Tag Archives: entitlements

Entitlement Conundrum – Break Down the Numbers

Rasmussen reports released a report on Wednesday that shows that 23% of Americans receive some form of cash benefits from the almighty Federal government.  Twenty-three percent.

Almost one-in-four Americans rely on cash from the government?  How sad a situation we share.

On the other side of that entirely imbalanced equation is a government that produces .. NOTHING.  That means taxpayers are on the hook for the 1/4 of Americans that need hand-outs.

I could use the figures posted by many astute organizations that say that 47% of Americans pay zero or negative taxes, but I can hear the libdergardner whining already.  Instead, I’ll use CBS’s more ‘conservative’ fugures:

An astonishing 43.4 percent of Americans now pay zero or negative federal income taxes..

And that was in 2009.

So, 56.6% of us put money into a system that has 23% that are pulling from it.  The math is getting scary – to most of us.

Rasmussen continues: The 23% (we’ll call them .. 23ers in the spirit of the Unions 99er movement) are somewhat reluctant to let go of their free money.

Of those who do receive government money, just 34% are at least somewhat willing to cut some of their own benefits to reduce the size of the federal budget, with 14% who say they are Very Willing to do so.

Great, they love stealing bread from the tables of our children and most of them don’t care if our kids have to starve later because ,”It’s my money, and I want it now” to quote an annoying ad from a parasitic firm.

Sickening, upsetting .. I was laid-off a few years ago and took exactly zero dollars from the government.  We cut-off cable and cell phones, ran the AC less, discontinued magazines and newspapers, cut coupons and ate bulk-noodles.  We survived.

These are exactly the things we must cut.  Now.  It must be done responsibly as we have made far too many dependent upon the government’s drug.  We will have to let the retired and near-retired continue on, but those of us in our 40’s, 30’s and lower … be willing to give those entitlements up or our kids will be left with a mess that WE could have fixed.  We have to get over ourselves, yesterday.

You Are No Longer Entitled to Prosperity

Modern Monetary Theory (MMT), or Chartilism, is not as innocuous as it sounds, and America can trace her every current  financial woe to it. Developed in the 1920s, and approved of by John Maynard Keynes, it became the hidden standard of our economy when we moved completely to a fiat money system and away from one backed by a commodity.  In the simplest terms, MMT is a system in which the wealth creation of a nation is measured by government deficit spending rather than the goods or services sold for profit among its citizens. The only way this type of system is sustainable, is if the government taxes its citizenry to recover the already spent money. Proponents for this system argue that it is preferred because it allows for government deficit spending for (get this) fiscal stimulus in ways not possible under a commodity based monetary system.

For six months last year the Federal Reserve printed money to fund the already passed stimulus plan to the tune of $300 Billion. Additionally, they “bought” mortgage backed securities from the already bankrupt mortgage twins Fannie and Freddie. The Central Bank joined in the fun of buying both, and recently aquired debt by both in US Treasuries and Fannie & Freddie’s paper this past year is a whopping $1.25 TRILLION.

While MMT has been in practice since long before the US abandoned the Gold Standard, it has recently been purposely employed as the current Administration’s fiscal policy. Is it any wonder there has been no budget passed? The real question everyone should be asking is: “How much of my money have they already spent?”

The answer to that is one that most middle class Americans cannot afford to hear. The U.S. National Debt Clock puts each taxpayer’s share at more than twice the median annual income. Without an existing budget, and using MMT as a fiscal policy, Obama’s administration could spend the American taxpayer into several generations with no means of being held accountable. With MMT, the largest missing component IS accountability.  Those spending the money are counting on you paying it, no matter how high the bill and no matter how long they continue to spend.

It is unthinkable for most middle class Americans that their taxes will increase significantly, but that is exactly what has happened, and will continue to happen. With the passage of program after program aimed at fiscal stimulus, the Patient Protection and Affordable Care Act, Financial Reform, the inflation of food prices and the looming cap and trade legislation, taxes will continue to rise to the point of your average family no longer being able to sustain their current existence. The continued cost of providing for the unemployed and the continued decline of all sectors of the housing market are affecting one in every five Americans. The hole that MMT has dug is a deep dark one, and we are still shoveling away with false hope of finding light on the other side, as long as we keep digging.

