sunset from behind the wire

sunset from behind the wire

Wednesday, February 24, 2016

The Future of Social Security

Demographic change in the United States and elsewhere in the world presents enormous challenges. In much of the world, the combination of increased life expectancy and a reduced birth rate has created a situation in which median age is rising rapidly. As a result, government transfer programs (used to be called a ponzie scheme), such as Social Security, that rely on taxes born by those currently working to fund benefits for those who are out of the labor force will come under increasing strain.

Policy makers will face difficult decisions because fiscal balance can be restored in such programs only by reducing promised benefits, raising taxes or through some combination of the two. Two of the more palatable and often discussed options are the removal of incentives that encourage early retirement and a gradual increase in the age of eligibility for retirement benefits to reflect increased life expectancy. Whether such reforms will be sufficient will depend, of course, on how quickly they are implemented and how far they go.

Republican front runner, Donald Trump, has vowed to save Social Security and Medicare through creating a vibrant economy, which will in turn increase the amount of money that the government takes in as a result of growth. Maybe that will work, but I doubt that it's a viable long term problem because the boom and bust cycles of market economies dictate that sustainable growth (over a long period of time) is an elusive goal.

Success in America requires that a combination of things happen and they've never happened for long enough. If you could have cloned Ronald Reagan and kept him in office indefinitely, maybe it would have been a reality, but that's not how it has worked in practice. There's always a Jimmy Carter or a Barack Obama waiting in the wings to appeal to people's greed or lust. President Johnson liquidated the Social Security Trust Fund to pay for the Vietnam war. Somebody will always there be there to steal it from the people paying into it.

I hear people's impassioned cries that it's "their money". As New Jersey Governor Chris Christie said in his inimitable way, "You've been jobbed. Your money was stolen."

Social Security was never intended to be a retirement plan. Medicare is emblematic of all government programs that grow to be absolute entitlements and economies grow up around them. And both of those ponzie schemes will end. The only question is how much they destroy on the way out.

The nation needs a safety net for the poorest, weakest and the generally f-ed up among us, but it can't be a debt that accounts for 71% of the federal budget (entitlements). I understand that not all of the entitlements are social security and medicare, but they count for the bulk at roughly two and a half trillion dollars.

In order for Social Security and Medicare to be sustained at their present level, my sense is that they need to be reduced by 50%. To put it in crude terms, it's a shit sandwich and we all need to take a bite.

Overhead Red?

ELECTION: I still think that the upcoming election will be a Trump/Rubio vs Kerry/Warren. Nothing in the past 24 hours has done anything but reinforce that opinion.

Pres. Barack H. Obama jr.
STATUS QUO: The Obama Administration has been working with Russia secretly to allow Russian reconnaissance aircraft to overfly the US. This is the first time that the matter reached the public, so I thought that it might rise to the level of interest here for you all.
(CBS News) Russia will ask permission on Monday to start flying surveillance planes equipped with high-powered digital cameras amid warnings from US intelligence and military officials that such overflights help Moscow collect intelligence on the United States. 
Russia and the United States are signatories to the Open Skies Treaty, which allows unarmed observation flights over the entire territory of all 34 member nations to foster transparency about military activity and help monitor arms control and other agreements. Senior intelligence and military officials, however, worry that Russia is taking advantage of technological advances to violate the spirit of the treaty
Russia will formally ask the Open Skies Consultative Commission, based in Vienna, to be allowed to fly an aircraft equipped with high-tech sensors over the United States, according to a senior congressional staffer, who spoke on condition of anonymity because the staff member wasn't authorized to discuss the issue publicly. 
The request will put the Obama administration in the position of having to decide whether to let Russia use the high-powered equipment on its surveillance planes at a time when Moscow, according to the latest State Department compliance report, is failing to meet all its obligations under the treaty. And it comes at one of the most tension-filled times in US-Russia relations since the end of the Cold War, with the two countries at odds over Russian activity in Ukraine and Syria.
The results of conversations between the US and Russia will no doubt be SECRET, and kept from the public even though the Obama Administration promised to be, "the most transparent in history." Therefore, it may be appropriate for you to raise the middle finger of either or both hands (if you're from the US - different gesture in the UK and elsewhere) toward the heavens when you leave your home. 

There are some who might feel that such a display of vulgarity is inappropriate when you consider that the president's closest advisors came from communist families (Jarrett and Axelrod) as did he. {Father, mother and maternal grandparents who raised him as well as the honorary "Frank Davis  (Uncle Frank) Marshall"}

I'm not suggesting the Russia today is communist, but I'm sure a lot of the old, warm and tender feelings between Barack and Putin remain:

A lot of how you interpret all of this has much to do with your personal level of trust in this administration to do the right thing. Some of you may quote the former SECSTATE and she who would be queen, "What difference does it make?"