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Projecting Social Security; Medicare; The Budget; Mandatory, Discretionary And Interest Outlays

Tyler Durden's picture





 

Presented without commentary, cause it's really all pretty self-explanatory. Compliments of Ned David Research.

 


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Sun, 04/11/2010 - 00:23 | Link to Comment Pure Evil
Pure Evil's picture

I like the way those baseline budget projections shoot straight for the moon.

Of course with all those FRN's collecting dust at the Treasury and the Federal Reserve, they have to be spent somewhere eventually. The didn't create them out of thin air for nothing.

Maybe if Ben Bernanke is able to reconstruct the Wiemar Republic in the US we can use all those FRN's for tinder instead of having to buy coal to provide heat in the winter.

Maybe to help brainwash the masses into accepting the coming commode flush of cash into the monetary system they should do a remake of the movie, Brewsters Millions, bypass the billions and rename it Brewsters Trillions.

The plot: A b-movie star has to waste $30trillion in 30 days in order to inherit $300trillion; however he's not allowed to tell anyone about the $300trillion deal.

Sun, 04/11/2010 - 00:35 | Link to Comment MarketTruth
MarketTruth's picture

Well DUH!!! Of course Medicare and So-So Security are classic PONZI schemes. Makes Madoff seem like a mere punter. Of course this is why the handlers of Obama had to have him push for the new healthcare bill.

BTW: When are the REFUND CHECKS going to given to those who have been forced into paying into medicare for many years yet are too young to receive any benefits? Or did the US Gov just commit the world's biggest robbery of the American people?

The saying goes something like this: The last act of a rogue government is to rob the country/citizens of their wealth.

Sun, 04/11/2010 - 10:57 | Link to Comment three chord sloth
three chord sloth's picture

The saying goes something like this: The last act of a rogue government is to rob the country/citizens of their wealth.

+1

Sun, 04/11/2010 - 12:07 | Link to Comment Rainman
Rainman's picture

Speaking of the Grand Finale for a rogue government, here's a "Bennies Gone Wild" piece in today's Sacramento Bee. Woe to the residents of the People's Republik of Kalifornia . 

 

  http://www.sacbee.com/2010/04/11/2670020/pension-promises-threaten-california-.html 

Sun, 04/11/2010 - 13:56 | Link to Comment SayTabserb
SayTabserb's picture

The easy solution is so obvious: Kaleeforneeya simply needs to end all government services, and fire all existing employees, and devote its entire budget to paying pensions. Reading that article, it's obvious a lot of cities and governments are already at the 100% shortfall point already - with pension obligations greater than their current operating budget.  Get on with it - former employees must be served!  It's the law.

Sun, 04/11/2010 - 14:25 | Link to Comment Par Contre
Par Contre's picture

Good story, thanks for the link. Of course, it only says what any ZH reader already knows. Governments are bankrupt, and a tax revolt is inevitable.

Sun, 04/11/2010 - 18:23 | Link to Comment MarketTruth
MarketTruth's picture

.

Sun, 04/11/2010 - 18:23 | Link to Comment MarketTruth
MarketTruth's picture

Speaking of tax revolt:

 

NATIONAL STRIKE
April 15 to April 18TH
Tell Everyone You Know
POST THIS ON EVERY DISCUSSION BOARD
www.taxfree15.com

Sun, 04/11/2010 - 17:06 | Link to Comment DosZap
DosZap's picture

Screw the Medicare refund, I want my Social Security Pay In.

Sun, 04/11/2010 - 00:35 | Link to Comment RottingDollar
RottingDollar's picture

Demographics dictate that after 2045 losses will moderate so not sure why the CBO doesn't reflect this fact.   Everyone knows baby boomer bubble causing many of the abnormalities.  Social Security is an easy fix, although health care is still a black box.  

Sun, 04/11/2010 - 12:44 | Link to Comment BS Inc.
BS Inc.'s picture

Easy to fucking say if it isn't your money flushed down the toilet supporting Baby Boomers you've never met and don't give a flying fuck about.

As the son of Baby Boomers, I don't have that luxury. I hope they all fucking drop dead, with the exception of my parents and relatives. They're cool, even though I have disagreements with them.

Sun, 04/11/2010 - 13:38 | Link to Comment MrPalladium
MrPalladium's picture

But the death of baby boomers is not the only ball in play in this demographic game.

The second ball in play is the metastasizing population of 80 IQ citizens (and non citizens) on permanent welfare. These are barely able to function in a service economy and can never generate enough productivity to pay for the education of their children, their medical care, and their retirement costs.

The potential for group conflict and collapse to a much lower order of complexity - a la Joseph Tainter - is compelling, especially as the competent flee the costs of supporting this hostile population.

A good time will be had by all!!

