Something to think about, seriously

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Wed Mar 25, 2009 5:15 am

The United States pension obligations are helping to remake the country’s politics. The United States has run fiscal deficits for years to pay for social programs. The government has sold bonds to finance these outlays. The United States needs a bailout to pay its obligations, but many international investors have pulled out of the United States, sending the country’s currency tumbling and darkening the economic outlook. Thirty percent of the population receives a government pension. The United States poses the global financial crisis’s biggest challenge.

Scary stuff huh?

Well, not to worry, I took those words from a Wall Street Journal article about Hungary.

But wait, is the debate over Social Security and Medicare going to remake our politics, yes indeed. Is much of the US deficit caused by entitlement programs? In fact, they represent the largest portion of the US budget and deficit. Has the US sold bonds to pay for these obligations? The surplus of Social Security tax revenue over outgoing benefits is invested in US Treasury bonds and by 2018 when tax revenues are insufficient to cover benefits, those bonds will have to be cashed in¦and where is the money coming from? Have many international investors pulled out of the US and has the dollar declined in value? Think China and the declining dollar and declining credibility of the US economic system. :-1

Does the US have 30% of its population receiving a government pension? No, not yet, but it is about 17% and according to Social Security Administration they have geared up to accept 10,000 applications a day from baby boomers each day for the next 20 years.

Related to that of course is Medicare, which is in worse shape than Social Security and will get far worse much quicker. You hear a great deal of rhetoric these days from our President about how health care is one of the main causes of our deficits and as far a Medicare (and Medicaid and VA benefits) goes he’s right. But think about this, the main portion of these costs is care rendered to patients, not administration, not systems, but health care. So when you hear that the deficit of the federal government will be brought down by controlling health care costs, think hard about what that means. I will tell you in two words, rationing and cost-shifting. Some form of health care rationing and a great deal of shifting of costs from the government to beneficiaries will be necessary. :-3 That means higher deductibles and co-pays, higher premiums and it means not getting all the care you want any time you want it, it means waiting and being denied some care, which if the truth be told about health care in the US is not really a bad thing.

Something to think about, seriously!

Kindle · Post by **Kindle** » Wed Mar 25, 2009 5:39 am

Scary thoughts......................

Clint · Post by **Clint** » Wed Mar 25, 2009 7:12 am

I'll be 62 next year. The system is collapsing right on schedule.:rolleyes:

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Wed Mar 25, 2009 11:12 am

Clint;1163154 wrote: I'll be 62 next year. The system is collapsing right on schedule.:rolleyes:

Think 65, not 62.

Galbally · Post by **Galbally** » Thu Mar 26, 2009 1:01 am

Simple, privatize all social insurance schemes get people to collect their cabbages for cabbage soup from McDonalds, get rid of free healthcare for everyone who is currently entitled, dispense with the courts, they are expensive, get rid of government pensions, get rid of food stamps, privatize all government departments including the army and the police force, congress, every state legislature, just leave the President and the Vice president as the only government employees everyone else will be paid by them, and they will have 3 helper monkey's each for the three departments of government, which will be

1. Home Department. (dealing with guns, and pawn brokers)

2. Talking to Foreigners Department. (no French invited again, ever)

3. Selling off what's Left department. (not a lot left since we gave back that Winston Churchill bust and sold off the Pacific Fleet to India)

that will mean that all you will have to pay for will be the upkeep of the facade of the white house, the cleaning staff, and the two lads salaries. You can then keep all the rest of the lovely tax lolly for yourself and go buy a lovely nice truck and some tickets to the baseball. :rolleyes:

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Thu Mar 26, 2009 2:22 pm

Galbally;1163584 wrote: Simple, privatize all social insurance schemes get people to collect their cabbages for cabbage soup from McDonalds, get rid of free healthcare for everyone who is currently entitled, dispense with the courts, they are expensive, get rid of government pensions, get rid of food stamps, privatize all government departments including the army and the police force, congress, every state legislature, just leave the President and the Vice president as the only government employees everyone else will be paid by them, and they will have 3 helper monkey's each for the three departments of government, which will be

1. Home Department. (dealing with guns, and pawn brokers)

2. Talking to Foreigners Department. (no French invited again, ever)

3. Selling off what's Left department. (not a lot left since we gave back that Winston Churchill bust and sold off the Pacific Fleet to India)

that will mean that all you will have to pay for will be the upkeep of the facade of the white house, the cleaning staff, and the two lads salaries. You can then keep all the rest of the lovely tax lolly for yourself and go buy a lovely nice truck and some tickets to the baseball. :rolleyes:

And your point is that a bankrupt country is the way to go?

Post by **Bryn Mawr** » Thu Mar 26, 2009 2:36 pm

Why ascribe your countries fiscal deficit totally to social programs when the greatest single component is the millitary?

That's like saying you're spending too much as a household because your food bill is too high when you go out each week and buy cars, teles, holidays etc.

Galbally · Post by **Galbally** » Fri Mar 27, 2009 12:44 am

QUINNSCOMMENTARY;1164023 wrote: And your point is that a bankrupt country is the way to go?

I don't know what my point is any more, what's yours?

Nomad · Post by **Nomad** » Fri Mar 27, 2009 12:51 am

Galbally;1164296 wrote: I don't know what my point is any more, what's yours?

I have that problem literally dozens of time each day.

The real problem with that is the other person usually remembers what their point is so Im stuck looking like a sack of potatos.

Galbally · Post by **Galbally** » Fri Mar 27, 2009 1:24 am

Nomad;1164300 wrote: I have that problem literally dozens of time each day.

The real problem with that is the other person usually remembers what their point is so Im stuck looking like a sack of potatos.

