but, as we are starting to intuit, we may be in the Time when that bullshit ceases to fly.
now, go get yourself a haircut!
BRAVO. I CONCUR. THE RICH & THEIR MINIONS ALWAYS BLAME THE POOR, THE OLD, THE SICK, AND - THE NOT SO SMART AT PLAYING LEVERAGE GAMES.
ZERO HEDGE - BITCHEZ. I SAY: Z E R O L E V E R A G E !!!
WORK & HONOR !
The rich don't blame the poor, they use "the poor" as a rhetorical bludgeon to shame the middling into silence and compliance while they institute programs "for the poor" that not incidentally create huge pools of money seized from the middling that they can then take. They use the government to supply the muscle to make this engineering mandatory. Then they preen about how compassionate they are in getting rich for their commitment to the poor. In the meantime, they produce not one useful thing for anybody.
Not disagreeing with what you said, but what percentage of the federal budget is social security, medicare and welfare? (Hint: somewhere over 50%). So unless you can claim that all of the remainder of the federal budget benefits "the rich", the numbers disagree with you.
huh?
America really needs to cut military spending by about half, lose Homeland Security and a few other governmental departments like HUD and Sallie Mae. Get rid of the Mexican part of NAFTA. The American people need to take healthcare into their own hands. Other than trauma, the vast majority of illnesses can be cured with information available.
"The American people need to take healthcare into their own hands. Other than trauma, the vast majority of illnesses can be cured with information available."
Hello, hello? Is anyone in there? "How to implant your own pacemaker"?
Talk about what? Talk about how cuts are impossible? As Mr. Smith points out every group will fight to the death to not get cut, and then suggest we talk about it. Every individual getting a check or income from Gov will fight to the death to not have it reduced. So no one will give up anything, talking about it means nothing. The system will grind forward till utter collapse and the chaos that ensues. The real conversation should be about getting to a lifeboat not patching the iceberg side hole in the USA Ponzitanic. Those that want to talk about how the ship can be saved are welcome to try to rearrange the deck chairs as the ponzi sinks beneath the waves.
Good to see you Shameful. Are you still in law school?
Graduated. Taking a break before taking the bar since I have a good job now and don't need it right now. Parents are amazingly insistent about taking the bar, but want to see what state I may end up in a longer term. Where I'm at now if I take it I'm boned if I move, which seems likely over the next 6 months.
Now trying to put the rest of my life back in order, like actually socializing with people and not just being a data sponge.
The law is a shithole. I'm thinking about learning a trade.
If a high debt 7 year plan is necessary for one to become a lawyer and they don't have guaranteed employment, then I always suggest to them (even when my opinion is not asked for) to go learn a trade... I make dick, but I didn't have to borrow a thing (although I married into some debt)... If I had to borrow, I would have just worked for a bank after getting my mba instead of trudging through law school... would probably have made more money for a few years, but with an obvious ceiling... not so much with the law... although, the lottery tickets are few and far between today. (mostly grind out transactional stuff anyway although I'm getting more trial time).
Shameful, you need to set up a solo practice via answering service... keep your day job until you get a client load that can sustain you and then go be an obnoxious, mysogynist, asshole (you make more money that way?)... hire a really, really good paralegal and let him/her do 80% of your work (pay them well and do a thorough background search)... when the workload gets to be too much, hire another one... eventually, hire another attorney, pay them dick and let them check the paralegal's work... check back into work weekly to keep them in line. winning (and only partially joking).
PS, shameful, I hope you didn't have to study too hard lol... the last 2 years of law school are supposed to be easy ;)
Yeah the debt can be a punishment, and I try to warn people who ask me about law school. I had a meaty scholarship and then I worked most of law school. I took on debt, but then I dropped the money I could have used to cover it into the metals so I could pay off my debt and still have a luxury car waiting for me. But to be honest I think there will be dollar problems and/or a student loan bailout, betting on morale hazard. And I think I was lucky as hell to stumble back into a well paying job during school, especially in this economic meltdown.
I'll have to keep that in mind. State I'm looking at moving to, I know some people and through wives they have some connections and hinted that might help me get my feet on the ground if I wanted to do that. Though would only move there if another dev job opened up for me to work while that happens. Appreciate the advice.
Last 2 years were rough for me, but then I was working full time in violation of the honor code...just never talked about it, and ducked the question when my law school friends would ask me what happened to me going out.
What honor code? If they don't give you enough work to keep you occupied, who gives a shit if you're working, screwing, or drunk off your ass? Hell, my dean was drunk as shit at our first bar review... not only did he take students keys (who were sober, but he thought were drunk), he drove home...
