Mar

3

Dude, I am actually with you on reforming social security but you are a numbers guy so I want you to look at these numbers. I too am a numbers guy.

I am 52. Myself and my employer have collectively paid $186,000 into Social Security thus far. By the time I retire that figure will be roughly $398,000. At 3% interest on this money (which is a very modest rate of return) the Federal Government will owe me around $793,000.

With an average life expectancy of 78, I went out to the Social Security website and calculated what I would receive if I retired at 62.  The amount I would receive would be about $632,000 (these number assume I live to 78). If I waited until I was 67, the amount I would recieve would add up to $698,000. Both these numbers fall short to what I and my employers paid into the system.

First, I am all for reform. If your idea is not going to screw me over, or the millions of others in my relative age group I am all ears.

BUT, the facts are that I paid cold hard cash into this system for well over 30 years. Real dollars. Social Security may have been an entitlement program the first 20-30 years it was run, but, it is not an entitlement for people like me. We have paid into this system and we expect back what we paid in.

The fact that you and all the elected officials before you took the Social Security surpluses and spent them is not our problem it is yours. We expect you to fix it. I am all for ideas that keep this program solvent and sustainable. I am NOT willing to give up my real investment into this (mandatory) program because of your fiscal irresponsibility, or the fiscal irresponsibility of both parties over the years. No one else that has paid into this system is willing to give their capital investment up as well.

DO NOT MESS WITH OUR MONEY! Y’all can solve this problem without screwing us.

Dec

23

Because we collectively punish our elected officials by voting those into office that feed us the biggest line of bullshit.

In looking at our history of government deficits I still contend that unlike companies and individuals some debt seems to be okay. But, I am not sure, neither are our leaders and economists exactly how much is too much. But, I think most of us agree that we are likely past the limit.

I am with the tea party people on this issue.

If your personal debt were to be transferred to your children would you continue to rack up debt? Most of you would not.

Yet, we seem to have no qualms about letting our national deficit continue to rise. Our current deficit is estImated at around 11.4 trillion dollars. I do not want to get off on a tangent here trying to explain everything. I think we can all agree the amount we owe is pretty gross, and pretty outrageous.

We are also in some pretty tough economic times. Unemployment is high. And, to make matters worse we have an aging populations that are going to take social security and medicare, both ponzi schemes, and literally bankrupt our federal government. Oh, and let us not forget that our national infrastructure (roads, utilities) are an aging mess, as is our education system.  

All is not total doom and gloom. Since the economic meltdown in October 2008 the general American public seems to have wised up (hopefully long term) and consumer debt is falling and personal savings are rising.

I think it is high time for our leaders to get a similar haircut.

But, they ARE NOT going to do this as long as you do not understand what is at stake and what will be required to dig out.

The principles are really quite simple. Getting everyone in our country to swallow the medicine is the hard part.

If we look at the governments deficit (which is our collective deficit) there are essentially three things that can be done to dig ourselves out of debt.

1) The government can increase revenues by increasing interest rates, and through the increase of taxes.

2) The government can balance its budget and not spend more than it takes in. Our 2008 budget was 2.9 trillion, the government took in 2.5 trillion, a deficit of 400 billion. But, 400 billion is not the real number. We spent 600 billion in social security surplus to fund the debt. Yes, that is correct, the money left over that you and I have been paying into social security is actually spent on other aspects of the Federal Budget.  This is a different issue we need to take up at a later time.

3) We export at least as many goods to other countries (in dollars) that we import. Did you know that our 3rd biggest export is scrap metal to foreign countries. They recycle these metals and sell them back to us as finished products.

Now, for the bitter medicine we all need to swallow.

