Glenn BECK: REASONABLE QUESTIONS for AN UNREASONABLE TIME

www.glennbeck.com ^ | Monday, August 24, 2009 | Glenn Beck

[Yosemitest]

Reasonable questions for unreasonable times
Monday, August 24, 2009 - 18:05 ET

Am I hateful if I ask:



- Our unfunded liability for Social Security, Medicare and Medicaid is close to $100 trillion.
Is there any way to pay for these programs without bankrupting America?

- We are in so much debt,
why spend more borrowed money on cap-and-trade and healthcare programs
before we stop the flow of red-ink?

- The stimulus package funneled billions of dollars to ACORN.
How does giving billions of dollars to ACORN
stimulate the economy?

- If it was so important for congress to pass the stimulus bill
before they even had time to read it
why has only a fraction of the stimulus money been spent 6 months later?

- Bush said
he had to abandon free market principles in order to save them,
how exactly does that work?

- Why won’t member of Congress read the bills
before they vote on them?

- Why are citizens mocked and laughed at
when they ask their congressman
to read the bills before they vote on them?

- Was the cash-for-clunkers program meant to save the earth or the economy?
Did it accomplish either?

- How did Van Jones, a self-proclaimed communist
become a special advisor to the president?

- Did President Obama know of Van Jones’ radical political beliefs
when he named him special advisor?

- The Apollo Alliance claimed credit for writing the stimulus bill—
why was this group allowed to write any portion of this bill?

- If politicians aren’t writing the bills
and aren’t reading the bills,
do they have any idea what these 1000 page plus bills actually impose on the American people?

- If the ‘public option’ health care plan is so good
why won’t politicians agree to have that as their plan?

- If town hall meetings are intended for the politicians to learn what’s on our mind—
why do they spend so much time talking
instead of listening?

- Politicians are refusing to attend town hall meetings
complaining, without evidence, that they are scripted.
Does that mean
we shouldn’t come out and vote for you since
every campaign stop, baby kiss and speech you give
is scripted?

- Why would you want to overwhelm the system?

- Is using the economic crises to rush legislation through congress
what Rahm Emanuel meant
when he talked about not letting a crises go to waste?

- What are the czars paid?
What is the budget for their staffs/offices?

[tacticalogic]

Every unfunded liability is an asset to its eventual beneficiary, if paid, and not a liability to the taxpayers, if not. They cannot change the net worth of the citizenry, because they merely move it from one person to another.

If there wasn't any loss in process, that would be true, but there is. As you have said, the money just keeps recirculating, but there is some loss to waste, fraud, and bureaucratic/administrative overhead, and that loss accumulates with every cycle.

[JasonC]

That is an effect on income and fully funded by our continuing income like any other item of consumption. You might as readily say that because men eat they must eventually starve to death. Again, it is nonsense.

Is there an efficiency loss *compared to the wealth we'd otherwise enjoy* from shifting resources from where the market would put them, to where our votes decide to put them? Sure. But it isn't a spending to zero of our existing wealth, it is merely an opportunity cost of additional gains in that wealth, foregone.

No spin can make us poor. Look around you, every useful convenience you see and all the services it produces is own and owned exactly once and owned free and clear. Everything else nets out to zero. No verbal sleight of hand can make those buildings and businesses disappear. It's hopeless, we are not poor and we aren't going to be poor. Men in the Congo are poor, you can see it in the wastes surrounding them and the squalor in which they must live. We are not.

[tacticalogic]

Don't confuse debt with unfunded liabilities.

And you never said what time frame.

The unfunded liabilities seem to be mostly in Medicare and Social Security, so the time frame looks to be around 30 years.

The demographics of the situation are that the bulk of it will be sooner, rather than later. The baby boom generation is starting to retire. All the money they put into SS that was supposed to pay their benefits has already been spent on other things, and there isn't enough money coming in to cover the projected expenses. How can that not translate into debt?

[Toddsterpatriot]

The unfunded liabilities seem to be mostly in Medicare and Social Security, so the time frame looks to be around 30 years.

Normally, when they talk about those shortfalls, they're talking a 75 year time frame.

The figures I've seen for the unfunded liabilities of the federal government are at 59T. That's more that the net assest of the US households

That is similar to noticing your mortgage is larger than your net worth while ignoring your income over the next 30 years.

[tacticalogic]

Is there an efficiency loss *compared to the wealth we'd otherwise enjoy* from shifting resources from where the market would put them, to where our votes decide to put them? Sure. But it isn't a spending to zero of our existing wealth, it is merely an opportunity cost of additional gains in that wealth, foregone.