Most Americans today have no savings, are unable to put their children through college and couldn’t get a loan for a new home even if the money were still rolling in. The strangling of the US economy, the tightening of regulations on businesses small and large, and the general lack of consumer credibility,  have ground national and individual prosperity to a halt. Each new piece of burdensome legislation passed by this Administration adds to a bill that the middle class will ultimately be paying for: or facing bankruptcy on a scale so massive as to collapse the economy completely.

The decline in home starts and record low existing housing sales , unemployment, consumer borrowing lows, and general unrest about the economy are leading to an inevitable Depression era for which there are no currently viable solutions to emerge from. For us taxpayers that means Obama’s probable issuance of a second massive “emergency Stimulus package” and an even dimmer fiscal future for personal prosperity. Make no mistake, there are clear causes of the current credit crunch and nonexistent savings accounts in Middle Class America, and we elected them to office.

Entitlism in Practice: Favors Taken to Extremes

Bribery and CorruptionWe’ve defined Entitlism as basically gaining favor with the ruling class in order to get .. favors.  Now, do me a favor, quit asking for them .. from them.  We shouldn’t be dependent on them, they aren’t supposed to be doing them and no one believes that they are doing them for anyone but .. them.

Certainly performing acts of kindness for someone from whom you never expect a return is moral and good – even if it is a politician.  It gets dicey that when you do something expecting something or do something for someone important, to be made someone important.

Rod Blagojevish envisioned himself a President in 2016.  He had big plans and ideas.  In order to fill then Senator Obama’s seat in the Illinois legislature, Blagojevich wanted to make sure he gotObama and Blagosomething for giving something.  As he put it, “I’ve fot this thing and it’s f***ing golden .. I’m not just giving it up for f***ing nothing.”  Blago believed something was owed to him, he deserved it and was willing to do a favor for Obama to get it.

Of course, Blagojevich not only felt he deserved things he didn’t he also felt others owed him things they didn’t. He was working to shake down a Children’s hospital for campaign dollars  if they wanted their governmentdollars.  Maybe the hospital is starting to figure out what a lot of us already know – depending on the government for money will leave you just .. depending on the government.

Unless you’ve been under a rock, you are also aware of the offer to Sestak that rocked the media.  From MSNBC

Last summer, I received a phone call from President Clinton. During the course of the conversation, he expressed concern over my prospects if I were to enter the Democratic primary for U.S. Senate and the value of having me stay in the House of Representatives because of my military background. He said that White House Chief of Staff Rahm Emanuel had spoken with him about my being on a Presidential Board while remaining in the House of Representatives. I said no. I told President Clinton that my only consideration in getting into the Senate race or not was whether it was the right thing to do for Pennsylvania working families and not any offer. The former President said he knew I’d say that, and the conversation moved on to other subjects.

The White House released a memo that supported this claim and Bill Clinton backed them up.  Then Slick Willie said he didn’t, while Obama said he did and now no one knows who said or did what.

Last we find that the Mayo Clinic has taken the return back scratch to a whole new level – they tried to give a man life itself.  Not any ordinary man, a man who had given them at least $1 Million as this article in the Dallas Morning News states.

In 2002, Baron was diagnosed with multiple myeloma. By October 2008, his doctors at the Mayo Clinic were telling him he had just days to live.

They also offered a glimmer of hope. Over the years, the couple had donated about $1 million to Mayo. The staff was especially diligent, Blue said. They tested an arsenal of drugs and finally discovered that Baron’s cancer responded surprisingly well, in the lab, to a drug called Tysabri.

Mayo had an ample supply, but the drug was – and still is – approved only for treatment of multiple sclerosis and Crohn’s disease. The manufacturer, Biogen Idec, refused to give permission, even under special “compassionate use” rules that protect a drug-maker from a black mark in case of an adverse outcome.

