Posted on 02/03/2021 6:39:11 AM PST by Kaslin
Medicare is functionally insolvent, people are getting way more from entitlements than they paid in, and Congress has been spending like drunken sailors for decades with no signs of stopping.
Two data points explain the current debate in Washington on more rounds of COVID spending. The Biden administration’s repeated statements that “the risk is not…going too small, but…going not big enough” reflects a position Joe Biden publicly articulated while serving in the Obama administration a dozen years ago:
Biden: We Have To Spend Money To Keep From Going Bankrupt
As to the cumulative effects of these policies, the budget resolution itself tells the tale, with its projected estimates of the total national debt over the coming decade:
(5) PUBLIC DEBT.—Pursuant to section 4 301(a)(5) of the Congressional Budget Act of 1974 (2 U.S.C. 632(a)(5)), the appropriate levels of the public debt are as follows:
Fiscal year 2021: $29,943,000,000,000.
Fiscal year 2022: $31,647,000,000,000.
Fiscal year 2023: $32,911,000,000,000.
Fiscal year 2024: $34,102,000,000,000.
Fiscal year 2025: $35,262,000,000,000.
Fiscal year 2026: $36,311,000,000,000.
Fiscal year 2027: $37,261,000,000,000.
Fiscal year 2028: $38,443,000,000,000.
Fiscal year 2029: $39,652,000,000,000.
Fiscal year 2030: $41,068,000,000,000.
To provide some sense of perspective, the most recent gross domestic product estimates show the size of the American economy at $21.5 trillion on an annual basis. In other words, our total national debt (including IOUs placed in the Medicare and Social Security Trust Funds) already exceeds the size of our economy. A decade from now—after an additional $13.6 trillion in deficits under the Democrat budget—our debt will approach twice the size of our economy now.
Contra Biden circa 2009, that’s not “spending money to keep from going bankrupt”—that’s already bankrupt.
Without a doubt, many American families and small businesses are hurting due to the pandemic, and the lockdowns associated with it. These individuals and businesses deserve some level of assistance to overcome the government-mandated lockdowns, reopen their establishments, and get on with their lives.
But a spending spree that would give $5,000 in “stimulus” payments to a family of five making $250,000, or Obamacare subsidies to households earning $300,000, far exceeds the reasonable or even rational limits of federal aid. Rather, it epitomizes a myth that politicians of both parties have perpetuated for far too long: That the American people can have more government than we can afford.
Mitch Daniels, the former Indiana Republican governor and Office of Management and Budget director now heading Purdue University, eloquently made this case in the Washington Post last week:
I conclude, reluctantly and dejectedly, that it’s time to face the unpleasant facts. The past decade demonstrates amply that our political process is not capable of the kind of decisions that are necessary. The temptation to savage anyone proposing safety-net reform (the sine qua non of any serious fiscal rescue, really the only issue that matters) remains electorally irresistible and invariably effective.
Because politicians believe they can profit by attacking anyone who proposes changes to entitlements—e.g., Paul Ryan throwing grandma off a cliff—leaders in both parties have abandoned any attempts at reform, such that we may have passed a fiscal “point of no return.”
Daniels cited the “noble lies” that politicians have used over the years to avoid making necessary but unpopular fiscal choices. To correct three of the most popular misnomers:
No. 1: You Haven’t “Earned” Your Medicare Benefits: According to the Urban Institute (not exactly a home for firebrand conservatives), a single male making average wages who retired in 2020 paid in a total of $81,000 in Medicare taxes over his working life, but will receive a total of $229,000 in Medicare subsidies. Those gaps will continue to grow over time, such that a retiree in 2060—someone just starting his or her working life at present—will pay $133,000 in Medicare taxes, but receive $573,000 in benefits.
No. 2: Medicare Is Functionally Insolvent: Not least because of No. 1 above, Medicare has already exhausted its trust fund. In 2009, the program’s last trustees report before Obamacare’s enactment showed an insolvency date of 2017. In other words, for (at least) the past four years, Medicare has stayed afloat only because the tax increases and Medicare reductions included in Obamacare have been used to both fund that law and address Medicare’s solvency—an illogical budgetary gimmick born of government trust fund accounting.
This fiscal sleight-of-hand not only didn’t really improve Medicare’s fiscal condition, it also encouraged politicians to ignore the program’s underlying problems to this day. It also reinforces the pernicious Democratic policies that would raid Medicare to pay for other spending, whether the current “stimulus” bill or a single-payer health care system.