Sun, 04/11/2010 - 17:17 | Link to Comment DosZap
DosZap's picture

"Everyone knows baby boomer bubble causing many of the abnormalities"

 

 

Hey, Bro, these Mutherf*^*@*@'s had 60 yrs of PAYMENTS they stole, if the Congress could have left it in the FUND it was intended, and not used it in the General Fund, simply investing the monies in Treasuries, and Bonds, there would be TRILLIONS IN SURPLUS.

The Abnormalities are in a 10 mi square in D.C., how dare anyone blame the honest, for the sins of the thieves.

We prepare for our obligations, and we, pay them, should WE expect the VENERABLE United States Government to at least not be as honorable as Joe Six Pack?.

Sun, 04/11/2010 - 00:58 | Link to Comment three chord sloth
three chord sloth's picture

But... but ... this just can't be! All my life I've been told big government liberals are smarter... they are the long-term thinkers! All of these programs are "investing in people", and if we spend some money now, we'll get it all back in the future! The shiny, happy, prosperous future that only big government liberals can bring.

Assholes. Destroyers of great civilizations.

I'd love to see the charts for France, England, Germany, et al. Despite their lower military expenditures and far higher taxes, I bet they look just the same as these.

The Dark Ages won. Most of the world never left, and the West is most of the way back down.

Sun, 04/11/2010 - 04:07 | Link to Comment Howard_Beale
Howard_Beale's picture

This has nothing to do with Liberal or Conservatives. Both are big government, no matter how you slice it.

Sun, 04/11/2010 - 09:38 | Link to Comment three chord sloth
three chord sloth's picture

Change that to Republican or Democrat and I'd agree. The trouble is too many Reps pretend to be conservative but aren't, and the public has no way to figure out who are really small gov't conservatives and who are old-fashioned 1950's style big government liberals passing as conservatives.

Our media sure as hell ain't gonna tell us the difference... they aren't smart or well-educated enough to tell the two apart. For a bunch of people who's job it is to observe the world and report, they are pretty damn clueless. The average reporter has the observational skills of a yam. You'd think they would've noticed by now that everything they believe in bloats, collapses, and dies... but you'd think wrong.

Sun, 04/11/2010 - 09:59 | Link to Comment mikla
mikla's picture

+1

Sun, 04/11/2010 - 10:23 | Link to Comment docj
docj's picture

Well said.

Sun, 04/11/2010 - 10:29 | Link to Comment JW n FL
JW n FL's picture

+ 1

Sun, 04/11/2010 - 10:30 | Link to Comment TexasAggie
TexasAggie's picture

I forgot what organization did a study on SAT and GRE scores but generally persons majoring in education and journalism were the two lowest profiles on both the SAT and GRE.  in 2002, I was in Washington DC and a reporter for the Wash Compost ran a story about two planes from the same airline: on the 1st day, a plane from the west coast was diverted to IAD (Dulles) instead of NCA because the pilots entered the wrong transponder code, and on the next day, the airline had a plane taking off from runway 19 flew over the VP's house. Runway 19 is taking off at 190 degrees, almost due south and the VPs house is north of NCA.

Sun, 04/11/2010 - 10:31 | Link to Comment TexasAggie
TexasAggie's picture

I forgot what organization did a study on SAT and GRE scores but generally persons majoring in education and journalism were the two lowest profiles on both the SAT and GRE.  in 2002, I was in Washington DC and a reporter for the Wash Compost ran a story about two planes from the same airline: on the 1st day, a plane from the west coast was diverted to IAD (Dulles) instead of NCA because the pilots entered the wrong transponder code, and on the next day, the airline had a plane taking off from runway 19 flew over the VP's house. Runway 19 is taking off at 190 degrees, almost due south and the VPs house is north of NCA.

Sun, 04/11/2010 - 13:13 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

Our entire political system is corrupt beyond redemption.  It doesn't matter one iota what one individual Congressperson may claim they will do once elected.  It's what their true owners will _allow_.  And those true owners aren't us, they're the deep pocket special interests who fund elections and attack ads.

And the mass media?  "News reporting" in most cases has become nothing more than entertainment.  The news organs of networks were once loss leaders due to their perception that the "public service" part of their FCC license mandate meant an informed public rather than an entertained one.  That is no longer the case.  They need to show a profit and you don't garner a large audience share by exposing a harsh reality.  And what news team would risk being continuously ignored at Prez press conferences by asking hard questions or have guests refuse to show up if they were grilled to the extent that they should be?

No, it's all just a bad farce of representative democracy, obvious to anyone who has even the slightest clue.

Sun, 04/11/2010 - 01:19 | Link to Comment Rick Blaine
Rick Blaine's picture

Oh yeah...lookin' real good here...REALLY good.

This isn't going to end badly at all.

