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Bad Choices
If two people are dying from liver disease, one 25, the other 65, and there’s only one liver available for transplant, the old one dies.
There’s one economic variable that’s highly predictable; demographics. In all of the industrial countries the aging population is now weighing on the economic outcome. Japan was the first country to go down the tubes from this phenomenon. Europe is behind Japan, but rapidly catching up.
The US has a huge headache with an aging population. The number of oldsters is big, and rapidly rising. Add to the size of the aging US population the fact that the promises made to these people are enormous. Other countries, like Canada, Russia and even China are struggling with the problem.
The USA is in now in year three of what will prove to be a twenty-year mega-trend of an aging population. These facts have been know for a long time, I’m amazed that the US has been so slow to come to grips with the implications of what is clearly in our future. Thanks to the Fiscal Cliff debate, the financial implications of the graying of America are now being discussed, and Washington is talking about “solutions”.
So what are the solutions that the deciders are zeroing in on? Simple. The proposals (and what we will get) are extensions of the ages that benefits become available. Both sides have suggested that pushing out the age for Medicare and Social Security benefits for an additional two years is appropriate. The Administration has said it would be willing to do this; John Boehner (and other big Republicans) has flat-out insisted that it happen.
At some point in the next year (I don’t think this will be part of the fiscal cliff resolution) the eligibility changes will take place. The changes will be phased in over 10-15 years. When the ink is dry on the new laws, the bean counters in Washington will declare success. The end result will be a 3-4 year extension of the lives of both the Social Security and Medicare Trust Funds.
Where does this “fix” take the country? That’s easy to forecast. Older people will be forced to stay in the workforce for years longer. The retirement age will be pushed out, the benefit checks will also be smaller on a relative basis. (There will be cuts to inflation adjustments) Once again, the deep thinkers in D.C. are “okay” with making old folks wait for a few years for benefits; the thinking is that people live longer, so make them work longer.
My fear is that the solution to one problem is going to spill over and aggravate another problem. The fix on retirement benefits will cause a long-term erosion of youth unemployment. That outcome could prove more devastating than the aging problem.
Its not hard to find evidence that these big trends are already moving the needle. Last Friday’s NFP is a case in point. Zero Hedge has the details (Link) and (Link). This chart shows what happened in November. A disaster for those 22-54, the 55-69 group were the winners.
It wasn’t just November. Consider the changes since 2009.
What does a government do when it is faced with high youth unemployment? It sends them to school with borrowed money. This won’t work much longer:
This is the worst kind of whack-a-mole problem solving. Washington will take steps to address the fiscal consequences of the aging population, but those steps will create a multi-decade drag on what is already a serious problem.
We are far from the point where rules on transplants should apply to choices on economic policy, but we’re getting closer. The policy choices that are being made today are running counter to the rules on transplants. They favor old over young. We are a long way from being balanced on this issue; longer still toward policies that actually tip the scales to the next few generations.
If you asked the question, “How do we create opportunities for younger workers?” The answer would be to lower the retirement age. Create the opportunity for upward mobility. We are on a path 180 degrees in the opposite direction.
I don’t see a way around this. Demographic changes are powerful forces. The problem is we are on the third rung of a twenty-foot steep ladder, and we’re already making bad choices.
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The full benefit retirement age already is >65 if one was born after 1938. It ramps up to 67 for those born after 1960.
Why bother with this? They will expand Obamacare(already took billions out of Medicare), introduce the Independent Payment Review Board and, voila, massive die off of the elderly.
FORWARD OBAMA'S MERCY AND LOVE!
I damn near died in 1999. A liver transplant was considered as mine was shot, (the result of a systemic infection, not drinking).
There is a long wait, there is a list in every state. Preference is given to younger people (as it should), money is not a criteria (nor should it be).
Knowing this, and wondering what it might mean to me, I looked further.
One can go to China, get a liver transplant in a first class hospital. The rehab is in AAA hotels, the 1st class airfare is part of the package. In 99' the cost was $100k, in advance, no insurance coverage for that.
The story, back then, was that the livers came from prisoners. Others said the availability was due to the high mortality rate from car accidents.