If they wanted an honor code, then they shouldn't be an unnecessary middle man to practicing law... go back to the days where if you can pass the bar, you can practice law... that whole time in between is a waste (you'll soon find in private practice).
Cheating on a test is one thing... but working while in school? Gimme a break... they can eat your ass.
I would also suggest working for a firm (part time if need be and only eating what you can kill if need be) to figure out the ropes... many a great lawyer has had to set out their own shingle straight out of school, but JFC does it take a long time to be worth a shit that way. It's how my boss got his start... teaching and keeping an answering machine back in the 70s... and, it gives you a really, really broad knowledge of the law (which is absolutely necessary to figure out how all the pieces fit together, even on seemingly mundane and simple cases), given you have to take whatever comes in the door... but, no point reinventing the wheel... even if you don't get paid much, your pay is a legal education (because you don't get that in school).
Best of luck... but when the going gets tough, you can turn to the collections/foreclosure side... or if private practice is too hard, you can always work for the government...
PS, you might want to look into doing part time work for a NFP or government employer, which might allow you to discharge student loans... keep your programming gig and get experience without risk or malpractice liability... or very little... you will probably get paid pretty well in addition to the debt foregiveness. Food for thought. Just be sure to research before you go diving in.
once a lawyer, you lose all social skills, it's like a druid spell. I knew I was moving to another state after school. I moved up to Seattle and worked in the prosecutors office. It was 91 and the job market absolutely sucked, but nothing like this one. It was so bad, a local comedy group made this:
http://www.youtube.com/watch?v=B7QtRCGQmrc
Have to check that out when I get home, no youtube at work. One reason not chomping at the bit to get into law, since I think I'm making more now than would as an attorney and my job is low stress right now. Not as prestigious though. Telling strangers I'm a software developer vs I'm a law grad and get way better results for law grad...stereotypes I guess. But stereotypes don't pay the bills.
Did watch my social skills atrophy, but partially blame sites like ZH, once you know what's happening harder to just be upbeat. Hate when people want to talk about money or the economy, I can feel the engines kick on and no one in polite company wants to hear what I have to say.
I join my brothers above in welcoming you back Shameful!
Well said man.
The system will grind forward till utter collapse and the chaos that ensues.
It's been said plenty of times on these pages but it's true: after the chaos comes their order.
So watching 'Ice Loves Coco' doesn't seem like such a bad way to kill the time until this happens...
Thanks for the ideas the other night. Yen. See I never forget./
We all can learn some things from this site...I learned that life is too short for impishness. Good luck to you dude.
Everyone is fighting for their piece of the pie, and America has sunk to the level of "It's all about me." Apparently, as a person that wants nothing from the government, I'm now a minority. The collectivists disgust me just as much as the fascists however.
Its obvious that what is going to happen with healthcare is that prices are going to be forced down so that we can all afford it.
Anyone yet know whats behind the DOWs sudden 90 point boner? Just more proof of how broken everything is.
Former Atl Fed dude says:
- Treasury may be able to forestall
default if the debt ceiling isn’t raised by Aug. 2 by
withholding interest payments on securities held by the Fed and
by revaluing the Fed’s gold certificates, Bob Eisenbeis, chief
monetary economist at Cumberland Advisors and former director of
research at the Atlanta Fed, said in a report.
THERE IT IS IN BLACK AND WHITE FED WANTS GOLD HIGHER
LOL, lets do an independent inventory of Ft Knox! Call in some gold assayers from Switzerland and let them break some drill bits on those tungsten bars!
If great research is done and noone cares does it make a sound?
I have lost a lot of money thinking people would eventually do the right thing, but they use every corrupt trick in the book until it is too late and disaster is the only thing left.
there's plenty of money for social security ! ... unfortunately, for the boomers, it's now on the other side of the line ! it's on the Wall St. side of the line. All we have to do is put a 1% tax on every derivatives transaction & we are just fine ! ....... this rhetoric of 'no money for social security' is a faulty premise. there's plenty of money, all the government has to do is put people's needs over speculators' needs .
how is it that my grandparents were just fine back in the 1960's ? their home was paid off in ten years, even tho it was a fifteen year mortgage; they had money in a bank earning interest & that was their savings for their retirement.
We didn't have baby boomers back then who want everything for free.
No, we had hospitals run to treat people not rape them.
We had interest paid on savings.
We manufactured something besides financial derivatives and bling restaurant circle jerk service mall rat consumption.
We had a gold standard and a non-debauched currency.
We had family farms and people who remembered the Great Depression.
The society had not yet become a cesspool of juvenile narcissism and greed.