To increase revenues
- The Fed needs to raise the Federal Funds rate. It is currently 1/2 percent. To put this in perspective for every trillion the government lends at this rate they receive 5 billion in revenue. Raising this rate to 3% would raise an additional 25 billion in revenue and lending rates would still be affordable.
- Raising taxes seems to be to much a lightening rod. Ok, our GDP is around 13 trillion dollars. If we were to enact a national sales tax of 3% of our GDP for 5 years on 10 trillion of our 13 trillion GDP amount this would along raise 1.5 trillion dollars which would be enough to pay off most of our deficit owed to foreign countries.
- Make an investment to put people back to work. It is estimated that over the past three years 7.5 million jobs were lost. Every million people we can put back to work convervatively represents another 4 billion dollars in collected taxes just at the federal level.
- Let the 3 Bush tax cuts expire. Before you get all bent out of shape. If your adjusted gross income is 50,000 and you are filing married jointly this meant you paid $48 less in 2008 that you did in 2007, and $32 less in 2009 that in 2008. I chose 50,000 as this is close to the reported median family income in 2007. The savings of repealing these tax cuts add an additional 12 billion in government revenues. You and I would be missing $1.53 a week. That is $1.53 on $50,000 in annual income. Not a big deal to you and I. However, an additional 12 billion can go a long way.

To Manage the Federal Budget
Simple
- The government only gets to spend what they bring in.
- We spend this money wiser. Easily, we could find 25% of the money our government spends as wasteful. That is a pile of cash. It is time for a fiscal haircut. By the same token, after we pay down or pay off the foreign debt we owe we takes the years of surplus and we save them for the rainy days. If you analyze most periods of severe economic downturns since the turn of the century you will find they are preceeded by years of government surpluses. Is this a coincidence?

Balance Imports and Exports as a zero sum game
- We begin to do this by investing in green energy and reducing our dependency on foreign oil. By doing this we also create jobs for the future and start taking better care of our environment.

If you think we can get out of the mess we are in by not raising taxes and decreasing spending you are a moron, plain and simple. There are many on the left and many on the right that want fiscal responsibility. But, there are still not enough.

Why?

Because so many of you do not seem to really understand what is going on. It is time to get educated and time to demand our leaders to be fiscally responsible.

Because we elect the person that tells us the best line of BS. I can lower your taxes and increase the services I provide you. We need to quit being fools on this. If our employer said they were going to cut our pay and by doing this we could increase our standard of living we would not buy it.

Wake up America.
 

 

Nov

17

This is a question for forty million of you out there.

What would you do without medicare?

“Write those letters now. Call your friends, and tell them to write them. If you don’t, this program I promise you will pass just as surely as the sun will come up tomorrow. And behind it will come other federal programs that will invade every area of freedom as we have known it in this country, until, one day…we will awake to find that we have socialism. And if you don’t do this, and if I don’t do it, one of these days, you and I are going to spend our sunset years telling our children, and our children’s children, what it once was like in America when men were free.”

Ronald Reagan spoke these words in 1961 for a public service ad against medicare.

Now this question is for 45 million of you…

What would your quality of life be without social security?

In 1935 Sen. Bennett Clark of Montana proposed an amendment that would have enabled employers to opt out of Social Security if they had pension plans offering more generous benefits than Social Security. By the way, Clark was a Democrat.

“The Clark Amendment was developed by a group of insurance lobbyists under the leadership of Walter Forster, of the insurance brokerage firm of Towers, Perrin, Forster and Crosby, and introduced by Senator Clark as an amendment to the Administration’s bill while it was under consideration in the Senate Finance Committee.”

(Source: http://www.socialsecurity.gov/history/clarkamend.html)

Seems some things never change. Sometimes smart people are wrong.

This is the for all us. Next time you are driving on an interstate imagine what American life would be like had Eisenhower not enacted the  “Federal-Aid Highway Act of 1956.” Ike was a Republican.

As you look around at our crumbling national infrastructure, as you watch people oppose Obama’s ambitious plans to revitalize our energy grid, build up our infrastructure, and call him a socialist and compare him to Hitler think about what your lives would be like had our earlier leaders not had the foresight to create the SSA, Medicare, or our national interstate highways.

Think hard about these things.