Sun, 04/11/2010 - 01:26 | Link to Comment CitizenPete
CitizenPete's picture

This will never happen.  The debt fairy will save us. 

Everyone close your eyes, now on three!... 1, 2, 3...

I Believe

I Believe

I Believe

Sun, 04/11/2010 - 01:44 | Link to Comment Number 156
Number 156's picture

I believe I will never see a dime of social security.

 

Sun, 04/11/2010 - 04:09 | Link to Comment AR15AU
AR15AU's picture

Oh, you'll get your $1000 / mo...  the only problem is that $1000 will barely buy a bag of groceries by 2040.

Sun, 04/11/2010 - 13:29 | Link to Comment jdrose1985
jdrose1985's picture

The dollar sink to parity with the yen by 2040 hahaha

Mon, 04/12/2010 - 00:50 | Link to Comment ZeroPower
ZeroPower's picture

So what, the minimum wage would then be $100/hr

Sun, 04/11/2010 - 08:21 | Link to Comment Cursive
Cursive's picture

Now you have to begin wondering if you'll get to keep your 401(k) / IRA.

Sun, 04/11/2010 - 12:23 | Link to Comment QQQBall
QQQBall's picture

Is there any doubt?

Sun, 04/11/2010 - 22:33 | Link to Comment pan-the-ist
pan-the-ist's picture

Exactly.  If the banksters haven't found a way to steal it first.

Sun, 04/11/2010 - 08:29 | Link to Comment Bruce Krasting
Bruce Krasting's picture

The information presented in these graphs is not correct.

This link takes you to the SSTF web site and shows actual cash flow for OASDI for calendar 2009. The cash flow surplus was a lousy 3.4b.

http://www.ssa.gov/cgi-bin/ops_period.cgi

The following is a link to the most recent (March 2010) CBO scoring of SS. They show a cash flow shortfall of $29b for 2010.

PDF FILE: www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf

For what is worth, my own analysis shows that the 2010 cash flow deficit will be closer to $60billion.

The graphs show the SSTF defict coming in 2017 (a very old forecast).

This "party" started last year and is just getting going. By 2011 the deficit could reach $100b if the economy does not recover.

Don't trust the CBO to give you good info on this topic. Things are much worse than even they are telling you.

Sun, 04/11/2010 - 11:24 | Link to Comment Hulk
Hulk's picture

In 1967, the house ways and means commitee predicted that medicare would cost $12 billion in 1990. Actual cost:$110 billion ....

Sun, 04/11/2010 - 08:44 | Link to Comment boooyaaaah
boooyaaaah's picture

In new Jersey the big problem is government worker's fat retirement benefits ---- a fix to the credit problem requires a fix government retirement

At GM the big problem is paying for the fat retirement programs

How come we never hear about the Federal government retirement programs?

How much present and future government spending is tied up in that. Might as well put all the cards on the table. Do federal workers pay into soso security. Or medicare.

 

 

 

Sun, 04/11/2010 - 10:27 | Link to Comment three chord sloth
three chord sloth's picture

I tell people this all the time.

Do you wanna see a semi-sustainable retirement program? Look at social security. You pay in enough to retire as a millionaire, but get back a check a half-step above the poverty line. Any retirement program that is more generous than SSI is gonna collapse as soon as it loses geometric growth in population/GDP... and every society/organization loses geometric growth eventually.

Sun, 04/11/2010 - 13:18 | Link to Comment fuu
fuu's picture

My father did 35 years at the VA. He paid into SS and the Federal pension program. When he came ready to retire they told him to choose one of the other. Collecting both was considered a double dip.

 

I have nothing other that that anecdotal story though.

Sun, 04/11/2010 - 10:45 | Link to Comment Astute Investor
Astute Investor's picture

After reviewing these charts it's clear that Washington and Wall Street share the same management philosophy:

IBGYBG - I'll be gone.  You'll be gone.

Sun, 04/11/2010 - 12:34 | Link to Comment perchprism
perchprism's picture

 

Usually they'd be flung off the Tarpeian Rock just outside Capitoline Hill.  When the Vestal Virgin Tarpeia betrayed early Rome to the Sabines, her body was hurled from the rock which later bore her name.

 In a gesture to modern sensibilities, they should simply be pushed, handcuffed, into the Potomac.

Sun, 04/11/2010 - 14:38 | Link to Comment Par Contre
Par Contre's picture

With all due respect, I think throwing them off the nearest overpass onto I-395 would be more efficient, and much more convenient.

Sun, 04/11/2010 - 09:53 | Link to Comment Shameful
Shameful's picture

What is the CBO smoking to get 6%+ for year to year growth in revenue?  Hell why not just pick 2-% year to year to make the number look good?

Either America is set for an epic growth or they plan on hitting us with epic taxes, and then maybe we can once and for all tell if we are behind or in front of the Laffer Curve.