The baby boomers expect to have their retirement paid for...by the tax payer of course...they expect to have their health care paid for....by the tax payer of course.... the expect to have long term care paid for....by the tax payer... they expect to have food stamps, welfare and on and on. All paid for by somebody else. They don't want a "dirty factory" around them. They don't want anything that might help us make progress in their back yard. They have totally fucked up a country that the people who suffered through the depression have sacrificed for and built. They are a bunch of greedy bastards.
+1. It hurts to have to agree with you, but the truth is the truth.
I think you got the generations mixed up. Those born before 1946 and those born after 1980 are the real bastards.
No, it's the boomers.
"Sickcare"
Exactly.
Corporate rape of the society.
Have you noticed people begging for money at benefits so they can treat a sick kid?
The USSA Sickcare System has passion for nothing other than your bank account or any assets.
Free if you walk across the border - an arm and a leg and your house and your life if you are a citizen.
I'm still trying to figure out how it cost my insurance company 38,000$ for shoulder surgery I had a little while back. The surgery itself lasted two hours, yet somehow a year's worth of income was needed. Doesnt really bother me because it was due to a car accident that settled for 250k. Never knew that someone wrecking their car into me could create a quarter of a million dollars of wealth. Of course most of this went to Lawyers, back to the insurance company, court costs, etc etc and I was left with about as much as I would have made at work had I not been in the wreck.
Just goes to show there is no part of the system that isnt broken, except my shoulder now of course.
if you fall asleep in a hospital bed it costs
$2200. hmmm. i know the formula to calculate that
is complicated and there is some certain justification
but, really, i was just sleeping and the on duty health
care professional was filling out a chart. and the days
and nights go by .. one after the other.......
lobby uncle sugar baby and have him cover the investors i
say ! so it went
Professional insurance for Dr.'s, medicare cost shifting, covering the costs of those guaranteed emergency care but who refuse or cannot pay, etc. The actual cost of treating you is minimal, it is everything else that adds up.
Yup.
The leeches are busy.
Suck, suck, suck.
In the West we´ve built a social state and a whole set of entitlements around it that are economically sustainable only over a very short period. The demographics was favourable, the economy grew at 10% a year and the system had not gone totally corrupt. This was transient and reality is know reclaiming its share to entitlement.
"it's all on paper", they used to say that. now
it is all on a hard drive. even the sheep are
born on hard drives today. somewhere, someone sits
watching on their flat screen t.v. the mortgaged earth itself
being lifted into the sky and blown into the power station
that provides their electricity, no flash light or candle
available, well-come the darkness. bleep unforseen....
bhaaaaaa...bleep ..n
.
Another live lamb birth at sheep.com
http://www.youtube.com/watch?v=SgnGaKXnk6Q
we have a technology called .....
Stuxnet?
is that nuclear porn? how does that
work and who gets off?
Indeed we do blindman, indeed we do...
http://aadivaahan.wordpress.com/2010/06/09/an-older-piece-pertinent/
ORI
ORI, didn't you predict a major catastrophic event last week? Looking back what was it?
Not me Paz, it was Piers Corbyn. And if Hekla blows, it would be very much within the window.
http://www.youtube.com/watch?feature=player_embedded&v=wp88l70R9FQ
The earth is morphing, one just needs to connect the dots. Weird stuff is going on.
ORI
I couldn't recall the post that is why I asked, but I vaguely remembered you posting something to that effect.
Thanks for responding.
RE: Perhaps a few million of the 76 million Boomer generation has started collecting Social Security, and the first Boomers, born in 1946, are just now qualifying for Medicare. That these programs have already expanded to the point that they consume all revenues should give pause to anyone still in the denial or rage stage of the denial/anger/grief/resignation/acceptance cycle.
SUGGESTION: Drop the tired old E. Kubler-Ross model already. I have devised a far simpler and effective philosophy of how to confront, not react to, the world: FACE IT.
In light of the fact that the flow of fiat/incomes is a secondary expression of the asset-elevators manufactured by the ruling elite class and its minions - anyone, here and elsewhere, with half a brain, must realize that focusing on fiat flows is symptom-gazing.
HERE IS WHAT REALLY IS GOING ON: "assets" are all volatile/unstable and of relative use-value - and - their instability is used by the elite and its minions to shift REAL assets into their control - by first pumping and then popping bubbles, in endless cycles.
Adding up the above facts - the recipe for FACING the world is simple: either drop out and boycott all elite/establishment/empire activity - OR - start sniping the elite and its minions.
Milton Friedman was right....
People would have been better off saving for themselves rather than to trust the government to do it for them. Some people may not have put anything away for their own pension, but now nobody has anything put away because the government took the money and lied.
Medical costs have soared out of reach because government intervention 4 decades ago poured massive money into it creating massive demand, outpacing inflation for years.
