Skip to comments.Vanity: So when will the "Entitlements Crash" occur?
Posted on 11/10/2012 6:31:59 AM PST by The Working Man
The question that arises in my mind now is this: When will the "Entitlements Crash" occur?
First off by "Entitlements" I mean those programs that the Government has labeled as such. Social Security in it's myriad forms, Medicare, Medicaid, ObamaCare/Health care mandates, and a all of the rest of similar programs.
Next a "Crash" is like the stock Market Crash of 1929.
As I see it we will probably see the "Entitlements Crash" in mid 2014 and at the latest by early 2016. Why then? Well I expect that the U.S. will see at least 70% to 80% of the population on "assistance" of one sort or another probably food stamps/EBT. The remaining workers/producers/taxpayers can't pay enough in taxes to fund those programs as well as the other Government programs.
I also believe that Treasury bonds will have to have exorbitant rates of return before anyone would even think of purchasing them. That will come about as our Credit rating slides down towards "A" from the "AAA" it was when Obama became president in 2008. To me that will indicate that our borrowing will be at an end. The old "I'll gladly pay you on Tuesday for a hamburger today" will be over and done and tromped into the ground.
So... With demands for services way up! And income WAY down. Something will give, Bankruptcy or simply halting those services or at the least knocking them way back. An "Entitlements Crash".
So for me it will come as early as 2014 or as late as mid 2016. What about you? What do you think?
You’ll know when it happens.
I dunno, just ask a Greek how long it took there.
Why do we always here about the billions of dollars that will be cut from the defense budget due to the sequestering deal at the end of the year, but we never hear that an equal amount is supposed to come from cuts in entitlements? Is is because the Obama Socialists have no intention of cutting those, no matter the “deal” they supposedly made? The entire cut will probably come from defense, because they always support that.
The Democrats lied to Reagan and didn’t cut spending after he raised taxes. The Democrats lied to Papa Bush and didn’t cut spending after he raised taxes...and even crucified him in his re-election bid because he raised taxes!
So Republicans who would raise taxes now, on the worthless promise of the Democrats that spending will be cut, are really too stupid to hold office.
It will start in California, we’re about 80% there.
Productive taxpayers and businesses continue to flee the state (there is a premium on U-hauls leaving California) - and destitute immigrants continue to pour in.
We’re flat out of “other people’s money.”
In 50 years, the politicians in Sacramento have ruined my home state of California.
— Michael Reagan
3 Scenario’s -
1. Never, Bernake has promised to print money(electronic transfers) to accommodate the Democrat’s financial failure(spending).
2. Sooner, Starve the Beast 2.0 is effective in lowing revenue to GDP, Democrats and the media can only hide the negative macroeconomic effects for so long.
3. Between 1 & (1/2) and 3 years out, as many others have predicted.
There will not be a entitlement “crash” as a time when the EBT card stops working...
It will be a slow devalue of such entitlements....
SS will be first since seniors are going to die anyway and will eat cat food without rioting
Final election results are in:
No amount of explaining can make these fools understand. The “everybody gets a trophy” mind set will not be swayed. Which one would they vote for?
1. I’ll take care of you.
2. You’ll have to work and be responsible for yourself.
Helping keep mankind warm for 65 years.
This “crash” may come much more quickly than most anyone might imagine.
Daily, there are reports and anecdotal tales of businesses that are either about to close, or shall very soon, as they cannot operate profitably because of sharply rising taxes, or draconian regulations that seem to be written for the express purpose of bankrupting what productive capability we have remaining.
Bankrupt businesses do not hire people. Self-employment, if subjected to too much regulation, responds by going underground, operating on cash-only or barter basis, further eroding whatever tax base remains.
There is every reason to believe this will have a snowball effect beyond anything the United States has ever experienced.
Declaring a date of 2014 to 2016 may be unduly optimistic.
SNAP (”Food Stamps”) is not what’s breaking the bank (its around 2.1%, expected to go to around 2.2% in 2014, declining to around 2.0% by 2020.
Even if you include all “safety-net” spending (excluding Medicare, Medicaid, and CHIP) it’s around 13%, and is projected to decline slightly by 2020.