Sun, 04/11/2010 - 10:37 | Link to Comment TexasAggie
TexasAggie's picture

Also, who gets to make the definition of mandatory and discretionary.  I know, SS and Medicare and interest and other welfare programs are mandatory.  They fixed it so they don't have to appropriate funds for these programs - get back to Congress every yr appropriating funds for both SS, medicare and the new HC instead of putting them on automatic. 

Sun, 04/11/2010 - 10:38 | Link to Comment JW n FL
JW n FL's picture

Hot potato...

 

When the music stops?

 

Who's election year will it be when the real pain is felt?

 

and... the standard "it's the last guys fault I swear! I had no idea! I have been in Government service for the last 20 years but I didn't know!"

 

Enough of that... lets talk abortion!

Sun, 04/11/2010 - 12:33 | Link to Comment TexasAggie
TexasAggie's picture

These lifetime Congress persons - Biden - what about 40 yrs, Franks over 40, Chris Dodd, Charlie Rangel, etc all are multi-millionaires and yet they have only worked as Senators or Representatives. They now make about 167K (Biden as VP makes more), yet they have multiple homes, and lots of money. 

When people are elected to serve, they should list all assets (forgeting one is a capital offense) and if at the ned of any legislative session (2 yrs for Representatives, 6 yrs for Senators), their net worth has increased more that the cost of living, they are summarily executed.  If they are married or living with a bf (BF), that member of the household cannot benefit from the member's election.

We might have an ethical Congress for once.

Sun, 04/11/2010 - 09:56 | Link to Comment Madcow
Madcow's picture

I've come to the conclusion that bankers are paid to confuse and mislead the public (aka "exit strategy").

Once a corporations' finances become so bad and hopeless, they'll simply initiate a transaction - a merger, an acquisition, a debt re-structuring, etc.  This confuses the markets and makes it impossible to get a clear view of the future. 

Same thing with countries. Now that the balance sheets of sovereign nations are a complete mess, they've got to recommend a bunch of mergers and acquisitions.  That's the only way they can stay a couple steps a head of the law. 

Its like riding a snow-mobile over a thinly frozen pond, hoping the ice breaks behind you. what other choice do they have?

Mon, 04/12/2010 - 08:44 | Link to Comment moneymutt
moneymutt's picture

so true, our parasites hide both in the private "free" market and in the govt, and they hide mostly by confusing us or by govt people say the market is the problem or business people say govt is the problem...truth is, fraud, lack of transparency, lame media hide the parasites in plain view. Notice how the parasites move from govt to business or vice versa without a blink but folks have partisan arguments over more or less govt control, more or less business "freedom". Truth is parasites work both to their advantage. Increase in govt controls warped to do opposite of what regular folks need, competitive, low-fraud, high transparency market, instead regulators advantage crony businesses. Govt agencies should with proper democratic controls would be provide competitive services in economic sectors that lend themselves monopolistic organization, instead they are bloated crony orgs. Limiting govt and allowing business more freedom via no financial oversight, no policing, SCOTUS rulings like Citizens United, Enron bookeeping gets us warped, fraud filled and thug/gang run markets where the lowest, least ethical org wins, only different from anarchic Juarez MX in sophistication and order of magnitude of money extracted. Parasites win no matter which meme takes hold and wins election.

Sun, 04/11/2010 - 10:05 | Link to Comment ZimbabweBen1991
ZimbabweBen1991's picture

We are America and history does not apply to us! The Gubermint will save us, Weimar Ben will come to the rescue. Obama or Palin will save America! Yeah!!!

Sun, 04/11/2010 - 10:33 | Link to Comment glenlloyd
glenlloyd's picture

The picture certainly aint pretty...is it.

Sun, 04/11/2010 - 12:27 | Link to Comment Burnbright
Burnbright's picture

Sadly even these graphs are a very Rosey comparison to reality.

Sun, 04/11/2010 - 10:37 | Link to Comment bugs_
bugs_'s picture

Ponzicare and Ponzicurity.

Sun, 04/11/2010 - 10:39 | Link to Comment docj
docj's picture

And what is plotted here is likely the best case we can hope for.

Time to get back to the range and get some practice with my favorite lead delivery system(s).

Sun, 04/11/2010 - 16:25 | Link to Comment Hulk
Hulk's picture

I went to a public range for the first time in my life, last week, to dial in the Holosite and study its interaction with my flipover 3X scope on the .308. Suddenly a turkey hen made it entrance behind the 100 yard targets.I was getting ready to shoot in front of it when the rangemaster ordered a ceasefire and stand down. 15 minutes later we ran downrange and chased the hen away. Another first in my life, a ceasefire at the appearance of a turkey! Only in Kalifornia!