Before the mass scaling up of the medical system, hospitals and doctors were a parochial patchwork of mostly voluntary workers. There was no guaranteed access to anything. Hospitals were mainly run by religious organizations and depended on charity. You needed connections to get access to specialists. If you weren't in the right group your access was limited. Emergency medical care was extremely scarce especially outside large cities. Hospitals couldn't afford emergency rooms because they were a huge expense. There was no EMS or 911, there were unskilled "ambulance drivers".
There was very little funding for medical research. All the huge astronomical advances in medical science and med tech were due to the giant efforts by the National Institutes of Health. None of that would ahve been possible.
this is in part why we embrace the boom/bust cycle... now the bust. (but we should have plenty of residual technology).
Dupe
Hey Gwar, I'm stalking you from another prior thread... Also, wanted to tell you that I jammed with Gwar at the Spirit Club, SD. One hell of a show that was years ago! But, back to the point...
The middle class never had any real wealth anyways.
The Fed is a muse of sorts, our personal Jesus adorned in goat skin leggings, a horned savior and creator of second chances, a wonder of oligarch goodness (no rich creamy nougat necessary), creating a tough love opportunity for those with sight to covert any remaining transitory credit into AU real wealth. Even those with one glass eye can still take advantage of our dying societies masters largess!
All that's changed in the so called middle class is they've had their borrowed adult toys and marital aids taken away, ego solidifying credit cards put on restriction, unrealistic and utterly unbelievable gov retirement/health care promises broken (our Grandma's knew this was coming in the 80's for Baals sake), and HELOC cut off from their artificial pseudo-wealth bubble maker. There is one partial exception to this, and that is the savings that the MC had. I only consider these savings as that which was derived from their own labor, and went into vehicles that were not risk/gamble speculations (yeah yeah, I know it can be said, inflation forced the investments to get riskier and riskier to bring back a decent ROI... the MC didn't and weren't thinking that, they were only expressing greed). Moreover, hardly any of what is defined as savings was actually such, and what was, was only a dwarf size saving%. The rest went to Pizza Hut.
Most the MC I know knew this illusion was just that, an illusion from the beginning. They would murmur of the impossibility of it all while shoving hotdogs in their mouths. The only things left is for them to do now is wake up, spit out the PBR, and buy some PM's now on the remaining credit of the the illusion system before its back to a visible 2 class system.
In many advanced countries, health care is very good, and part of the tax system, not the for profit system. It is much cheaper. Our system is constantly pricing out care, then blaming it on those who cannot afford it. Even to the point of requiring them to buy horrendous inadequate insurance. Soon we will privatise the fire and police departments.
I am quite certain about one thing:
Promises will be kept. They WILL BE KEPT. Oodles of greasy shitty Fiat money will be printed and paid to the masses. If the masses moan about inflation and say that the money is not enough... Then more Fiat will be printed. More, more, more until faith is lost in the particular Fiat currency itself. Then its on to a new fresh Fiat or even better, back to Gold or Silver.
This is one reason why I am honestly unable to tell you what price to sell Gold or Silver. The amount of fiat printing to satisify the promises made to the masses will be exponential.
This rotten system has no reverse in it. It cannot handle a negative or zero number. So its on forward, more printing! The banks cannot handle any haircuts. The masses want their shit and now, no cuts! The giant corporations and the rest bets on inflation thus borrows a shitload of fiat. Nobody can really take a haircut for the most part. So... there will be deflation head fakes but we're headed for hyperinflation. Don't ask me when, it can be this year or 50 years later. Timing is not my strong suit...
And the DOW suddenly swings from -40 to +40 for no apparent reason at all in totaly broken USA.
Promises that cannot be kept?
Indian Treaties signed in Washington comes to mind.....
Many readers suggest that cutting Defense and raising taxes on the wealthy will preserve these entitlement programs.
Ah, I love the smell of Red Herrings in the noon hour
We need modest (yes, modest) entitlement reform along with defense cuts and NORMAL tax rates.
Now on to more funner stuff--look at what the EU loonies are saying about ratings agencies! They have to 'be very careful' to obey EU rules, and should consider 'suspending ratings' for bailout nations! Doesn't that mean that those nations' bonds would be ineligible for pension fund and other fund management requiring investment-grade ratings?
We can solve the US fiscal woes with....gasp...moderation. But the EU is running into the rocks to avoid bond haircuts right in front of us. Oh and there's our kleptocratic klass klowns trying to Japanisize us here at home to, to protect the rich...hey, doesn't that tie in to the actual post topic somehow? Eh....whatever....
Numbers please? And what are "NORMAL" tax rates? Are you conveniently ignoring the reality of a maximum of about 20% of GDP as tax revenues regardless of tax rates?