Fortunately, I never found out. I got better. I think it is up to $200k now.
So yeah, money comes into the picture. It always does.
b
The issue of who gets costly and limited treatment is very complicated and age alone is a poor criteria. For example, if the 65 year old is Albert Einstein or Richard Feynmann then their contribution to society is many orders of magnitude (true even when they were age 65) of an average 25 year old scientist much less ordinary citizen. The decision should ideally always be based upon individual talent and ability, not some generic group criteria like age. This is also why the employment rate is so much better for the 55+ cohort. They have more ability, experience and talent to offer. There is a true dumbing down of America with each generation as I discover whenever I interview potential graduate students or post-docs for my research group. The lack of a strong work ethic is a major shortcoming of the younger generation.
"organ harvesting" rings have global tentacles, and if you believe it's only "China" that profits from this, you're not paying attention.
just watch where any major disaster, like, say the Haiti earthquake happens, and who is on the scene immediately, and where those "aid" planes fly home to. . .
run by the same folks that see humanity as a big ole farm to profit from.
Organ harvesting of "political prisoners" in China is a growth business. Complain about being a slave at FoxConn making iCrap and you get a $0.50 bullet in the head while the "doctor" is cutting out your vital organs before you are dead. Apple directors like Al Gore support this.
Hope & Change. Forward. People over 50 will not make it in the near future but that is part of the "plan." You f**ks voted for it. Nice job. Keep watching TV and Hollywood's crap because your viewership keeps em in power.
yup
Privilege and power trumps all rationality. Always.
One is a sixty-five year old member of Congress and one is a kid.......
Sorry kid.
how old was the cowardly lion *cough*dickchain-y when he finally got his heart?
.....David Crosby.
Money talks. Always has, always will.
Yeah, but that was a FAKE. If you want a fake ANYTHING, the government can cough that up for you with a well written press release.
Dickie isn't a real person. He's an advance form of the technology reputed to have been used on the moon landing videos.
the old fuckers get out and vote- and what do you think they are gonna vote for? more free shit fo me
Cue the buttwipes, whining about how they already paid into the Social Security system...
What hostile young folks like Stychokiller don't realize is that we older buttwipes cunningly made your education so dumbed down that almost none of you have the brains to find your way out of a paper bag. And its too late to get smart. Ha - the jokes on you. But then you're probably not smart enough to realize you've been had. Enjoy those jobs cleaning our bedpans. Sincerely, Buttwipe.
TOO FUNNY!!!
I've been wasting my time trying to logic with them. May be if they spent less time with guitar Hero and Grand Theft Auto, they'd have a better chance at passing these costs onto someone else.
How come no one ever suggests cutting Welfare? That is really just "lifetime unemployment". Those losers NEVER paid into anything. They're NOT disabled, they're NOT just suffering a temporary employment setback.....they're just being paid NOT to work. REDUCE their benefits every time they have another child.
Remove the "cap" from SS. Anyone making $108K+ can afford to continue paying in their SS tax. Let's "means test", lots of retirees have tons of money, they don't need the measly pension offered by SS. Pick a good dollar amount for them to NOT get SS benefits. Push the "full retirement" age back a couple of years.
How about "defunding" whatever programs were instituted with the stolen SS funds???
I'm just trying to help you kids out, because ANY plan offered so far doesn't affect anyone over 55. (That's the ENTIRE baby boom generation, for you bad-at-math kids)
I'm getting mine! Good luck to you "F***-my-parents" kids. HA
Stychokiller: qu'est-ce que c'est?
I'm going to see the doctor this morning to get a steroid shot in my back after planting too many apple trees this weekend. I'm too old for this crap. I plan to retire in a few years. And yes, I've been paying FICA taxes since I was 16. Over 40 freaking years. Honestly, I'd much rather have been allowed to keep that money and put it toward my retirement myself, but the truth is that Gubmint Cheese needed that money from me to help pay some earlier retiree's benefit. It's a huge ponzi, because they included beneficiaries who had never paid in a cent, for one thing.
The gubmint ought to keep its nose on its face, and not in other people's business.