The first stage of the “crash” (actually, a “slide”) kicks in about 2 years out as a result of Medicare and Medicaid costs.
And that’s not just a problem of “Government Spending”, it’s a systemic, cost-driven crisis in the entire health care system.
If you want to learn more about this, I recommend:
“Healthcare Beyond Reform: Doing It Right for Half the Cost”
Only a minor correct, you had it almost entirely correct. My compliments.
Former President Reagan increased revenues after eliminating deductions (minor ones). The deductions eliminated were deductions (mostly) for those in lower income brackets. Then came the deal, the hand shake, the jobs (lots of jobs), and increased revenue from jobs created. It became a boom in no time. Incomes increased, jobs increased, revenues increased. This time the situation is a little different. There is no jobs plan or methodology whereby the democrats are interested in job creation, at least not from what have seen. No jobs, equals less revenue. Also there were tax cuts to create jobs. No such plan this time. I pray you are not angry with me for typing this bit of information. I really think you did a fine post. And btw ... what do I know? I only alive during that time of President Reagan's successful deal. It was a wonderful time.
1. Social Security Disability Insurance claims have risen dramatically in the last few years, and it is pretty well understood that a lot of permanently unemployed people whose unemployment benefits have expired are collecting SSDI to replace their unemployment benefits.
2. The number of employed Americans relative to the total population has continued to decline, regardless of what the official unemployment figures indicate. This has occurred even as Social Security and Medicare outlays have increased dramatically as Baby Boomers begin to retire.
3. Coupled with the previous point, average incomes in the U.S. have declined in the last few years -- and payroll tax revenues have declined with it.
Get out of blue areas, WROL will be lethal there.
Amazon CEO Jeff Bezos donated $1 Million to promote same sex marriage this election cycle - I wouldn’t buy my last meal from him.
It’ll happen immediately before the inflation crash - the day when the government has printed so much paper money to cover its bills and other expenses that it takes a wheel barrow full of money to buy a loaf of bread.
Good-bye savings account, good-bye retirement account, good-bye rainy day account, good-bye cookie jar account. King Hussein the First, of Kenya, will see to it that you have all the cardboard shoes you need and all the tree bark you can eat.
-——Self-employment, if subjected to too much regulation, responds by going underground, operating on cash-only or barter basis, further eroding whatever tax base remains.-——
I run a business that services exclusively to the self employed...
I have an in house account for people who want to buy off the “ books”
In the last two years it is my # 1 account now...it was basically used for new customers until they were set up with a customer number...
People are doing exactly that....avoiding regulation which means avoiding taxes just to survive ...
It wil only get worse ....
Nope, the authour is ignoring all the other probable results out there:
Military coup (Obama would call it a "coop")
Well, I don’t think it will be four years. Obama drove the debt up from 60 percent of GDP up to 120 percent of GDP. Japan hasn’t collapsed yet with around 200 percent of GDP, although they have gotten their spending under control.
I figure Obama will drive up the debt to around 180 percent of GDP, around where Greece sits today. That is close, but not quite into death spiral territory.
“So for me it will come as early as 2014 or as late as mid 2016. What about you? What do you think?”
2020 if steps are not taken to correct the current fiscal trajectory of the United States. It takes a lot to drive the worlds largest economy into bankruptcy, and Obama is only a third of the way there.
The problem is also demographics, although not in the way you might think.
Who’s going to buy the stuff once the boomers are gone? The economy is under heavy deflationary pressure. With such a high debt level and such a weak underlying economy - this is a recipe for big trouble.
Answer:.......EDUCATION! ( K-12 is the worst offender).
Here are two suggestions that would kick-start the economy immediately and cost the taxpayer NOTHING;
1) Pay every family $5,000 for each child who does not attend their government assigned school.
2) Remove all age restrictions on the GED. Give any child who passes the GED or similar private exam an official government diploma to be issued by their local high school. ( Actually, all children should be required to pass the GED or similar private exam to graduate.)
Something will give, Bankruptcy or simply halting those services or at the least knocking them way back. An “Entitlements Crash”.
