The major spit storm over Wisconsin Congressman Paul Ryan’s national budget has already begun. Nobody thinks that Ryan’s budget is perfect but everyone understands its importance as a starting point in several debates needed to save the nation.
Unfortunately, there is also the political dynamic. GOP leadership has claimed ownership of Ryan’s work so this becomes a potential political world war. The budget is extremely threatening to both sides. It could bury Democrats as tax and spenders unable to govern or it could be suicide for Republicans who intend to kill grandma and create starving hoards of homeless Americans.
Commentators and activists on the left have already selected the low road. Congressional Democrats are still thinking. This is tough for Democrats because while Ryan’s budget cuts benefits that people like, a balanced budget that keeps the benefits has to massively raise taxes or cut benefits more modestly and still raise taxes. Tax and don’t spend Democrats?
We await Obama’s reaction. Will he lead; present some sort of left side budget balancing alternative? Or will he demagogue the issue and set the stage for the election campaign.
If President Obama selects the latter strategy, I believe Americans should replace him in 2012 even if the only option from the Republicans is Alfred E. Newman – which is all that’s on offer so far.
At some point, the center must become seriously engaged. At the moment in this gerrymandered, primary rigged world, the only option available to us as voters is punishment. And we should use the tools at hand. Throw the bums out. If the new guys don’t get it, throw them out too. Let’s stop worrying about what might happen and move to straight referendums on results.
America is in fiscal trouble. The problem is that people want more government than they are willing to pay for. The depth of the issue is nation ruining and it is contained in two entitlements: healthcare and social security. If the lying liars won’t stop lying and start doing, then they have to go – we can fight about abortion and food stamps, energy and climate, later – if we’re still here.
There are plenty of people on both sides of the spectrum that want to address the problems – we need to find a way to give them control.
Consider this from the Brookings Institution [liberals], “The United States already has a particularly strong age bias in its government spending. In the years ahead, spending on the elderly … will crowd out spending on the young.” A former Treasury official in both Democratic and Republican administrations says simply, “We have a budget for a declining nation.”
The Treasury guy and a colleague from the Urban Institute [liberals] have carefully compared Medicare taxes and benefits.
The report is here.
The bottom line is that nobody pays enough Medicare taxes today and the numbers are stark. All of the figures quoted below are from the report which adjusted everything to 2010 dollars for comparison purposes.
A two-earner couple, earning average wages and retiring today at age 65, will have paid $140,000 into the Medicare system – including all money paid by their employers. During their remaining lifetime, the couple will draw out $340,000 in benefits.
A boomer couple earning the same and retiring at 65 in 2030 will pay in $171,000 and draw out $530,000.
My parent’s crowd who retired in 1980 paid in $16,400 and drew out $132,000 [and counting].
How long can this system last?
Social Security? Some people think that this is a retirement program others understand that it has always been a combination insurance plan and entitlement.
If our imaginary couple retires in 2010, they will have paid $741,000 in social security taxes and they’ll get back $645,000. A lousy deal for a retirement program; let me keep my money, anybody could do better than that even with recessions.
As an insurance program it’s better. Thank goodness they weren’t disabled young and forced to draw out much more than they paid in. But at $100 a month, each, for their entire 40 year working life, I’d get a quote on a disability policy and an annuity from a private insurance company. The policies might have been cheaper.
Our boomer couple will pay in $1,019,000 by 2030 and can expect to get $795,000 back over their lifetime.
It was always thus. That old school couple that retired in 1960 paid in $41,000 and got back $19,600.
Please note that while folks retiring today have already paid their way regarding Social Security, Congress already spent their money. We will have to borrow the money to pay them. People who say otherwise are liars.
Government just doesn’t manage anything well.
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