Well at least your honest my lad, I don't know if there is much of a coherent response to most of this stuff anymore, I think I will just watch the thing burn now. Maybe in 6 months we will have some better idea about where this is all going.

I kinda understand the point that Quinn is making, I just don't know if more Capitalism, consumerism, and less public governance is going to solve the problems with uncontrolled Capitalism, consumerism gone mad, and the death of public and civic life.

It seems clear to me that the result of giving private Capital essentially everything it wanted over the last 20 years (particularly in the States) and culturally bending the knee to wealth and worshipping the concept of endless personal acquisition and consumption (even when borrowing to "have it all") has not improved things at all either socially or economically for ordinary people.

Neither has it improved the security or cohesion of our nations as political entities, quite the reverse actually. We seem to have become so enamoured of the glamours of consumerism, that some simple political and moral lessons have been ignored for far too long, and now we face some very serious consequences.

Nomad · Post by **Nomad** » Fri Mar 27, 2009 1:39 am

Im sorry what were we talking about ?

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Fri Mar 27, 2009 6:13 am

Galbally;1164296 wrote: I don't know what my point is any more, what's yours?

That in the final analysis a country is no different than a family when it comes to finances and that prudent spending and borrowing is a necessity and if that is not done there is a major price to pay whether it be high taxes, inflation and or high interests rates.

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Fri Mar 27, 2009 6:18 am

Bryn Mawr;1164032 wrote: Why ascribe your countries fiscal deficit totally to social programs when the greatest single component is the millitary?

That's like saying you're spending too much as a household because your food bill is too high when you go out each week and buy cars, teles, holidays etc.

That is not true. In 2008 the Department of Defense was 16.6% of the budget while Social Security and Medicare alone were 36.6%, Social Security alone was larger than the military.

Social programs are fine as long as they can be paid for and people understand what paying for them means, like taking money form them and from other important programs.

Galbally · Post by **Galbally** » Fri Mar 27, 2009 8:26 am

QUINNSCOMMENTARY;1164376 wrote: That in the final analysis a country is no different than a family when it comes to finances and that prudent spending and borrowing is a necessity and if that is not done there is a major price to pay whether it be high taxes, inflation and or high interests rates.

I understand, but countries are not as simple as families, in that families don't produce their own currencies, or have internal credit systems withing the actual families themselves that have to be regulated with central banks.

Analogies are useful for making basic points, but they break down after a while, and yes living within ones means is obviously a national as well as a personal priority, but there are massive differences when trying to frame the economics of a 4 person family, as opposed to a nation state comprising 270 million people.

Economics isn't all just about accountancy, I mean you could stop all government spending tomorrow, or raise taxes by double to pay off you debts, but you would probably foster a revolution, and thats not a good outcome for the economy either, so you have to be a bit more sophisticated in how you deal with these things.

Post by **Bryn Mawr** » Fri Mar 27, 2009 10:32 am

QUINNSCOMMENTARY;1164378 wrote: That is not true. In 2008 the Department of Defense was 16.6% of the budget while Social Security and Medicare alone were 36.6%, Social Security alone was larger than the military.

Social programs are fine as long as they can be paid for and people understand what paying for them means, like taking money form them and from other important programs.

Where are you getting your figures from?

According to the US Government :-

Budget of the United States Government: Fiscal Year 2008

National Defence cost $617,155,000,000 whilst Social Security cost $552,225,000,000

I ask again, why ascribe the entire debt to just one portion of the budget - it is totally unreasonable.

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Fri Mar 27, 2009 2:38 pm

Bryn Mawr;1164545 wrote: Where are you getting your figures from?

According to the US Government :-

Budget of the United States Government: Fiscal Year 2008

National Defence cost $617,155,000,000 whilst Social Security cost $552,225,000,000

I ask again, why ascribe the entire debt to just one portion of the budget - it is totally unreasonable.

Your forgot Medicare the govenrment run health care system which is in addition to Social Security.

Post by **Bryn Mawr** » Sat Mar 28, 2009 6:01 am

QUINNSCOMMENTARY;1164637 wrote: Your forgot Medicare the govenrment run health care system which is in addition to Social Security.

Your statement was "social security alone was larger than the military".

And you still didn't answer my question.

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Sat Mar 28, 2009 7:20 am

Bryn Mawr;1165005 wrote: Your statement was "social security alone was larger than the military".

And you still didn't answer my question.

Well based on the percentage chart I found it is, not by very much, but still slightly larger.

In any case the point was social spending which includes Social Security, Medicare, Medicaid, food stamps, etc. several of which I didn't include at all, is a growing problem that could bankrupt the US just as it is now doing in Hungary.

Politicians make people think they can have it all and everything will simply move along without consequences and that is not the case.

All I would like to see is for politicians to tell people the truth. If Americans want national health care and Social Security to stay as it is, then someone needs to tell them what that will cost and how it will be paid for.

QUINNSCOMMENTARY · Post by **QUINNSCOMMENTARY** » Sat Mar 28, 2009 7:21 am

Galbally;1164455 wrote: I understand, but countries are not as simple as families, in that families don't produce their own currencies, or have internal credit systems withing the actual families themselves that have to be regulated with central banks.

Analogies are useful for making basic points, but they break down after a while, and yes living within ones means is obviously a national as well as a personal priority, but there are massive differences when trying to frame the economics of a 4 person family, as opposed to a nation state comprising 270 million people.

Economics isn't all just about accountancy, I mean you could stop all government spending tomorrow, or raise taxes by double to pay off you debts, but you would probably foster a revolution, and thats not a good outcome for the economy either, so you have to be a bit more sophisticated in how you deal with these things.

Of course you have a point but the fundamental logic of being able to afford what you spend still stands, even a far more complex environment.