Sun, 04/11/2010 - 11:07 | Link to Comment Lux Fiat
Lux Fiat's picture

I may have to look into the interest rate assumptions behind CBO's estimates of interest as a percent of federal outlays chart, because if this election year transpires as many in the past have, the deficit projection for 2011 (and quite possibly 2010) is going to get blown out of the water. 

I would expect to see the usual cascade of attempted bribery of the electorate by both political parties that often takes place in the months ahead of elections.  In addition to it's usual forms (some tax rebate, heralded expansion of some gov't benefit, etc.), it may also take the form of short-term bailouts to some constituents (LA perhaps, Illinois?).  These bailouts will have all of the obligatory language of starting financial responsibility, but without any enforcement mechanism with teeth laid out.  

This in turn sends a message to global bond investors that the US is about as sincere about belt tightening and fiscal responsibility as Greece seemingly has been in the past couple of months.  In such an environment, I expect CBO's outyear interest rate assumptions to be wildly optimistic.

2010 interest rate perturbations may just be the warm up for 2011.

Sun, 04/11/2010 - 12:52 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

The biggest _BS_ part of these graphs is the one thing that will affect _all_ of them, the annual expected growth rate of revenues in the CBO graph.  It assumes a real recovery and an annual 6.5% growth in revenues.

I wonder, what is the color of the sky in their world?

Mon, 04/12/2010 - 00:17 | Link to Comment Lux Fiat
Lux Fiat's picture

Rose-colored, I bet.  OMB economic growth projections (from whence the revenue projections flow), have been overly optimistic as far back as I can remember, regardless of administration's political affiliations.  Ramp up GDP projections by .5% and voila, they now have the (fictitious) revenue to cover that new boondoggle.  Ditto for the CPI estimates. 

CBO used to have a greater (but still circumscribed) degree of independence and realism, but I don't think that can be said these days.  We have regulatory capture of the agencies that are supposed to regulate, political capture of those entities that are supposed to be reasonably independent, and corruption of those that are supposed to represent the populace.  I look forward to the day when voters decide it's time to put up a "Under New Management" sign.

Sun, 04/11/2010 - 11:21 | Link to Comment Janice
Janice's picture

Plant fruit trees!  www.arborday.org

 That way you'll have some fresh fruit to go with your cat food.

Sun, 04/11/2010 - 11:31 | Link to Comment Amish Hacker
Amish Hacker's picture

We should all be fine, as long as no one gets old, sick or injured.

Love the graph that shows discretionary spending going to let's-call-it-zero percent of total outlays.

Sun, 04/11/2010 - 11:48 | Link to Comment Marvin_M
Marvin_M's picture

hmmm, very curious...very interesting...

http://www.youtube.com/watch?v=Cwxc_zLH560

Sun, 04/11/2010 - 12:22 | Link to Comment stickyfingers
stickyfingers's picture

To paraphrase Hemingway, empires collapse gradually, then suddenly.

Sun, 04/11/2010 - 19:42 | Link to Comment JW n FL
JW n FL's picture

People commit suicide, gradually, then suddenly.

 

Crazy, people quotes? Really? OOOOOOOOOOOOOOOOOOOO! the genius wasted!

Sun, 04/11/2010 - 23:23 | Link to Comment Almost Solvent
Almost Solvent's picture

Yup, just like alcoholics & smokers.

They are committing suicide gradually, then they die (suddenly if they are lucky. Slow and cancerous if not.)

Sun, 04/11/2010 - 12:49 | Link to Comment Heroic Couplet
Heroic Couplet's picture

Please include defense spending, the repeal of the Bush tax cuts to the wealthy, and the closing down of offshore tax accounts. You manage your money by managing your biggest expenses first. Health care is billions. Defense spending is trillions.

Sun, 04/11/2010 - 13:28 | Link to Comment Dirt Rat
Dirt Rat's picture

But the Iraq War will pay for itself!

Sun, 04/11/2010 - 13:20 | Link to Comment Older Than Dirt
Older Than Dirt's picture

 

The comments thus far are on point. If you have had “earned income,” then you have skin in the game of Social Security & Medicare. It was not a choice – the Federal Government just took it. The only questions are how much & for how long? By my handle, it’s obvious that I’ve got lots “invested” in this issue. So, I’ll repeat a post from a few days ago on this site in response to a post by a justifiably angry fellow citizen.

_________________________________________________

A reading of the complete Act clearly shows that it was intended to be PARTIALLY a "redistribution of wealth.: "

The Social Security Act (Act of August 14, 1935)  [H. R. 7260]

An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws "

However regarding "Federal old-age benefits", the Act states in Title II Federal Old-Age Benefits - Old-Age Reserve Account:

"It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals.  Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States."