One can and should argue that Baron may not have given all that money in the hopes of getting special treatment in the end, but he certainly got it.  Guess who also jumped in to help:

Somehow – Blue (Baron’s wife) still isn’t sure how – Pelosi cajoled the FDA to find a legal justification that let Mayo administer the drug, even without Biogen’s consent.Pelosi and Rahm Emanuel

“Nancy figured out a way,” she said.

The drug beat back the cancer for a few days, but not enough.

Blue has no illusion that a typical family could pull such strings.

I’m fairly certain I can’t.  And that is disturbing.  These real-life instances of the ruling class deciding who gets what should be especially concerning.  If only the “deserving” are given the special things, the better goods, the privileged services, where will individual freedom be left?

Our elitist ruling class has taken even more power amongst itself with Health Care and Finance reform.  No more are all the decisions in our hands.  We will become dependent upon the grace of the aristocracy for things as common as Health Care.  We will soon become the less equal of the animals at Manor Farm.

The Myths about the Myths of Social Security

For decades we’ve all known the Social Security was in trouble. No more!!  MoveOn.org has calmed the waters and published the truth – all while using an absolute fiction.

This post at the liberal site attempts to convince its readers that there is nothing wrong with Social Security – move on folks, nothing to see here:

Myth: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.3 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever.1 After 2037, it’ll still be able to pay out 75% of scheduled benefits–and again, that’s without any changes. The program started preparing for the Baby Boomers retirement decades ago.2 Anyone who insists Social Security is broke probably wants to break it themselves.

The source of footnote “1” is… yup, another liberally-slanted “news” site, new deal 2.0. To refute this myth about a myth, I submit – The 2009 Annual Report of the Board of  Trustees of the Federal Old-Age and Survivors  Insurance and Federal Disability Insurance Trust Fund (that’s the original name for the Social Security Trust Fund):

Under the long-range intermediate assumptions, annual cost will begin to exceed tax income in 2016 for the combined OASDI Trust Funds.

That just means they’ll dig into their piggy bank right?  Well, that piggy bank is not cash or any other easily liquid assets (stocks, money market funds, etc) – it’s government bonds.  In the event of Social Security running a deficit, they will have to cash in their government bonds, and their holdings aren’t small.  One must also realize that in order for the government to pay those bonds, they will have raise taxes, cut spending or both.  The exact same thing as if dealing with a deficit crisis.

I am not sure how they even throw this next one out with a straight face .. but hey, job security for me.

Myth: We have to raise the retirement age because people are living longer.

Reality: This is red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than did 70 years ago.3 What’s more, what gains there have been are distributed very unevenly–since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half.4But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Checking the footnote source “3” .. The Center for Economic and Policy Research – A progressive economic “think-tank”.  Wow, what right-wing nut job counter-source will I use… uh, I know!  That whacked-out tea party infested non-partisan .. Congressional Budget Office :

Once the baby-boom generation retires, the portion of the nation’s output that the federal government will spend on Social Security will increase by more than 50 percent–from 4.2 percent of gross domestic product (GDP) in fiscal year 2001 to an estimated 6.5 percent in 2030.<

This is just too easy.
Next up… a statement that is only true if you believe the first two falicies:

Myth: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come.5 Right now, high earners only pay Social Security taxes on the first $106,000 of their income.6 But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

But heck, this has been so fun, let’s see who this source “5” is.  The Economic Policy Institute which has a board of directors listing that reads like a collection of union leadership, socialists,and at a minimum heavily left-leaning academicians.

  • Andy Stern – SEIU Founder
  • Linda Sanchez (D-CA 39)
  • Ed Mcelroy – American Federation of Teachers
  • Ron Gettlefinger – United Auto Workers
  • R. Thomas Buffenbarger, Internation Association of Machinists & Allied Workers
  • Anna Burger, SEIU and “Change to Win” (Organized labor group)

I could go on, but you get the point, another progressive site sourced as if it’s a balanced credible source.