We do/did pay into the Ponzi. It was the politician, ever trolling for votes, that expanded the system to do things it wasn't designed to do(like subsidize alcoholics as disabled) without taxing to cover the cost. Now, the costs are catching up, yet ,as understood, the old bastards who did this lived nice lives and handed off their seats to their kids and friends.
The suckers who thought it was helping, if still alive, wil be getting a wake-up call shortly. I think Obmao means to "off" as many oldsters as he can. So rejoice that Mom and your favorite teacher are in his cross hairs.
FORWARD AGIST GULAGS!
FORWARD CULTURAL REVOLUTION!
Chuck - your comment fails to recognize that there isn't an external evil doer here. Those politicians, ever trolling for votes as they are, trolled them from you.* And all those kids and friends who are being stuck with the bill went along because they figured the costs would be paid by someone else.
* By you, I don't mean you individually of course, but rather the collective you.
"Chuck - your comment fails to recognize that there isn't an external evil doer here."
Baloney!! There are a significant number of past and present evil doers involved in setting up our SS problem.
The single most nauseating aspect of our national debate is that those who are destroying our country are allways labeled "well intentioned"
I don't recall being given any options regarding that FICA deduction over the last forty years of my working life...and I'm pretty sure my employers were in the same boat when they were forced by the law of the land to match the FICA amounts automatically deducted from my paychecks.
yours,
buttwipe #1
Well said. The greedy, compassion challenged, predatory capitalist ASSHOLES that curse serious articles with idiotic and infantile comments about how "it was all the boomer's fault" will GET THEIR'S (and I don't mean retirement...) when they reach our age.
Didn't Chile give people the option to leave their version of SS?
The vast majority left.
From what I've read you can must participate in a retirement account in Chile. There are apparently several state approved mutual funds. Note a said approved not owned.
it wouldn't be a boomer-the most pampered, overprivileged, narcissistic, you-fucking-people-owe-me generation in the history of man if they didn't point the finger everywhere else but at themselves.
"the most pampered, overprivileged, narcissistic, you-fucking-people-owe-me generation in the history of man" title belongs to you kids.
The "we shouldn't have to pay the same tax everyone before us paid", "I shouldn't have to repay my student loan because I can't find a job, now", "It's perfectly OK for me to walk away from my mortgage because it isn't turning out to be the great investment I thought it was", "It's OK not to honor my mortgage contract with the bank because they're just crooks, anyway", generation.
YOU people CAUSED this recession.
(How's that for blindly branding an entire generation?)
And pointing fingers improves everybody's life how, exactly?
Who are you pointing the finger at? You sound like a victim. What are you whining about anyway. Your mama is letting you live in her basement isn't she.
I'm just saying it would have been nice to have been given a choice on my first go around forty years ago...something like this maybe:
A) I wish to participate in the SS System
B) I decline: Please have my employer's 'contributions' added to my pay and I will choose how I will plan for my retirement age
But noooo...
btw being born in 1959 the system was already in place and I could have had no input in the process, voting or otherwise.
The fucktards that argue for cutting SS benefits don't even see the inconsistency of their argument so there is no reason to even discuss this with them. These folks can't change the gov't today but somehow the folks who were involuntarily enrolled in the program and had their earnings impounded somehow did this with consent and malice aforethought.
That being said, I'll tell you exactly when I'd be in favor of changing the entitlement system. That would be right after we get a no bullshit audit of the FED and track down and recover the circa 27 trillion in funds that they pushed out the door after 9/11 and 08. After that they can figure out where the 2.5 trillion went that Rumsfield reported on 9/10, hours before 911 happened. Then they can cut back the military budget and shut down the 800+ international bases that we have our forces deployed to. We can blow up the world 10 times over but somehow we need a military slinking around the world sticking their noses into everybodys business?
As soon as this is done then they can show us the real numbers in off budget programs that they seem to be able to fund without issue. Black budget items like the CIA and other bullshit programs that do nothing but create tension and wars throughout the world. Show us these items and defund them. THEN show us the books and lets see the problems that entitlements create. If we are still in a deficit then we can talk about changing this system.
You guys allow these fuckers to change the discussion every fucking time and allow yourself to get distracted over the real issues. Wake the fuck up and don't allow them to divide and conquer us.