No. 3: Tax Cuts Don’t (Fully) Pay for Themselves: Yes, lowering tax rates, particularly on capital gains and investment, can unlock productivity gains in the economy that generate additional revenue. But that additional revenue only offsets part of the fiscal impact of tax relief, which is why conservatives must also work to reduce our unsustainable spending levels.
Also last week, former House Majority Leader Eric Cantor, R-Va., took a tone similar to Daniels’s. In discussing Obamacare repeal in 2013 and the aftermath of last year’s election, Cantor in both cases blamed “an unwillingness to speak truth to power”—for politicians to tell their constituents facts their constituents didn’t want to hear.
Notably, Cantor’s exhortation for elected leaders to speak the truth didn’t include anything about the unrealistic and unsustainable fiscal promises politicians have made to their constituents for decades. In some respects, Cantor epitomized that problem, by his own admission nixing the chance of an entitlement “grand bargain” between then-House Speaker John Boehner, R-Ohio, and President Obama.
The rioting and violence at the Capitol a few weeks ago was both a horrific and tragic event in American history. Yet I fear the tumult throughout 2020 may pale in comparison to the not-too-distant future, when the American people finally realize their leaders have systematically lied to them for decades. To paraphrase the Book of Hosea, Congress and presidents have sown the wind—but on our current fiscal course, we all stand to reap the whirlwind.
So... the western economies continue to borrow themselves into indentured servitude to the Bankers, Eventually the Bankers own everything and everyone and the people are treated like cattle, to be managed for resources or slaughtered. For the Love of Money/Power/Control great Evil comes forth, and Satan Laughs.
Modern slavery is not bound with physical chains, it is walked into voluntarily with debt and enforced by contract law
In a few years???We be there. The American public won’t do anything until their bank accounts are effected and stomachs empty.......
Back before Trump was elected, I told people that we’d probably be done in less than ten years. By trump’s second year, I said I thought it would be less than five. And to be clear, that has nothing to do with Trump. I think he helped extend our life.
But by late 2019, I was saying 2020 would be the last “normal” presidential election we would ever have, and even it might not be normal. And here we are.
And regarding the economy, before the virus thing I saw it collapsing within five years. And then we destroyed the economy (yes, past tense. We are an airliner with no fuel left, gliding our way down from 35,000 feet into the ocean).
I don’t see it going more than two years, and even they will be rough. And I’m talking internationally. Not just the US. This also explains my tag line from last year.
kicking the can down the road has been a business model for the .gov for a while now ..
...people are getting way more from entitlements than they paid in...
The food shortages will be a problem.
The gas price spike will be a problem.
Rising interest rates and inflation will be a problem.
Rising unemployment will be a problem.
When people are personally affected by their “choice” of Biden (that they did not challenge the unconstitutional rule changes to voting, that they did not challenge different standards within a state for voting or curing ballots, that they did not challenge the clear and obvious fraud that occurred) then they will get angry.
This does speak to why I left Seattle for rural KY and 32 acres I control.
This is why I picked up 20 chickens in June. And a couple of Roosters to up the flock if necessary.
I wonder why the author didn’t cover how MILLIONS are getting more from MEDICAID, than they ever paid in.
If it was covered, then I missed it, as I glossed over the article.
It’s crazy.....people who have (mostly) NEVER paid into a system, get lifetime healthcare and longterm care...including longer term, in home care and all med supplies....while folks who’ve worked hard and paid into system get limited Medicare benies.
Silver and ammo. If silver doesn’t hold any value, I can throw it.
Let’s just print a Quadrillion dollars and get it over with.
... kicking the can down the road has been a business model for the .gov for a while now ..
Reaganomics put the debt buildup on steroids in 1980, permitted by dropping off the gold standard In October 1976
More true than you may know. We are totally bankrupt, the whole central banking system is bankrupt. Total collapse. Trump is planning to replace it with a quantum currency backed by gold, silver and platinum.
We’ll never go bankrupt as long as they can print money !!
and yes this is sarcasm for the mentally challenged.
I’ve wondered how we were getting away with it, more or less, for 25 years.
I have no doubt this is coming. the only unknown is when and some details of how.
We woke up one morning, read the newspaper and learned the USSR was kaput. Yesterday it was fine, today it was gone. It happened that fast.
Folks, study what happened to the USSR. It is a very interesting study.
The article doesn’t include unfounded liabilities at state and federal levels. All total Ed around $90tr
Gold should be 10K/oz by now....
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