Next up, something we’ve all known for decades:

Myth: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States.7 The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market–which would have been disastrous–but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

I cringe at the thought, but yeah.. lemme go check this apparently omnipotent, clarifying and surely factual source.  Hey look, it’s Andy Stern and his union cronies at Economic Policy Institute again.  Now why would organized labor have an interest in Americans feeling secure about Social Security and also getting the rich to put more in than they will ever get out?  Probably because his union workers are going to get the shaft when they realize how badly unions have under-funded their pensions.  If the government can’t bail him out.. he’s looking at the collapse of organized labor.  Now to debunking the myth.. uh check the commentary under the first myth and the next one.. this is just a chain of lies where you tear down one and rest fall upon the weak foundation that first lie set.

I hope I don’t even have to post a rebuttal to this one, because if you’ve understood the rest of the article, it’s unnecessary:

Myth: Social Security adds to the deficit

Reality: It’s not just wrong — it’s impossible! By law, Social Security funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.1

The source, New Deal 2.0 .. again.  As if the actual “New Deal” hasn’t actually perpetuated a deficit crisis, the new version is trying to say that not only did Social Security not cause the issue, it’s actually not even possible.  The first rebuttal should give you enough, but if not.. lemme try again.  During years of excess, the Social Security trust fund does not get to hang on to its excesses.  It has to put that money into government bonds and hold those instead.  Should they run into deficit, they will call on the government to give them cash for the bonds.  Since our government doesn’t have any free cash due to deficit spending… they’ll have to borrow money from somewhere else, raise taxes or cut spending – exactly the same actions as excessive debt.  Because the trust fund gave the government money and it received bonds in return, it holds debt of the U.S. government (I said debt right?).  The treasury got money from someone on a loan basis to cover costs it cannot fund on its own.  Most of us call that operating at a deficit.  Social Security absolutely enables our government’s deficit spending and if they call on the money in those IOUs, it will just get tacked-on.

So MoveOn.org posts an article based on the facts of union-run, far-left, liberal nut-job organizations – gave me something to do, but could really have used a challenge.

Obama is Not a Socialist – He’s Something Worse

A Democracy Corps (left-leaning group started by James Carville) poll found that 55% of Americans polled believe that “Socialist” accurately describes the President.  That seems low and if the question had been changed to, “Does Capitalist describe our President?” I believe the number would have been darned-near zero.

While the Socialist moniker has been tossed about when discussing our anti-free-enterprise leader, I don’t think it’s as accurate as it could be.  Looking back through the history of Socialism, there are many things that point to Obama missing the mark.  Is it because he doesn’t understand the economic principle or that he understands that it is a great distraction or possibly a transition for the framework he feels should actually be put in place in America?

LeninThe Cloward-Piven strategy was intended to create an atmosphere ripe for Socialism, but I believe it’s being used to create what even Lenin lamented on his death-bed.  Lenin had witnessed his dream of a true Socialist government turned into nothing more than, “a bourgeois tsarist machine… barely varnished with socialism.” – the same classist elitism Lenin had struggled to end.

If Obama were a true Socialist, he would be looking for the Utopian society of ultimate equals that Lenin sought  – he is not.  In Verdery’s, What Was Socialism and What Comes Next the author creates a term that describes well one part of what I feel Obama is after: “Bourgeoiscracy” or well-connected party members that use their political office and connections to enrich themselves.

When the press or citizenry hit a nerve, Obama responds (or at least sends Gibby out to respond).  When criticism was leveled at health care reform, Jeremiah Wright or Professor Gates there were speeches, interviews and media events.  The media, pundits and majority of Americans have been calling Obama a Socialist for quite some time.. no reaction, no defensiveness, nothing – why?  It’s the perfect distraction.  He’s not trying to put a Socialist economy in place, he’s focused on the destruction of what is here so he can replace it with something much worse than Socialism: Entitlism (yeah, I had to make-up a new word for this idiocy).