Dec

16

The U.S. Government SEC site defines Ponzi scheme as …

‘Decades later, the Ponzi scheme continues to work on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses’

Hmmmmm, let’s look at our Social Security, Medicare, and Medicaid programs. They are termed “pay as you go” entitlement programs. In other words the money we pay into the system is not used to pay our future retirement benefits. Rather, the money we are paying in is used to pay current people that are retired. This is how it has always worked since Roosevelt enacted the program.

So will someone write in and share with me how our tax dollars going to pay current retirees is any different than “…new investors used to pay off earlier investors …”?

Seriously, I want to know. Ponzi schemes (aka pyramid) schemes happen to be illegal for everyone but our federal government. I suspect most of the American public believe the money they are contributing is going into a special fund just for them.

In fact, what many pay in does not begin to cover what they are entitiled to receive. This has been the case since day one.  Another interesting fact, the first social security recipient, Ida Fuller paid in $22 from 1937-1939. She retired in 1939, lived to 100 and collected 20,944,42 until she died in 1974.

Think this is unique? Think again. Mortality rates are rising. To make matters worse Social Security increases have been tied to COLA increases since 1975. Further, the increase has been 4% or higher for 14 of the past thirty four years (double digits twice). These numbers come straight from the governments social security administration site http://www.ssa.gov/OACT/COLA/colaseries.html.

Here are some more facts to enlighten (or frighten) you.

* In 1960 there were 5.1 workers paying into the system for each retiree, in 2004 the ratio was 3.3 to 1. It will be 2.2 to 1 in 2030.

* In the past we paid more into the system than was paid out, but the government has already spent these dollars on other programs. It is GONE.

* The MOST conservative estimate in 2003 projecting payouts placed medicare and social security (again using conservative numbers based on COLA) at 45 trillion dollars. At the time our national debt was a mere 4 trillion. So fellow baby boomers and Gen X’ers how do you think you will be getting your fair share?

$45 trillion adds up to 158,000 for every single person in our nation. By my math my family of four would owe $636,000 dollars. This number does not even factor in the drug benefit addition recently added to medicare.

You may be wondering why the $45 trillion is not accounted for in our national deficit. Well, because the federal government does not have to follow the accounting and actuarial guidelines that it created for business to follow. (Turns out that even with Sarbanes-Oxley our financial and insurance sectors did not feel a pressing need to follow based upon the current debacle we are in.)

In 1994 the Kerrey-Danforth commision studied this problem. They concluded  that if we did not get spending for Medicare, Medicaid, Social Security, Military and Federal pensions  under control that these programs would end up exceeding the TOTAL federal budget before the last of the baby boomer generation retired. Thirty of the thirty one members of the partisan commission agreed with the findings. Clinton who commissioned the study did nothing. Of course he was in his first term and the federal government received 350,000 outraged, postcards (all looking quite the same) from angry seniors before the results were released to the public.

Peter G. Peterson wrote a whole book on this subject in 2004 titled “Running on Empty” that was largely ignored as many of us were too busy buying and flipping houses using credit and money we did not have. He also outlines a reasonable solution for dealing with this problem long term.

Unfortunately most of you can only think in the here an now, many of us do not care to do anything. Until the majority stands up and says enough is enough we are doomed. Retirement for most boomers is going to be a very dark and forboding time.

People, at least 75% of us in the middle class (my numbers are very conservative on the low side) manage our money wisely. We did not create or contribute to this shit we are now in. Yet sadly, many of us will be losing our jobs. Many have already lost sizeable portions of our retirement. Until we collectively stand up as the majority we are and tell our government what we want and what we expect (painful in the near term as it might be) we are going to ALL be paying for the sins of blind government, greedy rich business execs and the minority of ignorant consumers that got us here. The choice is yours.

Pass this to your friends and tell them to pass it to their friends. Write your congressman or email this or other posts I have made and ask them what they plan on doing to REALLY fix the problem.

 

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