Careening toward catastrophe

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Remember the groundswell of public outrage last month about taxes? "Tea party" protests crisscrossed the whole country.

So where's the outrage over the looming crisis surrounding Social Security and Medicare?

Trustees of those two bloated entitlement programs updated America on their status last week, and the latest projections are even worse that had been previously predicted.

Starting in 2016 -- a year earlier than projected -- Social Security will start paying out more in benefits than it collects in taxes. In 2037, the huge trust fund will be depleted -- that's four years sooner than was expected.

And Medicare? The hospital expenses program will pay out more in benefits than it collects this year, and is expected to be insolvent by 2017.

This is huge -- a huge disaster.

Last year, the first 3.2 million baby boomers starting drawing Social Security; over the next 20 years, 80 million more will be eligible for government-sponsored retirement benefits.

It's estimated that, by the year 2030, two U.S. workers will be forking over payroll taxes for each U.S. retiree. In 1945, 42 workers contributed to each retiree.

And the unfunded liability for these entitlements are climbing annually by the trillions.

The ballooning cost of retirement and health care is being unfairly pushed off on our children and grandchildren.

Quote: "The squeeze on the federal budget will begin as the baby boom generation starts to retire. Actions taken today can ease both those pressures and the pain of future actions."

That's from David Walker, former U.S. comptroller general and head of the Government Accountability Office.

And that quote is from 2003 .

The government has known about this encroaching calamity even for years before that -- and next to nothing has been done.

Economists sounded similar calls of alarm in 2005, and were greeted by this response from now-Senate Majority Leader Harry Reid:

"(T)he so-called Social Security crisis exists in only one place: the minds of the Republicans." According to Reid's tea leaves, "Social Security continues to be strong and remains on solid ground for decades to come."

What a stunning lack of prescience. That quote could rank up there with the words from renowned economist John Maynard Keynes: "We will not have any more crashes in our time." He said that two years before the stock market crash that preceded the Great Depression.

Before you write off these warnings of danger to partisan finger-pointing, know that Walker was a Clinton appointee. And to Walker's credit, he spent the last part of his term as comptroller general, under a Republican president, traveling the country giving presentations about the unsustainability of America's fiscal habits.

The same formula that helped bring down the Roman Empire, Walker has said, is shaping up to bring down America.

The longer action is put off, the more severe -- and costly -- the solution becomes.

And the solution certainly won't be arrived at through the drunken-sailor spending slated for the federal government's foreseeable future.

Our lawmakers should not allow this country to careen into disastrous insolvency.

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patriciathomas
42
Points
patriciathomas 05/17/09 - 08:41 am
0
0
MarathonGirl, is it just me,

MarathonGirl, is it just me, or do you seem to come down firmly on both sides of all arguments?

Grasshopper
7
Points
Grasshopper 05/17/09 - 08:44 am
0
0
Give the ignorant enough rope

Give the ignorant enough rope and they will hang themselves, just evolution at work Marathon Girl.

apex24
0
Points
apex24 05/17/09 - 08:44 am
0
0
You can't tell Leftist Libs

You can't tell Leftist Libs anything about how bad things are. They all think everything is great and we will just print more money and all is great. That's how stupid they are!!!!!

patriciathomas
42
Points
patriciathomas 05/17/09 - 08:47 am
0
0
NoPartyFan, the leveraging

NoPartyFan, the leveraging business is high risk, but has safe guards that allows those with conservative interests to be part of the business. This was totally upset when the federal government got into the game with guarantees (unsustainable) from Freddie and Fannie. The doable part of your approach should have started with the exclusion of interference from government agencies in the investment business. They're playing with "free" taxpayer money and don't have any safeguards when it comes to investing risks (obviously) We're all dealing with the results of their latest efforts. D.C. needs a big flush.

Brad Owens
4583
Points
Brad Owens 05/17/09 - 09:03 am
0
0
WHarpine, I beg to differ in

WHarpine, I beg to differ in your assesment. It was LBJ who started to raid the trust fund to pay for the 'War of Poverty' so you need to get you facts right. By the year 2000 over a trillion had been taken by EVERY administarion and congress since LBJ started it. Imagine if we had just left all that money in the trust fund? Imagine if the fund earned 10% a year, that would be $100,000,000,000 (100Billion). If we divide just the interests by the 50million people on it (my guess??) it comes out to about $3500 on just the the interests being split! Now just imagine if all that money was available to maintain the SS program. I once asked Rep. Norwood in a town hall meeting if the Federal Governement ever intended to pay back the money it 'borrowed' from SS and he laughed and said he wished he could make it happen but that it would impossible to pay back the Trillion dollars, well not these days I see. 1.9trillion in two votes? Why not put back the cash we borrowed form working Americans?