At least Socialism either places value on the amount of work that goes into producing a thing or the end-use value of a product.  Entitlism figures that a person or entity deserves resources or wealth based solely on theKing Barack favor of the government.  In other words, people should get services, food, housing, cars, money because they do what Obama feels they should be doing or have suffered some ill that the ruling class feels is deserving of reward.  It isn’t about what the populace needs (Communism), nor what the country needs (nationalism, fascism or statism), not even what the world needs (One World Government) – it’s about what Obama and his ruling elite feel the commoners deserve.

It seems obvious that the Obama dream is a “Bourgeoiscracy” as a governing framework and Entitlism as the economic framework.  This fundamentally redefines the common good.  While fascist regimes determine what is good for commoners, entitlism allows the elitist Bourgeoicrats to decide who is common. Perhaps the rest of us will be fortunate enough to work for the good of the selected, chosen or preferred citizens – the deserving.

What’s worse is that even supposed conservatives are falling into Obama’s trap.  House Minority Leader, John Boehner, was paraphrased in a Washington Times article as suggesting that Social Security could be fixed by , “..curbing benefit growth by tying cost-of-living increases to the consumer price index rather than growth in wages, and providing benefits only to those who need them”.  Providing goods or services to a citizen based on need, oddly familiar – but still just a stepping stone to where Obama would take us – or a sleight of hand so that we focus on the specter of European socialism while he works to put something else in place.

If Obama was following the communist play book, the first step would be a Socialistic transition: Socialism concentrates on ownership of the means of production and creating a meritocracy.  The phrase, “from each according to his ability, to each according to his contribution” illustrates that contributing to national production merits reward.  And step two would be the Communistic end-game, destruction of property rights, removal of value from goods and services, and modifying the phrase to, “from each according to his ability, to each according to his need”.  Need has nothing to do with his plan.

Obama’s goal define the entitled – the deserving – and make a gradual transition to “from each according to his ability, to each according to his favor with the ruling elite” – enslavement.  Any system of government that decides who gets what based on any criteria will by it’s nature create inequality.  As Orwell portrayed in Animal Farm, “All animals are equal, some are more equal than others”.

Consider just a few of the Obama administration’s policy stances of late:

  1. Illegal Immigration:  Electing not to enforce laws against a set of people regardless of merit (productivity).
    • He has decided that illegal immigrants deserve the benefits of American citizenry because they act in a way desired by the rulers: they vote Democrat
  2. Health Care Reform: Brass-ring style health care insurance at roughly similar costs regardless if someone has taken care of themselves or not.
    • This will make more Americans dependent upon the government for yet another service.
    • Those who depend on government services overwhelmingly vote Democrat: deserving
  3. The ruling elite are planning to push the Union’s corrupt enlistment plan, card-check, during the upcoming lame-duck Congress
    • Unions are an anti-capitalistic force that will help bring about the transition Obama needs on the way to his entitlist dream: deserving
    • Unions vote heavily Democrat: deserving
  4. When Obama took over GM, he abandoned contractual agreements and put Unions above primary bond holders during the bankruptcy
    • The bond holders actually had taken a risk and invested in the company and were not treated fairly in the settlement.  Investors at this level tend to not vote Democrat: not deserving
    • Unions vote heavily Democrat: deserving
    • Unionized labor is an excellent tool for the creation of crisis (strikes, destruction of industry, condemning capitalism): the deserving
  5. Department of Justice dropping the New Black Panther suit against all but one of the poll place intimidation convicts and lowering the remaining convicts punishment substantially
    • The DOJ is alleged to have a new policy that prevents the prosecution of cases where the defendant is black (deserving) and the victim is white (undeserving)
    • The NBPP believes that it stands to seek reparations for it’s members simply because other groups got them: the deserving
  6. Repeal of the “Bush Tax Cuts” that relieve some of the extremely-progressive tax structure on the most-productive in our society
    • Those that will be hit with the Obama tax increase are largely Conservative voters: undeserving
    • The wealthy in our society have already been rewarded for their work: undeserving

Obama’s true goal is not to push us into Socialism.  It isn’t Communism, fascism, or any other currently-defined -ism – it’s somewhere near the authoritarian mess that was Communism during it’s downfall in Russia.  Not Marxism, but something similar to what Stalin put in place when Marx’s ideas failed to create the Utopia it promised.