Heap. Strong. Medicine.
Stop arguing about whose at fault.May as as well chase windmills.
Remember how we got to this sorry state.
What is unsustainable will cease.
This is where we ALL are now.A reversion to the norm throughout history.
Only people involved in hard manual labour should ever be allowed to retire.
They will die off prematurely anyway, according to acturial stats.
Everyone else;,work till you drop.As it alway was.
All be the same in a hundred years,unless these lessons are leared ,and passed on.
So after we've dealt summarily with the bankers.and politicos,the current "teachers"
are next on the list.
Thanks winnie. I too grow tired of the complaints. The same that complain probably continue to vote for whatever politician says they will fix the system.
Let it die and lets all cut our losses and move on. Ain't no one gonna get their money back. Accept it.
These guys are flogging a quart can of glue.The horse is long gone.
Get over it everyone.None but a lucky few will get anything from the
Govt.except maybe a hollowpoint to the head.
+ 911
The problems today go back to 1983 and the Greenspan Commission.
They knew the boomers were coming, so there was an attempt to create a "savings account".
Turns out, Social Security invested its money with a bad credit. The USA.
America pays interest on its debt, it can do that from tax revenues. But the USA CAN NOT pay back the principal on its debt. We just roll over all the debt,
EXCEPT:
Social Security, Medicare, Military Retirement, Federal Workers Retirement
The total of "savings" in these "things" is $4.7 Trillion.
Here is the problem, all of those things are now sucking down principal. They have their hand out for the whole $4.7T.
Like I said, we can pay interest, we can't pay principal. So what will it be???
it is hard to broke when you have no debt. But the FED & gubbermint figured out a way to screw you anyway - higher taxes, negative yields and stagflation.
I don't know Bruce, but even at 53 I'd just like to get out(stop that FICA deduction from my current income) and walk away. Also meaning I'd expect nothing when I turn 62 1/2 or whatever age.
What are my options, besides converting to being Amish or quit working altogether thus earning no income to be FICA taxed?
Did you learn this external locus of control or were you simply born with it? Can you change it?
I'm trying to unlearn it...
I guess I could always go full Amish.
Amish are exempt from ObamaCare and so are muslims. It is a Jizya or tax on infidels.
You've finally nailed it. Obama was born in Intercourse, PA and he's out to screw you Amish style and make your old lady wear a bonnet.
Wrong on Muslims Freddie. You might want to check Snopes before you pass along the entertainment you hear on Fox as actual fact.
http://www.snopes.com/politics/medical/exemptions.asp
You should see the entertainment they have on the other "news" channels. So much they don't even bother with the inconsequential stuff like Fast and Furious or what ever happened in Benghazi. You keep it up with the occupy cliche's, though. I'm sure that(fox/faux news line) is a good smackdown among your fellow herd-mates.
All mainstream media is run by corporations with agendas. It will occasionally provide some real news, but understand it's an entertainment vehicle to sell commercials. Entertainers on CNN, MSNBC, Fox, etc. are all lackeys for their respective corporate masters. Break out of the red team, blue team herd mentaility. Both sides work for the same team.
just talkin about tv news. all are lackeys, but the faux news one is the cliche I see repeatedly. If one were to get their news from tv, fox would be your most accurate source. Maybe not sayin much, but it is what it is, as they say...
Also as far as the red team blue team schtick... There are statists and there are free marketeers. Call them what you want, but they exist. Which are you? They do not work for the same team. Pick a side.
There is no free market with unabated corruption and no rule of law. There is only oligarchy.
The political system was captured years ago. The slick veneer you see as part of the political machine is a sham.
I believe in free markets, but I don't fool myself that the Republican party supports free market economics. They are lackeys for international banks and corporations. There is no choice in the US two party system.
Who said anything about the republican party? Or the other one?
And yes, you are right about the state of free markets and the oligarchy. That is because of statists. 1/2 the people you encounter each day want the oligarchy; or the state in whatever(communist/socialist/fascist/democrat/repub) form it exists. So there is a difference. Where do you stand?
Who "listens" to Fox? I just watch it for the blondes and the legs.
But... but... Orielly doesn't have blond hair... ;-)