Obstacle to Deficit Cutting: A Nation on Entitlements

Wall Street Journal ^ | SEPTEMBER 14, 2010 | SARA MURRAY

[reaganaut1]

Efforts to tame America's ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.

At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

A little more than half don't earn enough to be taxed; the rest take so many credits and deductions they don't owe anything. Most still get hit with Medicare and Social Security payroll taxes, but 13% of all U.S. households pay neither federal income nor payroll taxes.

"We have a very large share of the American population that is getting checks from the government," says Keith Hennessey, an economic adviser to President George W. Bush and now a fellow at the conservative Hoover Institution, "and an increasingly smaller portion of the population that's paying for it."

The dimensions of the budget hole were underscored Monday, when the Treasury reported that the government ran a $1.26 trillion deficit for the first 11 months of the fiscal year, on pace to be the second-biggest on record.

Yet even as Americans express concern over the deficit in opinion polls, many oppose benefit cuts, particularly with the economy on an uneven footing. A Wall Street Journal/NBC News poll conducted late last month found 61% of voters were "enthusiastic" or "comfortable" with congressional candidates who support cutting federal spending in general. But 56% expressed the same enthusiasm for candidates who voted to extend unemployment benefits.

[reaganaut1]

We will need rationing of what Medicare pays for. I'm not willing to pay an unlimited amount to keep grandma or grandpa alive for another month. People who want unlimited health care had better save for it and/or buy Medicare supplements.

[poobear]

They’re just now figuring this out?

“Yet even as Americans express concern over the deficit in opinion polls, many oppose benefit cuts, particularly with the economy on an uneven footing. A Wall Street Journal/NBC News poll conducted late last month found 61% of voters were “enthusiastic” or “comfortable” with congressional candidates who support cutting federal spending in general. But 56% expressed the same enthusiasm for candidates who voted to extend unemployment benefits.”

When nearly half of Americans are receiving benefits and the other 11% are flaming idiots it is no WONDER!

Bottom line, we can’t keep this up.

[Beowulf9]

The Wall Street Journal is schizo........

What the Republicans should point out is that because of the Boomers....Social Security and Medicare spending will skyrocket in the next 15 years......which is PLENTY of “stimulus spending”, if only politicians kept promises to seniors....

Now the Democrats claim that SS and Medicare have “trust funds” with lots of money in them that Republicans want to gamble away in the stock market..........ie the “trust funds” are SOLVENT until into the 2030s.....

So why did Obama freeze Social Security checks between 2009 and 2010-—if SS has a solvent trust fund to draw from-—and is considering cuts to SS and Medicare to get the deficit under control.?

Lots of seniors are angry that Obama froze their SS check from last year, even though gas rose a dollar a gallon and he’s spending so much on everything else....

[BenLurkin]

"Nearly half of all Americans live in a household in which someone receives government benefits"

[Gordon Pym]

"Nearly half of all Americans live in a household in which someone receives government benefits"

This is the trap we have fallen into. With that many people taking from the public treasuries we have a numerical majority with a vested interest in voting for people that will give them even more. Essentially we have half the country who will vote themselves a pay increase before they will vote for an increase in freedom. It is electoral serfdom

[Mariner]

The real answer here is to completely revamp the Progressive Tax structure.

EVERYONE with some "income" should have to pay some tax...and tax reductions/increases should apply across-the-board IN ALL CASES.

Flat tax? VAT?

[Pining_4_TX]

“People who want unlimited health care had better save for it and/or buy Medicare supplements.’

Well, that’s great, but the government is going to make health care so expensive, that older people will not be able to afford. What insurance company is going to sell a policy to old, sick people?

And this is if the government doesn’t ban private insurance for people on Medicare completely. You see, the easiest solution for those who want universal, government health care is to kill off the elderly and the infirm.

[ridesthemiles]

How about the ads running here in N Nevada:

ACTIVSTYLE:

IF you are on Medicaid, & you have a problem with incontinence, we will ship you your supplies direct to your door.
“No more embarrassing moments in the store in front of your friends & neighbors.”

Call this 800 number & our live,caring staff will help you to get fitted with the brand (6)& size that suits you most.