Nope, the author is ignoring all the other probable results out there:
Military coup (Obama would call it a “coop”)
I wasn’t ignoring your “options”, I just think that they will come after the “Entitlements Crash”. Why? For me it comes down to a couple of things. Social Inertia is the biggie. Society doesn’t change its “Mind” very quickly or easily, it takes a long time to do that. Some people call that the “Normalcy Bias”
Secondly is the “Comfort factor”, some call it “bread and circus”. As long as our woes are bearable all the people will do is bitch about it. It’s only when there are empty stomachs growling because they’ve forgotten what it was like to be full and bodies that are too hot or too cold, because their Air Conditioners don’t work anymore or they don’t have warm clothing anymore, that people look outside their misery to put the “blame” on a perceived oppressor, be it real or imagined.
Then your riots will happen, coup attempts will be made, Revolution will be inevitable.
One of the top stories on Yahoo:
Why Social Security is Running Out of Money
Thanks, will do.
Soon, I suspect.
Its Free Swipe Your EBT (Clean)
That’s so true. And refusing critical health care for old people will get them off the rolls more quickly. The Death Panels will be busy saving money.
Yep - and you better be armed when they realize that the cow has been eaten and only the stinking carcass remains...
I don’t understand why the Boomers are so passive.
You bring up a good point. we(conservatives) need to
find out each liberal owner and corporation etc and not do business with them.
I dont understand why the Boomers are so passive.
That’s a good question. The answer is a long a complicated one. I think it has to do with our early formative years. Our parents made it out of the second world war alive. Which was a big deal!
Then there was the Korean War, The Cold War with the threat of total annihilation literally over our heads at any time. Then then the Viet Nam War. War, War and add on to it a little bit more war.
What happens to a child under those sort of pressures is that they become a bit passive. What will be, will be. You see it in children of abuse today. Now write that on a large scale for an entire generation.
To revise and extend, am of the belief we have to allow the economy to crash. Want to make it clear. Am proposing a CRASH. It is going to happen sooner or later. Sooner maybe is the best option. My children and grandchildren may have a chance if it happens sooner. The crash is inevitable, or as Travis’ post shows the waterfall.
I think it’s 2020 for Medicare and then 2035 for Social Security. I can’t remember the dates exactly, but that’s roughly when it is.
I too think it’s all going to crash, economy, entitlements, government.
Why I believe that is an interesting thing, it doesn’t have to do with graphs on the economy, spending or other similar things. I believe it because I think that there is a self-destructive quality about societies. It’s not the society is a bad thing, far from it. I think that what happens is that we tinker with it trying to make it “better”. The problem is of course, better for whom?
When you get to many tinkerers in there trying to make it come out their way of “Better”, Society is pushed beyond what is optimal for all. A point comes when it has to crash and re-start as something different than what failed.
I think we are there now or at the least very soon.
Within the next year. We are simply out of financial options to keep this sucker alive any further.
Thanks for scaring the crap out of me. And thanks for the warning...
We should start a thread here listing the companies and why
As soon as a Republican is back in the White House.
Why do we always here about the billions of dollars that will be cut from the defense budget due to the sequestering deal at the end of the year, but we never hear that an equal amount is supposed to come from cuts in entitlements?
Because the Republicans are idiots. During the last debt ceiling debate, Boner and the morons in the GOP controlled House caved in and agreed to a Democrat proposal to automatically slash defense spending upon inability to agree to other government cuts.
The GOP are the Stupid Party, just getting more stupid every session. They can’t stand to win and are very very good at losing.
“Declaring a date of 2014 to 2016 may be unduly optimistic.”
It may be VERY unduly optimistic but one thing I have learned is that Old Rip Sawyer is not a good judge of the timing, I am amazed that we have not collapsed already. Things are in terrible shape but not as bad as I expected by now.
I’ve read those, good stuff.
If I leave my blue area, what do I do with all of the ammo :)
I hate the north anyway, liberals displace and project their feelings, the most bigoted/racist people I`ve ever met are up north, black, white, brown, it doesn`t matter. People down south are pretty cool if you act like a human being and not some ghetto/bario/trailer-trash waste of a human life.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.