This is simply my belief of where Obama would like to take the country and the world.  I also believe that real Americans will see this for what it is and turn things around.  2010 is more important than just preventing Cap-and-Trade or card check – it’s about protecting that which made this country great: individual liberty, free-market capitalism, and equality of opportunity.  Capitalism is not a dirty word.  Capitalism is simply being rewarded by a free-market for the product or services offered.  Those that color it negatively desire wealth for which they have no desire to work or take the necessary risks.  They feel that they are entitled to it.

Redistribution of wealth according to favor of the ruling elites is precisely the type of  Tyranny the founding Fathers worked so hard to prevent.  Obama’s disregard for the Constitution appears to be a purposeful plan.  Depending upon our status with the leadership we will either be relieved of our property or given someone else’s.  Deserving or undeserving, how will you rate?

Californians Fear Crisis Threatens Liberal Benefits

A co-worker brought up an interesting point when we were discussing the Greek crisis.  He said, “California isn’t really in all that different shape”.  That sparked an idea,  I decided to take the very next EU citizens mad about losing entitlements article and put California everywhere the disgruntled Europeans were represented.  The article that showed up is from the New York Times and was published on May 22, 2010.  Steven Erlanger’s original article can be found here.  I am not claiming to have written the original article nor would I say that Mr. Erlanger approved the wording changes.  This is a fictional work for the purpose of demonstrating how close we are to experiencing the E.U. nightmare.

Sacramento — Across California, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the state budget has also undermined the sustainability of the Californian standard of social welfare, built by left-leaning governments since the end of World War II.

Californians have boasted about their social model, with its generous vacations and early retirements, its health plans and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

But all over California with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.

With low growth, low birthrates and longer life expectancies, California can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes. The state is trying to reassure investors by cutting salaries, raising legal retirement ages, increasing work hours and reducing health benefits, pensions and welfare.

“We’re now in rescue mode,” said a state official, “But we need to transition to the reform mode very soon. The ‘reform deficit’ is the real problem,” he said, pointing to the need for structural change.

The reaction so far to government efforts to cut spending has been pessimism and anger, with an understanding that the current system is unsustainable.

In Los Angeles, Aldo Cimgin is 52 and teaches photography, and he is deeply pessimistic about his pension. “It’s going to go belly-up because no one will be around to fill the pension coffers,” he said. “It’s not just me; this state has no future.”

Changes have now become urgent. California’s population is aging quickly as birthrates decline. Unemployment has risen as traditional industries have shifted to Asia. And the region lacks competitiveness in world markets.

According to the California government, by 2050 the percentage of Californians older than 65 will nearly double. In the 1950s there were seven workers for every retiree in advanced economies. By 2050, the ratio in California will drop to 1.3 to 1.

“The easy days are over for states like California, but for us, too,” said John Z. Smith, a New York lawyer who did a study of California in the global economy. “A lot of Californians would not like the issue cast in these terms, but that is the storm we’re facing. We can no longer afford the old social model, and there is a real need for structural reform.”

Spare the Rod, Spoil the Country

Scott Redler penned an article on Forbes.com that discusses how all the bailouts and rescue plans are setting the global economy up for a terrible fall.

Well, I’ve got news for you: Spoiled children always grow up dysfunctional.  Rewarding nations for overspending and under-delivering sets a dangerous precedent. “Le Tarp” gives money to countries that have disregarded basic economic principles. It rewards bad behavior.

Similar to the warnings many were issuing for the bailouts the U.S. government has been handing out, Scott hammers home the point that rescuing the irresponsible simply rewards the wrong groups.