Without actual numbers to back up your proposed solution, it is worthless.
Look up any decent bipartisan report on the budget. I think you may be near a 'computer'. We have all the info we need...this has been done to death already.
American Amateur Debate Idol is over.
isn't this a bi-partisan report?
Do your reports include ~$80-100T in unfunded liabilities? GSE liabilities? War Costs?
What kind of revenue projections do they include? Declining? Ruler boner?
With a moderate reform, we could kick the can a little further... of course, you presume there is some social and political apetite for even moderate reform... which appears to be an incredibly large presumption... You gonna take the haircut first and in a completely disproportionate manner?
So I see you can't provide any numbers: FAIL.
The question is simple: how do you propose to solve the current 40% budget deficit?
33% increase in revenues and 20% across the board cuts? Good luck with that.
Completely eliminating all defense spending only brings the current deficit to 15%.
Once you figure out the current deficit problem, how do you resolve the problem with government mandatory expenditures increasing faster than GDP?
While I like CHS's work and I can't argue with his math, there is one thing I think he's over looking. I don't think we can expect 25% of the population to quietly sit there while they starve and die of the flu just so the wealthy, TBTF financiers, and the international corporate fascists can have lower taxes while they deflate the wages of the children and grand children of that 25% of the population. While other countries plunder America in the name of free trade and use the military of the USA to keep order so their companies can take advantage of globalism. I expect this to blow up in their faces. I know the MO around here is to be cynical and I suspect a lot of that is wishful thinking by a bunch of foreigners who it seems have just about taken over this board. It never fails to make me chuckle when some limey, frog, or kraut makes a crack about Americans being lazy.
The cost of caring for my parents will be born by me, just like they bore the costs of caring for their parents and my children will bear the costs of caring for me. If not by SS and Medicare then in homes by the family as it was before there was government plans. It has always been this way in America. The elites stole the money from SS and all this is now is an attempt to transfer the costs back to those who have already paid those costs once.
The ones who should be frightened are all the foreigners who depend on selling their crap here in the USA. It is becoming clearer every day what is going on and I think there will be a back lash against free trade, globalism, and free tax for corporations. I know many are hoping that the political elite will stop this from happening but when millions march on DC and beat the windows out of the capital the weenies in Congress will be more than happy to vote for a bill that says if you don't make it here you can't sell it here, a 100% tax increase for international corporations, removal of all loopholes, a decrease in tax avoidance, and closing all military bases outside of the USA and returning all those troops home. Keep dreaming that it can never happen, I know it can/will happen, I watched it happen in Nashville, Tn. about 10 years ago. I'm sure most of you never heard about it but when thousands of Tennesseans gathered outside the state capital screaming, blowing their horns and smashing out windows, as the governor hid under his desk, the law makers were more than happy to vote down a state income tax. The fear that revolt placed in the hearts of politicians was so great that to this very day no politician has the nerve to even bring up a state income tax. So, when the people finally speak don't kid yourselves, the politicians will do as they are told. All the bribes will be forgotten when the possibility of being lynched by the mob is made clear.
http://www.nashvillescene.com/pitw/archives/2011/03/09/woods-senate-vote...
25%? My, you are an optimist.
The elites stole the money from SS and all this is now is an attempt to transfer the costs back to those who have already paid those costs once.
Well said!
What happens when the ‘don’t raise our taxes’ mob meets up with the ‘don’t cut our benefits’ mob though?
In fact even in Greece the battle of the sacred cows has yet to play out. Namely convincing a 25 year old that he needs to pay for the retirement of 55 year old while also accepting that they have no chance of getting the same deal when they turn 55? In short the 25 year old needs to provide for ‘two’ retirements, both his and his fathers?
I think the clearer solution is to just eliminate the middle man of the State and to have children directly support their parents if needs be and for the parents to get back to work if able. Didn’t raise productive kids and/or accumlate a large store of (non-counter party risk) value for retirement? Well sorry your’re up S creek. No other solution seems to work. Not unlike the human condition before this brief one generation long social ponzi experiment.
Hey at least we have extensive automation, cost effective treatments for many illness and computers to help reduce the physical drudgery, suffering and mundane work that was the bulk of the human condition less than 100 years ago. So while the concept of saving only 10% of what you spend during retirement (the balance provide from a social Ponzi scheme from your children and grandchildern) allowing endless rounds of golf and casinos starting at 55 until age 100 after barely 30 years of semi-work (compared to 200 years ago) is a thing of past all is not bad going foward just not as good;
a show of hands for going back to the typical lifestyle of someone born 200 years ago vs what likely faces us after we emerge on the other side of the social ponzi scheme collapse?