So, even if we allowed that the "excise tax" on employers was to be devoted to the "social welfare" aspect of the Act, the payroll tax on employees was to be:

(1) Funded in "the Account," and

(2) Invested in "interest-bearing obligations of the United States," i.e. Treasuries. 

Neither of these requirements in the Act were carried out!.

 Various Congresses - both "R" & "D" - spent the tax revenues deducted from employees over years. They're still doing it today. So, if you really think that you're paying for grandpa & grandma, it's true only in the sense that this has been the biggest Ponzi scheme EVER! It makes Charles Ponzi & Bernie Madoff look like pikers!

Just for "grins," I downloaded the rates on Treasuries from Federal Reserve's site. Data was only available since 1962. Then, I had to manually input data on income caps, & FICA tax rates from the Social Security site (they're a BIT behind the times technologically - no download to a .csv file, e.g.). Averaging the 5, 10 & 30 year Treasury rates & applying it to the taxes withheld (based on 25%, 50%, 75% & 100% of the income cap), the compounded amounts over the period from 1962 to the year I "retired" were significant (big bucks!). Then, I deducted "benefits" from that point & "re-compounded" the balance. I'll be "in the 'black" for a long time. I used only the employee tax not the employer excise tax. I figured that was for "social welfare."

I don't want welfare - just what's due to me. That's probably what most "regular" folks that played by the rules want as well!

If the U.S. government can get us going at each other's throats, e.g. young vs. old, the game is over! Hell, it probably is anyway. 

 

Sun, 04/11/2010 - 16:00 | Link to Comment three chord sloth
three chord sloth's picture

"I don't want welfare - just what's due to me. That's probably what most "regular" folks that played by the rules want as well!"

But you see, that's impossible in a wealth redistribution scheme. If the workers and savers get their money's worth then there's little to hand out. On the other hand, if we support the poor and marginally employed up to a "decent" level, then everyone else gets shortchanged.

Washington pretends they can do both by running deficits to pay both sides "fairly"... but that can only go on so long.

Sun, 04/11/2010 - 22:47 | Link to Comment pan-the-ist
pan-the-ist's picture

I find peoples ability to rationalize their salaries humorous. It is one thing to be a welfare queen and collect other peoples money, the other side of the coin is people making 6 figures or more who believe they deserve that salary.  Doctors, yes.  Engineers, yes.  MBAs - not a fucking chance.

Back on point, it is young vs. old.  You old fuckers have had plenty of time to fuck up the country and succeeded marvelously.  The reason medicare is the third rail is all the seniors vote -- AARP.  Seniors would never pay for health insurance even if they can afford it.

Sun, 04/11/2010 - 13:41 | Link to Comment jdrose1985
jdrose1985's picture

Is there really a future worth having in this country? I'm an eternally determined optimist yet I can't find anything to be upbeat about.

What's sad is...people nearing retirement age can't seem to grasp hold of the notion that a nightmarish scenario stares them in the face. Nothing is written in stone but why not be prepared? I've given up on talking to people about it due to the overwhelming number of blank, lifeless stares.

Sun, 04/11/2010 - 15:02 | Link to Comment Older Than Dirt
Older Than Dirt's picture

IF we are to have a "future worth having in this country," it will be a painful & protracted FIGHT to get there.

To change the "way that they make sausage" in government, we need BEGIN to:

  1. Inform ourselves on the issues at hand. First, this requires familiarzing ourselves with the laws whereby we - AND THEY - are governed. As an aside, it didn't take more than a few days to review the U.S. Constittution, the Articles of Confederation, the Federelist & Anti-Federalist papers and relevant Supreme Court decisions (particularly with regarding the Commerce clause in Article I Section 8 of the Constitution). IT AIN'T ROCKET SCIENCE & doesn't even require a law degree.
  2. IF you have a representative (or representatives) that has (have) both a working brain & what seems to be a sense of responsibility to both his/ her/their contituents, contact him/her/them. Normally, a phone call will get a relatively young, pleasant person on the line who is there to say "Yes/no sir - or ma'am" to whatever you/we say; but, I try to engage them personally & express the issue(s) concerning me succinctly & rationally. If there is more than 1 issue I want to discuss, I ususally write them out before calling. It's easier for them to record things (they usually do) for their report to the representative. Give 'em BULLET POINTS!
  3. Support changes that may, over time, return this country to US. Frankly, over 200+ years to date, it's never been that way except nominally. If we want it, we've got to be smart, informed, persistent & tougher than nails.

The Feds MUST:

  1. Book the liabilities. That may sound obvious, but it's Accounting 101.
  2. Fund the liabilities. This will require changing priorities BIG TIME; but they owe all of us what is due BEFORE any other grand notions that they may have! It's "do-able." The Fed purchased 300 billion in Treasuries & 1.2 Trillion in mortgage backed agency securities last year alone. Let's commit that dough to the outstanding UNFUNDED liabilities like SS & Medicare.