The ones that played by the rules will find loans more expensive, capital for growth harder to come by, and taxes higher. Greece’s long-term borrowing costs plunged to 6.5% from 12.4% and Germany, which provided the bulk of the bailout funding, saw its rates rise.

If we look inward, we can see where we will soon be faced with similar choices to Germany.

California, the eighth-largest economy in the world, faces a grave budget crisis that will likely need to be addressed by the federal government sooner or later.

greek protestNot only will this likely be handled with Federal assistance, it will be done without forcing California to make any cuts whatsoever.  At least the German assistance came to Greece at a price.

People in Greece are upset that they now have to give up their Christmas, Easter and summer holiday bonuses, also known as 13th and 14th salaries.

Just last week, California’s Governor Schwarzeneggar proposed serious cuts in State entitlement programs because California was simply broke.  The protests and popular uproar was huge.  If the California legislators are forced to make those severe cuts, why would we expect to see anything but riots similar to those in Greece?

If we are to get things right in our own house, it will take serious cuts in government programs – health care reform, Social Security, Medicare, Medicaid, and defense.  It may require a restructuring of our tax code so that everyone puts something into the kitty and perhaps a bit more than most already do.  It will certainly cost many politicians their seats, but that is the most pleasant of what must come.

The New Party of No

Republicans talk about lowering taxes and getting our deficits under control.  In reality, they only manage half of that promise.  Now Obama is jumping on the budget-hawk bandwagon saying that after we spend $1 Trillion+ on his entitlement program, we should cut domestic spending.  According to Bruce Bartlett’s book, “The New American Economy: The Failure of Reaganomics and a New Way Forward”, there is very little room to cut domestic spending.  If we take away defense and entitlement spending the total discretionary domestic bill comes to only $485 Billion and last year’s deficit was $459 Billion.  We would have to cut every domestic program like education, the FBI, NSA, highways, etc.  The only alternative is to start looking at those entitlement programs or accept that we all need to pay significantly higher taxes.  Obama can’t do anything to cut the deficit other than go against his promise of no taxes on the middle class.

For years, liberals have pointed and the GOP and called them the “party of no”.  While Republicans have shot down many liberal programs, they have been far from full-on naysayers to public spending.  The Bush administration, with a GOP majority in Congress had no trouble spending on things that we had no right paying for.  While they made a half-hearted attempt to reform Social Security, they actually accomplished nothing other than a tax-cut.  Spending stayed the same, but income dropped – voila, it’s a deficit.

Conservatives have to now step-up and be the real party of no.  No to everything that requires government spending and finding a way to phase-out current entitlements.  If political candidates offer programs in order to get votes, change their mind or deny them the vote.  The only alternative is to accept that we need massive new taxes to cover these programs.  It’s cut spending first, then figure out where taxes need to be.  Lowering taxes while continuing to spend like drunken sailors is not the answer.

The non-partisan Congressional Budget Office Director’s Blog contains the Long-Term Budget Outlook.  The Director points out what we have all known for way too long:

“Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run … Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.”

He goes on to basically say that we cannot afford the increasing costs of the public programs that Americans have been promised and now expect.  The changes that will be needed will either require massive new taxation or fundamental privatization or cutting of entitlements.

I will be writing fewer articles but going much more in-depth to investigate the programs being pushed in Congress and who to contact to inform them that we don’t want any new programs that require government funding.  Two major areas of interest will be addressed in future articles: new government spending that must be stopped, and current spending that needs to be phased out or ended.

The obvious programs to prevent becoming law are:

The entitlements we need to consider privatizing, phasing out or ending:

  • Medicare
  • Social Security
  • Education

No matter which things we attack and how fast, we will have to make the sacrifice that we will need to continue to pay the taxes to fund these programs through their phase-out.  Many of us have paid into them for decades and will pay into them for decades more only to get nothing.  It’s not for us.  It’s to give our children and grandchildren a debt-free country or at least certainly one that is not bankrupt.  We must decide that we do not wish to be the generation that bankrupted America.

Recent Entries »