What a zoo the USSA is:
The Elephant in the Room: Panel on Immigration’s Impact on Health Care Reform
Pay especial attention to ROBERT RECTOR's remarks.
Rodolfo Acuna (professor of Chicano studies at Cal State Northridge) “There’s a growing feeling ‘Why should we pay for all these senior citizens’ if the majority of them are white and all they were willing to pay for was prisons?” [Jonathan Tilove, Generation Gap Becoming Racial Gap, San Francisco Examiner, Nov. 23, 1997, p. A17.]
I would be curious to know how much tax revenue would increase if the deductions for interest and taxes were eliminated. I've suggested doing this before as a way of shoring up social security. We could also impose an "austerity tax" on the rich which would be calculated to claw back the disproportionate tax benefits they received over the last twenty years and put their average yearly marginal revenue increase on par with the middle class. I'm sure they would be happy to make the sacrifice. The bulk of this could be raised from the top .1%. What's fair for the goose...
99.2 trillion? lol...welcome to America, land of the absurd...I guess obama was right when he said "we do big things"...
dup.
Govt is just ignoring the reality of this situation, no one wants to admit that this is a time bomb.
80% of the commenters here are more lucid and present better arguments than CHS. Please rescind his posting privileges.
Typical bullshit filled article. First off the National Defense budget is double what he claims in the 1.2T- 1.5T range so much more cuts available there. We just squandered a chance to revamp our Health Insurance System. Get the profiteers out of the system. Some form of single payer, Medicare for all, whatever. Bring our expenditures in line with the rest of the world, with reality, problem solved. This debate is about preserving the low tax rates for the economic elites and the huge profits in health Insurance, pharmaceuticals, and the Military-Industrial-Congressional complex. Trying to persuade the Middle Class that they haven't quite had "all they can take and the they're not going to take it anymore". Fucking assholes.
TPTB would like us all to put the cart before the horse.
Without evaluating the unnecessary spending for the war machine, the finance cartel, and the pharma/health insurance industries, ... it is impossible to know what actual health care and retirement benefits can be afforded.
And yes, I know some pensions are excessive and deserve to be reduced. But many of those excessive public "pensions" ( as well as 'private' pensions) are to a politically connected elite, or to the enforcers of empire.
60% of federal civil servants work for the military, homeland security, or the CIA.
Sorry....this is the USA. We wait until a disaster happens then blame anyone other than ourselves for the event. Plan LOL. Prepare LOL. Not this country......there's too many "pregnant at 16" shows to watch on MTV....sorry, call on another country to take over world leadership. We've been there and done that.
Of course, there must be something worth fighting for.
I would prefer to simply bow out. Thank you, bye America, no longer worth fighting for. I am at 6 months and counting.
A big problem is we get no news but for the news on the internet. CNN and Fox are both a joke. I am always amazed when I travel outside the US and see the real news, not one murder case for 6 months on the tele.
"We need to grasp the nettle and talk about triage, about conserving Social Security for those with no other sources of income, and about devoting our scarce resources for palliative and preventive care. "
And those with no other sources of income got that way by having the lastest big screen tv, a new car every three years, expensive vacations and spending with no view for tomorrow. Why should Social Security reward that group with preference over those who provided themselves with additional future sources of income?
“The promised programs are already consuming every dollar the government collects, and the Baby Boom has barely begun to retire.” – Charles Hugh Smith
This increase in retiring Boomers is arriving with the promises made to these people when they were forced into government mandated Social Security and Medicare programs. And, at this moment, while both political parties are suggesting that the delivery on these promises needs to be scaled back, the politicians are making new promises which will need to be covered by even deeper debt for the future.
What’s more, much of the rising Social Security and Medicare liabilities are due to the wholesale addition of non-payers to the rolls.
In 2010, I paid 15.3% ($13,243.20) in FICA tax on my self-employment income up to $106,800. This is the combined social security tax rate of 12.4% and the Medicare tax rate of 2.9%. I continued to pay the 2.9% Medicare tax on the remainder of my income as there is no limit to the wages subject to the Medicare tax.
I had no choice.
A record one in six Americans now is on Medicaid, the government's health program for the poor that is now intermingled with Medicare, according to USA Today. Medicaid, of course, is just one of several government anti-poverty programs that have seen large increases in caseloads and in costs.
The population transfer from Mexico to America is one of the largest budget items facing Americans -- although it is being ignored in the media and in Congressional rhetoric -- especially when one talks about "entitlement programs" such as Medicaid and Social Security and education.
And has the Congressional Budget Office already forgotten the lowball $1 Trillion it calculated for Obamacare alone, a bill that must be paid over 10 years for an additional 32 million uninsured people, adding 16 million people to the Medicaid roll and subsidizing private coverage for low- and middle-income people?