If that all of this sounds "pollyannish," think of the alternatives.

I'm on the "back nine" of life; but I plan to live a long time. I'll FIGHT politically & economically to protect what is mine AND what is OURS for all those Americans who particpate in our social contract.

Sun, 04/11/2010 - 16:05 | Link to Comment Older Than Dirt
Older Than Dirt's picture

Apologies for the typos & grammatical errors in the above post/reply I submitted.

I was multi-tasking at the time (that's a technological euphemism for trying to do more than I could handle at one time & winding up doing nothing particularly well!).

Sun, 04/11/2010 - 19:47 | Link to Comment JW n FL
JW n FL's picture

You are doing well... no worries! keep up the half ass, whole ass... multi-tasking... whatever, it is a quality view(s). Speeling be damnd!

Sun, 04/11/2010 - 22:49 | Link to Comment pan-the-ist
pan-the-ist's picture

"Keep your government hands off of my medicare."

Sun, 04/11/2010 - 15:51 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

If this were truly a dictatorship there would be some or another federal program which would provide T-4 like services for baby boomers. War is not a solution with such high level of worldwide integration and inter-dependence  and would only result in subsequent population boom after it is finished. Also the worldwide resource depletion which would be necessary to wage such a war would make it worthless from the beginning. Death panels, or whatever the term is, might be the best solution for the situation.

[No one said rationality is without its flaws]

Sun, 04/11/2010 - 22:53 | Link to Comment pan-the-ist
pan-the-ist's picture

We shouldn't need death-panels.  Any responsible senior should understand that they are leeches and are bringing the country down.  The last year of life is the most expensive in terms of health care. Responsible seniors should do what is right on their own.  Rather than make that last year of their life so expensive, they should give Dr. Death a call and go out with dignity.

I am kidding.  Sort of.  Okay, not really.

Sun, 04/11/2010 - 23:33 | Link to Comment Almost Solvent
Almost Solvent's picture

There was an episode of the twilight zone or sliders where the 'lottery' winner was killed but their family got paid millions as a population control scheme.

Anyone age 55+ should be able to elect death in exchange for lump sum payment of 60% of their scheduled SS benefits to their designated beneficiary.

Sun, 04/11/2010 - 16:25 | Link to Comment Mark Beck
Mark Beck's picture

The "what if" capability of the CBO is pathetic. But, like the CRS, they do not want to be the bearer of "really" bad news, or congress will shoot the messenger.

Rule #1 for Government officials:

To be defensible, crisis must be a surprise.

The problem is the CBO does not provide a range of possibilities based on a spread of risk factors. In other words their assumptions are scaler in nature, assigned single values.

Because of this they do not see, or do not make public, areas of sensitivity. The smoothly chaging future projections are obviously somebody's, pull a curve out of your ass, guess. Devoid of any disruptions we call the real world.

What are the CBO assumptions that produced the projections?

Are we to rely on the CBO to produce an accurate forecast?

What if the CBO assumptions are wrong or incomplete?

Better yet, after presenting this data, even in its current form, will congress act?

At what point in time does an investment risk model, factor in political and sovereign factors?

-----------

Price is what the market demands, in an environment of free market equilibrium. We no longer live in the world of applied economic academics.

We now live in:

How and who will pay. The allocation of limited resources, and the effective retirement of debt.

Once again in our nations history we live in a world of unsound money policy. Without sound money the nation cannot be strong.

----------

Could it be that Ben Bernanke ultimately will be known for the subversion of credit. Well meaning destruction of what he was entrusted to protect? A failure to understand sound money?

What has he brought to the alter of credit, if not on its behalf? What lays bleeding before him? His true sacrifice.

THE USD.

Mark Beck

Sun, 04/11/2010 - 16:32 | Link to Comment markar
markar's picture

What's sad is...people nearing retirement age can't seem to grasp hold of the notion that a nightmarish scenario stares them in the face. Nothing is written in stone but why not be prepared? I've given up on talking to people about it due to the overwhelming number of blank, lifeless stares.

 

Show them this--financial meltdown for dummies-in less than 15 minutes

 

http://market-ticker.denninger.net/archives/2179-The-Federal-Con-Job-wDy...


Sun, 04/11/2010 - 17:15 | Link to Comment Older Than Dirt
Older Than Dirt's picture

Going from the specific to the universal is fraught with problems -- mainly that the generalizations thus drawn are not totally correct. The degree of correctness/incorrectness is what must be explored.

I've seen plenty of "gummers" that disgust me; but, the same could be said from any subset in any of the generations still taking up space and resources without adding much, if anything, to the "commonweal."

Are there plenty of "sheeple" in the world? Yup! How about this country? Again, Yup! How about our state, city, neigborhood? The answer is the same -- unfortunately YEP!

