June 07, 2012
There isn’t a dedication in the Congressional Budget Office’s new
report, “The 2012 Long-Term
But if one individual deserves to be recognized in the latest
examination of the federal government’s fiscal meltdown, it’s Ida May Fuller. The
retired legal secretary was the first recipient of a regular Social Security
benefit. In 1940, she began to receive monthly checks in the amount of $22.54. In
a cruel joke on taxpayers, the money kept flowing until the old biddy finally died,
three and a half decades later.
Ida’s Social Security “investment” makes Hillary
Clinton’s cattle-futures windfall appear scrawny. Taxes paid: $24.75. Benefits
No American can expect to reap the kind of return that Ida
enjoyed, but nationalized pensions, coupled with socialized healthcare for the
aged, remain obscenely generous.
The Urban Institute
lifetime value of Social Security and Medicare benefits and taxes for typical
workers in different generations at various earning levels.” For a single
man who drew an average salary and retired in 2011 at age 65, the present value
of the taxes he paid for “social insurance” is $359,000. Benefits received:
For married households comprised of two average-wage earners,
the yield is better. Taxes paid: $717,000. Benefits received: $913,000.
But it’s an old-school marriage -- one earner, average wage --
that fares the best. Taxes paid: $359,000. Benefits received: $805,000.
Medicaid isn’t included in the Urban Institute’s calculations,
but it should be. The federal-state healthcare program for “the poor” covers a
staggering 47 percent of long-term care.
It all adds up to a nightmarish debt scenario, because the days
when most of D.C.’s loot was devoted to highways, G-Men, and submarines are
over. “Federal spending for mandatory programs has accounted for a sharply rising
share of noninterest outlays in the past few decades,” the CBO found,
“averaging 60 percent in recent years. Most of that growth has been
concentrated in the three largest programs -- Social Security, Medicare, and
As the CBO’s analysis reveals, when it comes to entitlement insanity,
we’ve only just begun. The population is growing older, and all evidence points
to “growth in health care spending per beneficiary.”
So while publicly held
debt -- just over $11 trillion -- is a disturbingly high 70 percent of GDP in
2012, it soon will rise to nearly unimaginable proportions. With expenditures
on autopilot, and assuming the continuation of Bush-era taxes, Congress’s
number-crunchers estimate that by 2037, debt will “balloon … to almost 200
percent of GDP.” Notably, the CBO warns that its calculation does “not include
the harmful effects that rising debt would have on economic growth and interest
rates. If those and other economic effects of federal policies were taken into
account, projected debt … would increase faster.”
In the not-too-distant future, America’s
profligacy crisis will surpass the peril faced today by the worst of Europe’s spendaholics.
Is anyone interested in fixing the problem?
The president and congressional Democrats push higher taxes on
“the rich.” But their beloved “Buffett Rule” was discredited by the Joint
Economic Committee, which concluded that over a decade, the measure would raise
a paltry $46.7 billion. Besides, no tax increase -- even if it didn’t impact the
behavior of workers and investors -- could ever pay for the goodies sought by
the forces of Unlimited Government.
That leaves the right -- “conservatives” who either helped or
looked the other way when George
W. Bush boosted expenditures from $2.01 trillion in 2002 to $3.52 trillion in
2009. To anyone who’s paid attention, Republican attacks on the Obama administration’s
deficits -- gaps that are largely
attributable to the Great Recession and an anemic recovery -- sound bizarre.
The “austerity” of the “Ryan
plan,” passed earlier this year by the House of Representatives, would have
added trillions of dollars to debt held by the public.
Ryan’s timid proposal faces certain death in a GOP-run Senate.
(Too many squishy
Republicans.) As for “President” Romney … please. He has no plan for Social
Security privatization, and his “reform” of Medicare will have “no effect on current seniors
or those nearing retirement.”
As usual, the only politicians who recognize the debt debacle --
and are willing to fight to avert it -- are libertarians. Yet Ron Paul didn’t win
the GOP nomination, and it’s doubtful that Gary Johnson, ignored by Republicans
and running as the Libertarian Party’s presidential nominee, will attain 1
percent of the vote in November.
Which will occur first -- a voter awakening, or
The answer’s not far off.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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