While banks and America’s ruling cartel continue to feed off of the taxpayers and while the politicians every day make new promises for votes, the old promises are to be broken because they are “just too large to manage.” Never mind that the politicians replaced all the SS funds with worthless IOUs and spent the money on only God knows what.
Isn’t it time to meet the government’s promises before making new ones?
JR, talk with your accountant about incorporating (S corp or LLC w/ s corp election)... you might save a few $$$ on that medicare tax... depending on what your accountant will sign off on for a "reasonable salary" for the corp to pay you.
There is no sense in paying taxes you are not required to pay... tax professionals aren't just for the big guys... a good tax professional pays his way regardless of who his client is... and practically everyone with any income can benefit.
I will, MachoMan, and many thanks for the advice!! The possibility of keeping a few more dollars in my pocket is incentive, indeed! :-)
Cancel the debt through Glass-Steagall, it's fraud, and there is no reason to cancel social security nor Medicare/medicaid.
It's the fraud that has tapped us out. Inherent in our broken as a rule monetary system.
Glass-Steagall
Or we can continue living..no wait dying...for a broken system, that doesn't work, because it heaps useless fraudulent shit to supposedly take up all our 'money' so that we can't do anything else but be slaves.
We choose to be slaves, we don't have to be. We CHOOSE it. (or better put, the people don't hold our gov't officials to account and thus THEY choose it)
They're too busy being pissed off about Casey Anthony between American idol episodes.
It's the 'fraudulent debt stupid'. The whole debate is a farce, with both sides being 'stupid'.
yes. the insidious beezle strikes as you say. as people
argue from the box of belief defined by the gatekeeper rather
than thinking about what is true. break it down !
******************
Print, Baby, Print!!!!
******************
Inflation is the "Death Panel" for Savers and Seniors...saving Debtors at the expense of The Frugal.
How can we be "broke" if taxpayers gave Wall Street two years of record high bonuses....over $150 Billion in Bank Bonuses 2009 and 2010?
+ 1000
Its really sad isn't it. I'm inclined to save. But the currency I save is the USD. Why save a endlessly printed fiat currency? It's a real problem for me!
Best thing I could do so far is to set aside fiat dollars I can afford to lose and buy certain yellow metal that cannot be manfactured at will. But even then, I am not sure if I will survive the hyperinflation that will come.
FOFOA said it best... its a war between savers and debtors right now. Never mind capitalists and socialists or other labels. Its simply between savers and debtors right now.
Well said, PulauHantu29. A unique point, and powerfully put. Add my +1000 to Lews Therin’s.
In addition, seniors face large and growing health care expenses. After most couples retire, the additional annual premium costs to them for Medicare, Medicare Supplemental and Pharmaceutical Insurance averages several thousand dollars – a ballpark of around an additional $7000 per couple annually. Medicare is not "free," even after retirement.
Even though my retired dad seldom ever needed a prescription drug, he felt the pressure to purchase Medicare Part D insurance coverage through the government's "mandatory" prescription drug plan because he knew costs for medicines would sky rocket once the plan went into effect and, that, if he ever did need a medical prescription, the cost without insurance would have the potential of financially wiping him out.
To the Robert Rubins and Alan Greenspans, the word entitlement “reform” that they bandy about means that other people need to take a cut in the money they were promised under contract even though it was the Congress and the bankers who looted the accumulated surpluses in the Social Security Trust Fund. It’s enlightening to look at the list of Goldman Sachs-attached people to the current administration.
It’s also enlightening that Goldman Sachs funded, along with its ex-leader Robert Rubin, a think tank called the Hamilton Project and embedded it within the Brookings Institution.
The Hamilton Project pushes for cuts in entitlements (such as social security), for outsourcing American jobs, and for more NAFTA-type agreements. It helped provide the game plan for many government "programs."
Barack Obama while a senator was chosen to give the inaugural address of the Hamilton Project in April, 2006; Joe Biden spoke there in April 2010.
I thought the lottery cash was supposed to fix all the problems? Looks like they need another scam..
Here's a question: what percentage of our budget is spent on medical treatments for people over 85? Over 90? Over 95
Resources should go to help the sick, not keep elderly people alive for a few more weeks
Could not agree more. Life support is a set of machines which pump money out of insurance companies into hospitals. At some point it becomes clear your time is up: let it go.
the healthcare graph = +++ 12 Flags Over Medicine!
obviously, we need more clinics, and access designed to keep people away from doc-tors. i would go to a good nurse-practitioner for wellness checks and conventional medical stuff, like when the woman i'm caressing sticks a fork in my leg.
" . . . like when the woman i'm caressing sticks a fork in my leg."