“We will take care of all of the paperwork, & you will not have to worry about running out of supplies”.

Since when does this kind of problem become a Medicaid/Taxpayer problem?

How easy is it to defraud Medicaid with this kind of deal? Sign up just ONCE & ‘WE will take care of all the billing & send you your needed product”. Who is auditing to see how many pairs of piddle pants each patient is using versus what is being billed?

I see more & more ads every day about diabetes supplies- one-use catheters- all kinds of stuff.

How low are the standards as to what constitutes a ‘medical’ issue that piddle pants are now the cost of the taxpayers—not the patient?

I am over 70 & I am grateful that I don’t have this problem—yet.

I would be far more embarassed to ask for Medicaid to pay for my Depends than I would be to purchase them myself at Wal-Mart.

How deep has the Nanny state of mind got a grasp on the populace?

[ridesthemiles]

So why did Obama freeze Social Security checks between 2009 and 2010-—if SS has a solvent trust fund to draw from-—and is considering cuts to SS and Medicare to get the deficit under control.?”

To clarify:

NObama froze our social security at Jan 2009 rates for all of 2009-2010-2011.

[HangnJudge]

When, not If, this Breaks
The degree of Suffering will be Egregious
10’s of millions of People will Die
due to the collapse of the dependencies

There will be rioting in the streets,
and a general breakdown of society

Nothing short of a Catastrophe can stop it now...

[cvq3842]

Even the term “entitlement” is an insult. FDR himself talked about the “narcotic effect” of government payments.

And if the government’s Social Security “trust fund” is legal, then why on Earth is Bernie “Ponzi” Madoff in jail?

[therightliveswithus]

And the congress....

[Myrddin]

Social Security and Medicare are wealth redistribution that takes money from pay checks earned and sends it directly to mailboxes of waiting recipients. If the productive, employed folks took an unpaid 2 weeks off (earning no taxable income), the system would collapse. There is no reserve. It is skimmed as generated and any balance spent by the politicians...except we are at the point where incoming revenues are insufficient to cover outgoing "obligations". The only solution is to pay out less because you can't create money out of thin air.

[Little Ray]

FAIR TAX!

[Non-Sequitur]

Obstacle to Deficit Cutting: A Nation on Entitlements

Plus virtually all politicians from both parties lack spines.

[RicocheT]

It’s about time Americans learned to not order lobster and steak while carrying over the limit credit cards. The spending party is over and the cut back to basics reality is here and now.

Sure, those riding free say don’t stop and kick them off the party boat, but the S.S. America is taking on water and we all will drown if we don’t stop the entitlement leaks.

What ever we do to get our public budgets in shape, don’t just raise taxes. Taxes feed the beast, starve the beast by cutting spending first and tax only to fund bare necessity public services. The public welfare clause in the Constitution never meant put everyone on welfare, it meant a duty to protect one’s ability to work and live for one’s self and family, not expect others to bleed for you.

[Alberta's Child]

The real answer here is to eliminate taxes on income entirely and replace them with revenue sources that have some bearing on the impact a person or business has on government services.

A national sales tax would be one possibility, along with tons of fees and surcharges for various things (like how about parents paying for public schools based on how many kids they have in the school system).

[nascarnation]

It will be interesting to see where this goes.

One thing we know for sure, the multi trillion dollar unfunded balances for Social Security and Medicare are a monster problem.

Even putting Bernie Madoff in charge of them wouldn’t solve it, LOL.

My only hope is that Democrats get the “credit” for their great work the last 50 yrs.

[HangnJudge]

It will be interesting to see where this goes.

IMHO
The best we can do to avoid societal ruin would be to
Give back to the people the money
confiscated for these programs
minus money already dispersed

Permit a return to
Individuals caring for Individuals
Neighbors caring for Neighbors
Communities caring for Communities

Permit the Recovery of
Gratitude and Humility

[nascarnation]

Give back to the people the money confiscated for these programs minus money already dispersed

There are no balances.

SS and Medicare are: taxes in ---->>> payments out

SS has a fictional "trust fund" that only AARP actually believes exists.