NoPartyFan
2
Points
NoPartyFan 05/17/09 - 09:03 am
0
0
The leveraging business has

The leveraging business has been in a too high risk bracket. It is in the process of being brought down to lower levels of risk and needs to stay that way. I think the government is getting closer to getting out of the banking business. Now if they can just keep themselves from jumping into the trucking and municipal bond-insurance market. There's a lot of corruption in that last one. I just read a book about Bear Sterns. We've been giving Wall Street too much credit for "smarts". Their high level officers were clueless. I'm very surprised that they were able to stay in business as long as they did.

shivas
2
Points
shivas 05/17/09 - 09:13 am
0
0
Yes, that tea party is still

Yes, that tea party is still being talked about! What great passion and impact it had. When was it again?

slippery 25
0
Points
slippery 25 05/17/09 - 09:21 am
0
0
I am sorry but Congress is

I am sorry but Congress is not capable of fixing SS or Medicare to many life long Harry Reid's in office with no way to get them out. Term Limits would at least give us a chance.

Grasshopper
7
Points
Grasshopper 05/17/09 - 09:44 am
0
0
In the 90's if a corporation

In the 90's if a corporation was not using its capital and had a low debt to equity ratio it was considered a dead company and a bad investment. The theory that corporations should leverage their capital and have a high debt to equity ratio which represented growth was a a good investment. It didn't make sense to me then ,obviously, that was a bad theory. The consumer lending market failed, because of the theory that if the delinquency ratio (delinquent loans/ledger balance= delinquency ratio) is rising then raise the ledger balance by lending more money. This lowered the delinquency ratio made the consumer lending corporations appear to be profitable. Finally the manipulating the numbers game failed, and now the government wants to play the same manipulating numbers games. HELLO HELLO HELLO TOOT TOOT BARRY????????????????/

patriciathomas
42
Points
patriciathomas 05/17/09 - 10:05 am
0
0
shivas, why is "polaroid

shivas, why is "polaroid shallow" so big with you libs? Is it your government education?

mad_max
0
Points
mad_max 05/17/09 - 10:06 am
0
0
I can make Social Security

I can make Social Security solvent tomorrow. Quit paying it out to people that did not pay into the system. If you want to pay them "welfare" then do so but not out of the SS fund. Same goes for Medicare. Actively investigate Medicare and SS fraud. It is rampant and if you try to report it to a government agency they are not interested unless it involves huge amounts of money. Don't believe it? Just try reporting an overcharge or outright false billing for a relative in a nursing home. They are not even interested. SS was meant as a retirement SUPPLEMENT for people who worked and paid into the system. It is broke because it has now become another government slop trough to feed the pigs. Our SS system is a prime expample of what happens when you "share the wealth" too much. You reach a point where there is not enough "wealth" to go around so everyone will have to start getting less. "The problem with socialism is that you eventually run out of other people's money" - Margaret Thatcher The perversion of the original intent of SS into becoming an all encompassing entitlement was our first big step toward full blown Socialism. Universal Healthcare is another nail in the coffin.

patriciathomas
42
Points
patriciathomas 05/17/09 - 10:08 am
0
0
NoPartyFan, your point of

NoPartyFan, your point of view is very antiAmerican. Destroying the leverage system reduces risk investments. It's certainly being brought down to lower levels. The "greed" that makes people get into the investment business is the same "greed" that makes investors not want to lose money. Killing the goose that laid the golden egg is not a smart investment and government thinking is an oxymoron. You're putting your faith in the same entity that brought the market to it's knees.

Grasshopper
7
Points
Grasshopper 05/17/09 - 10:35 am
0
0
PT Everyone should be

PT Everyone should be required to watch ABC's Special John Stossel's Greed!

braxtonkbragg_
0
Points
braxtonkbragg_ 05/17/09 - 10:37 am
0
0
How many people did the

How many people did the obomoron admin kill in Iraq and Afganistan today?

patriciathomas
42
Points
patriciathomas 05/17/09 - 10:39 am
0
0
me too, milton. John Stossel

me too, milton. John Stossel has a consistent perspective with a realistic base. That's something almost never seen on broadcast news.

braxtonkbragg_
0
Points
braxtonkbragg_ 05/17/09 - 10:40 am
0
0
wharpine, just how stupid are

wharpine, just how stupid are you? As stupid as your 0727 suggest?

patriciathomas
42
Points
patriciathomas 05/17/09 - 10:42 am
0
0
yes braxton, he consistently

yes braxton, he consistently appears to be.