The premise seems to be that for every dollar that gets sent to the federal government in taxes for entitlement programs, another American will always get a dollar back. The only loss is the loss of any return that might have been had from investing it. Bureaucratic/administrative overhead, waste and fraud are assumed to be 0.

[Toddsterpatriot]

All the money they put into SS that was supposed to pay their benefits has already been spent on other things, and there isn't enough money coming in to cover the projected expenses. How can that not translate into debt?

If the government borrows to pay those benefits, that definitely translates into debt. Until then, it's not.

Congress could cut Social Security in half and suddenly the unfunded liability would drop to zero (or whatever) so it is clearly not the same as debt.

[Petronski]

The figures I've seen for the unfunded liabilities of the federal government are at 59T.

Due when?

Not due now, due over what period of time?

Let's say it's 30 years, at $13T GDP, that's $59T of unfunded liabilities to be paid by taxing $390T in GDP.

Love your tagline.

[tacticalogic]

Normally, when they talk about those shortfalls, they're talking a 75 year time frame.

The demographics aren't being taken into account though. Looking at that over a 75 year time frame doesn't seem to present an accurate picture of the situation if 75% of the liability has to be paid out in the first 25 years.

[tacticalogic]

Let's say it's 30 years, at $13T GDP, that's $59T of unfunded liabilities to be paid by taxing $390T in GDP.

When they say "unfunded", I'm assuming they're looking at projected outlays compared to projected receipts. The taxes have already been taken into account. Is that not the case?

[Petronski]

I don’t know, but I presume the answer is yes.

[tacticalogic]

Congress could cut Social Security in half and suddenly the unfunded liability would drop to zero (or whatever) so it is clearly not the same as debt.

If they can arbitrarily do that, then calling it a "liability" doesn't seem line up with the way the term is normally used.

[tacticalogic]

I don’t know, but I presume the answer is yes.

Then that's 59T of unfunded liabilities to be paid by taxing $390T in GDP, on top of what we're already paying.

[Toddsterpatriot]

The demographics aren't being taken into account though.

The 75 year time frame takes into account everything.

[Petronski]

Of course.

But it’s not $59T due now, or even this year.

[tacticalogic]

But it’s not $59T due now, or even this year.

Of course it's not. But it still represents an average 15% loss of take-home pay to wage earners for the next 75 years, assuming the GDP and the size of the workforce remains stable. If we're on the cusp of an extended period of recession, and if additional factors like Cap and Trade reduce our production, and unemployment stays up, then that's going to exacerbate the situation for the remaining wage earners.

If GDP and the size of the workforce drops, that's going to require an increased percentage of GDP siphoned off in taxes to meet those liabilities.

[Toddsterpatriot]

But it still represents an average 15% loss of take-home pay to wage earners for the next 75 years

No one works for 75 years. For some portion of those years, you are collecting those benefits.

[JasonC]

Wrong, the assumption is that for every dollar actually spent on a currently unfunded liability, someone reveives that dollar. This is the definition of "spent".

[tacticalogic]

Wrong, the assumption is that for every dollar actually spent on a currently unfunded liability, someone reveives that dollar. This is the definition of "spent".

So all the fraud, waste, and bureaucratic overhead is still "someone receiving that dollar", even if it didn't go to any intended recipient?

[JasonC]

That is why the government doesn't call it one, and doesn't fund it. External watchdogs worried about whether it will eventually be paid and if so how, call it a liability. Beck among them.

There is such a thing as a fully funded pension plan. In such a plan, the earnings on capital of the sums originally deposited pays for all of the claims made against the plan. The unfunded liability calculation is the capital sum that would suffice to move to a fully funded pension plan, with no reduction in benefits as promised today. (Which is a promise of great whopping increases per person as far as the eye can see, by the way, not a promise to maintain existing levels of spending, even per capita).

Fully funded pensions are preferable from an economic point of view, because men first save to accumulate the capital involved, and they enjoy all of the real benefits to productivity that real capital supplies. Saying that a fully funded plan is preferable is equivalent to saying "savings are good", and that we'd be better off with more of them. This is correct as a principle, and gradually and affordably transitioning from the present unfunded system to a fully funded one, is a good idea.

Which is not remotely the same as saying no one owns any wealth because they owe all of it to a nameless money-pit in the sky.

[JasonC]

Which part of "spent on" is giving you trouble?

The present value of future benefits calculation is for the amounts actually received.