You're supposed to make friends with 'em first.
Did you take fork pronunciation lessons from Ripley's clone?
Repealing the Bush tax cuts for the rich wouldn't hurt.
Right--a family that works hard to earn 250K/yr should have to carry as heavy a load as possible. Fuck you, Lord Putz.
If Medicare is done away with it will be the triple whammy for workers. When insurance premiums were cheap, employers used company controlled health and life insurance as a tool to refuse to raise wages. It was cheaper to carry insurance for the workers than to pay them more. Therefore insurance premiums were actually paid for by the workers. That's whammy number one. Then when the health care costs and health insurance costs went through the roof, mainly because of company controlled insurance, the government stepped in and came up with Medicare, transferring the health care costs of the old and sickly from the insurance companies and employer controlled health insurance, back to the workers through the medicare tax. That's whammy number two. Now they want to cut back or do away with Medicare and once again transfer the health care costs of the old and sickly back to the family/workers. If this happens it will be the third whammy for workers. What an amazing scam, charge someone the third time for a service they already paid for twice.
Our healthcare system was broke before Obamacare. it is a fee for service based system and everybodies incentive is to provide more services. Hence the US healthcare costs 17% of GDP and dosn't cover 40 MM people. Europe systems cover 100% for 11% of GDP with the same outcomes and life expectancy.
Ummm, no. Europe has better outcomes and life expectancy while spending less money.
People waited far beyond the point where "conversations" can help.
It is amazing to watch human beings act exactly like a bunch of chickens discussing "holding conversations" in a slaughterhouse entirely controlled by predators who care zero about conversations or opinions or ethics or law or anything other than enslaving and destroying the chickens.
Humans have lost the ability to act. Humans are toast.
Get ready because it's coming....
God
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Conspiracy Nation
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it is not the promise but the nature of the unit
of payment that will fail.
"We need a national conversation about reality, not wishful thinking."
A higher-order reality that we must discuss first is this: who is "indigent" and should be helped, and who is not, and who would be expected to carry their weight? It is not right to allow people who should be carrying at least some of their own weight to freeload on the rest of income earners. We have allowed politicians, bureaucrats and activists to raise and raise and keep raising the level of income in relative terms of those who qualify for government aid. This can most easily be seen in how how a level of income still defines a family as being having "at risk" children for purposes of being able to receive free school meals.. The people we label as being "poor" are now the demgraphic that is most likely to be obese.
We used to be prosperous enough to pay benefits to anyone and everyone. We were just fooled by a credit/fiat money mirage. The left, who rushes to shower poor people with benefits, cheats them because their aid scheme is unsustainable, a concept the left loves to scold the rest of us about.
We must define who should be the recipient of aid before we can know at what level of aid we can make a promise we can keep, and above which level lwe cannot keep.
it seems the most in need are the bankers of all stripes
be they foreign or domestic, so ...
the bailouts and recoveries continue. the "rich" are broke
so we blame ...... the poor ! and bailout .....
the rich ! this is how the system is designed to work.
where is the problem ? resources. simply steal them, it is
systemically consistent and therefor easier than thinking and
developing working relationships. it is the new diplomacy
"The entire notion of entitlements based on age requires an ever-expanding population of working contributors and an ever-expanding economy. If either condition isn't met, then the programs fail. Fisher's message is clear: our entitlement programs will fail because there is no way to raise $100 trillion in additional taxes in a declining economy."
Exactly... -And, in a nutshell, this is exactly why Congresss will do nothing to enforce existing immigration laws and may even force through mass amnesty. The real purpose?.......to gain more taxpayers so government can continue to grow.
Then let us get honest about it.
How many people do you want to die?
And how quickly do you want this to take place??
These "promises" which "cannot be kept" are the ONLY reason you have 315 million people in this country.
I'd really like an honest discussion on how many people you'd rather see die and how soon -- and that goes from the conservatives to the Libertarians and the like...
The USA needs to STOP paying interest to the banksters. Take back the right to issue your country's currency,and the interest goes back to general revenue for the country,NOT private profits for wall street bankers,and the change goes to the gov.
Tear down the Industrial military complex that drains your country dry.
Stop giving the IMF. money they do not deserve,and they should be banned from the USA along with the ongoings of the Council on Foreignn Relations (CFR).They are a cancer to your country,and keep eating away at sovereignty.
And the Trilateral Commission is a sack of shit operation also.
Time to stand up folks....get off your knees.
His math does not add up. He is an useful idiot just like Krasting. If the government could raise additional $750,000,000,000 in revenue, it could eliminate virtually the whole Social Security and Medicare tax. ($750,000,000,000/$12,000 per annum=62,500,000 beneficiaries or 20% of US population)