NoPartyFan
2
Points
NoPartyFan 05/17/09 - 10:42 am
0
0
I thought that I was being

I thought that I was being more pro-state, pro-south. I'm not saying take all the lverage out. I'm saying that we have plenty of greedy people in the south. Why not let some of out brutes and brutessess bring some of that money to Atlanta, Charlotte, Charleston or Columbia instead of it all going into the New York City economy.

braxtonkbragg_
0
Points
braxtonkbragg_ 05/17/09 - 10:45 am
0
0
SS has a simple fix--only pay

SS has a simple fix--only pay out to those that paid in--do simple for the politicos tho! We need to vote themall out, starting in 2010.

patriciathomas
42
Points
patriciathomas 05/17/09 - 10:47 am
0
0
I'm sure you mean well

I'm sure you mean well NoPartyFan, but your support for the current federalization is a little naive. The government just doesn't back away from anything once they perceive to have control.

NoPartyFan
2
Points
NoPartyFan 05/17/09 - 10:55 am
0
0
PT, I think that you just

PT, I think that you just repeating a talking point. I was very much against the TARP when it was put forth. I wrote hot letters to my congressmen about it. However, I was probably naive about that. It does appear to have stabilized the market. There is even a chance that some of it is going to be paid back. I never believed that was going to happen. Bernacke and his hencement were in Jeckyl Island last week working on an exit strategy. I do think that the market would still be way down in the tank if the TARP had not been put into place.

GACopperhead
6
Points
GACopperhead 05/17/09 - 10:59 am
0
0
Irregardless of party, the

Irregardless of party, the government has been using the excess SSI funds to balance the budget almost since the inception of Social Security. For a VERY long time, there has been more money paid in than went out. If you or I used someone else's money to balance OUR budget, ie Madoff, we would face the rest of our lives in jail. I ask: How is it illegal for you and me, but perfectly fine for our SERVANTS to do......

braxtonkbragg_
0
Points
braxtonkbragg_ 05/17/09 - 11:15 am
0
0
Very easy copper, "don't do

Very easy copper, "don't do as I do--do as I say do!" "Throw your money to the ceiling, what stays up is the Lord"s what comes down is MINE!" Your politicans at work, both repugs and dumbcrats!

ITDoc
1
Points
ITDoc 05/17/09 - 11:18 am
0
0
How would I solve the

How would I solve the SS/Medicare situation if I were King? Close both programs to new enrollment. Require people to be self responsible for their retirement/healthcare. Fund the programs only for those who have paid into them. If people choose to be ignorant of their need for retirement income, let them suffer those consequences. If people choose to be ignorant of their need for health care, let them die. The Federal Government has proven itself incompetent in managing virtually any program efficiently or prudently and should be allowed to fail. See also bank bailout, auto bailout, stimulus package, etc.

NoPartyFan
2
Points
NoPartyFan 05/17/09 - 11:18 am
0
0
For those who are fortunate

For those who are fortunate enough to have pension plans, some may be in the same shape as Social Security. There was a law that required companies to contribute a minimum amount to the the funds each year. In December, this requirement was rescended due the state of the economy. Some companies also have started using pension plans to take tax breaks and to use to fund deferred executive benefits and compensation.

http://finance.yahoo.com/retirement/article/105503/Companies-Tap-Pension...

Ode
5
Points
Ode 05/17/09 - 11:28 am
0
0
As you have heard many

As you have heard many times......Keynsian economics is a myth and social security is a ponzi scheme. Big government never works. Social "entitlement programs" never work. It is not the job of government to provide retirement benefits. Take the pork money out of the stimulus bill and pay each American back their individual amount that they have put into SS over the years with 4% interest and disband it immediately. It isn't Americans' right to retire on SS or receive free healthcare at age 62 or 65. Individuals need to be responsible for their actions. They have their entire lives to save so they can quit working late in life. If they choose not to do so then I guess they need to work until they die. It isn't the taxpayer's responsibility to support them.

Grasshopper
7
Points
Grasshopper 05/17/09 - 12:18 pm
0
0
Its would be nice for the

Its would be nice for the Government to write me a check for what I have put into SS. I would rather invest it in myself. Does anyone else get sick when you see that yearly report from the SS admin.

grouse
1635
Points
grouse 05/17/09 - 01:08 pm
0
0
The fighting in Iraq has not
Unpublished

The fighting in Iraq has not kept America safe. In fact, many Americans have died fighting this useless invasion. 911 happened on Bush's watch, and he had ample warning. The Chronicle's memory loss extends to forgetting that when Republicans had total control, they didn't "fix" any of these problems that the Chronicle now complains of.

braxtonkbragg_
0
Points
braxtonkbragg_ 05/17/09 - 01:12 pm
0
0
Grouse, are you as stupid as

Grouse, are you as stupid as you appear, or are you just trolling?

Grasshopper
7
Points
Grasshopper 05/17/09 - 01:47 pm
0
0
Grouse must have been in a

Grouse must have been in a coma during the Clinton years. Clinton treating the terrorist, of the first world trade bombing, as domestic criminals only encouraged more attacks.

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