Are we in deep s**t in the old U.S.A. financially, politically, culturally,,,? You betcha! (tossed in a "Palinism" just for grins).

Financially at least, one difference between the Federal government & the rest of us is that FOR THE TIME BEING AT LEAST, they can reallocate & CREATE resources; however ethereal & insubstantive they may be (dollars anyone?).

One of the FEW advantages of being "Older Than Dirt" is that, over the lifetime, thus far, I've done the accounting, mathematics & business "things" for over 40 years. I know the type of buggers that have gotten us into this seemingly inescapable pit! They're generally not that smart & not that tough!

Option 1: Give up. Find your favorite drug of choice, curl up in a corner in the fetal position & wait until the end.

Option 2: Fight like Hell! Politics & economics/finance are our only viable weapons. I've read & heard some folks on this and other blogs talk about getting their weapons & survival gear ready. Fantasy Island kiddies. You'd be toast in a hurry!

I choose Option 2. It would be one Hell of a fight, but that's what makes life FUN!

Mon, 04/12/2010 - 04:56 | Link to Comment xynz
xynz's picture

I'm not a huge fan of the Clinton Administration. He and the rest of his DLC "New Democrats" decided to become economic "Republican Lites". Along with the economically irresponsible (and fundamentally incompetent) Republican Party, he helped create the mess we're especially for signing the repeal of Glass-Steagal (GLBA) into law.

However, I find it very curious that the retrospective presented in this article conspicuously omits the budget surpluses during the Clinton Administration. The charts on Social Security and Medicare cash flows, along with the charts on types of spending, all go back to 1970.

But the chart on Federal Budget deficits only go back to 2004.

If the Federal Budget deficit chart was shown along with everything else, then it would show that the Social Security and Medicare cash flow problems coincided with the Bush tax cuts.

FDR raised the marginal tax rate for top incomes to 90%. His massive Keynesian intervention coincided with economic recovery. The only time the recovery faltered, was when they thought they should throttle back the Keynesian intervention to balance the budget. Then WWII came along and kicked Keynesian intervention into high gear.

The point is, that raising the marginal tax rates on the wealthiest Americans to nearly 90% did not lead to economic doom. The American economy did fairly well, until Nixon decided to abrogate Brenton Woods in order to continue a ruinous war (sound familiar?). America's growing dependence on foreign oil was also a major cause of the recession that Reagan inherited.

Reaganomics were simply a distorted version of Keynesianism: stimulating the economy through deficit spending on military hardware. Unfortunately, he began a trend of institutionalizing the deficits by cutting the top marginal tax rates. This led to a tax cutting trend which helped to produce wealth concentrations that we haven't seen since just before the Great Depression....and voila: we now have the Great Recession.

The health of the economy has always been based on the health and expansion of middle class, not on the health and expansion of the upper class. In the lead up to the Great Recession, while the middle class was losing ground, there was an unprecedented explosion in the massively wealthy. If having so much wealth in so few hands was such a great idea, then we wouldn't have had our economic meltdown. We now have the empirical evidence which conclusively proves that "Trickle Down" really is voodoo economics.

We can easily afford to pay for Medicare, Social Security and Keynesian stimulus; all we have to do is tax the thieves who've been raping the economy for the past three decades. We probably don't even have to be as drastic as FDR: a top marginal tax rate of 49% will probably do the trick.

FDR proved that tax and spend does a very effective job of growing the middle class and the economy. His tax and spend policies led to a huge increase in prosperity for middle class Americans. Reagan/Bush/BushII have proven that tax cuts for the wealthy, lead to a huge increase in prosperity for upper class Americans, but at the expense of middle class and the overall health of the economy. Institutionalized tax cuts and deficit spending is the economic equivalent to steroids and amphetamine: it seems to work for awhile, but the inevitable crash is brutal.

Tax and spend will still work in the modern, global economy. The economic health of the social democracies in Scandinavia prove this fact. They have the highest tax burdens in the OECD, exceeding 50%, while the lowest tax burden in the OECD is Mexico's 18%.

According to orthodox neocon economic "theory": Mexico should be an economic paradise, while Scandinavia should be a wasteland.

The evidence is very clear: the US can tax and spend its way to a prosperous economy. But private campaign finance and media consolidation have so thoroughly corrupted the democratic process, that it's probably going to be impossible to implement such a program. So the US will continue its slide towards a Third World distribution of wealth along with its concomitant slide towards a Third World society.

Wed, 04/14/2010 - 19:22 | Link to Comment whiskeyjim
whiskeyjim's picture

The CBO budgets are terrible; no recessions, fantastic GDP growth, and amenable interest rates and no negative surprises.  If they sold business plans, they'd be out of business.

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