Deficits Are Scary, But Spending Cuts Are Even Scarier

And here’s another: the federal government is essentially selling you [and your children, and theirs, etc] into slavery — after all, the debt is secured against your future tax payments which are non-voluntary on your part.

So there will be no chance of giving our kids the same opportunities that we have had. They will be repaying our debt for their lives, their children's lives.

OTOH...quit paying into a socialist government. Income taxes can be somewhat voluntary if you are willing - we are done paying $30K+ a year in taxes (fed, state, SS - doesn't even count all the other taxes and fees). Next year, we are retiring early and moving to a secluded farm. It's the lifestyle I want anyway and then we'll be prepared when it all comes crashing about our ears. And good luck, Big Government, getting blood from this turnip.

Arguably the most egregious cuts are taking place in programs for children. Two recent reports from the Urban Institute and America's Promise both show declines in spending on children in recent years. The First Focus report, for example, finds that federal spending on children declined from $310 billion to $290 billion or by around 14 percent between 2010 and 2014.

I have no problem with spending cuts - on children or not. Parents should be supporting their own children. The tax writeoff they get by having kids should be all the spending that is done.

But I don't believe this, what with the rise in food stamps - most of that is for families with kids I'd bet. Medicaid is expanded - most of those will also have kids. Schools - we spend a fortune on free and reduced lunches and that amount has increased. All for kids.

Nice charts, thank you.

But the big bucks are being spent on the entitlement programs, which is mainly on the elderly and adults.

Keep in mind that this influx over the border will be getting food stamps, free lodging, phones, medical treatment, schooling,.....

Yeah, that'll help the budget (sarcasm)

20/310 is only a percent of decrease of 6.45%

So true. The ones that are already here are costing literally billions every year. All this talk about what they add to the economy is just BS. They are a constant drag or our infrastructure. Letting another 20 million or so come will sink the ship.

“But the big bucks are being spent on the entitlement programs, which is mainly on the elderly and adults.”

True, because the seniors were forced to pay into the socialized retirement and medical program.

But I have to say, your interpretation that the children are going without because the money is instead being funneled to the elderly is quite a stretch.

Problem is these programs are unsustainable, given that there is no nest egg of all the money paid in. With a poor economy and more retiring folks on the horizon, there’s no way they can continue to get paid at the rate promised. It all has to collapse.

Which I suppose is your point..

Do you see a solution?

True, because the seniors were forced to pay into the socialized retirement and medical program.

The seniors get far more out of the programs than they contributed. The average Medicare recipient receives three times what he put into the system.

This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.

If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.

But I have to say, your interpretation that the children are going without because the money is instead being funneled to the elderly is quite a stretch.

The entitlement programs represent an unfunded liability of over $100 trillion. We have a $17.5 trillion national debt that continues to increase. Who is going to pick up the tab for all of this? The entitlement programs are pay as you go, i.e., today's workers pay for today's retirees. In 1950 there were 16 workers for every retiree; today, there are 3; and by 2030 there will be two. Our children, grandchildren, and great grandchildren will be saddled with unimaginable debt that will lower their standard of living. This is the legacy of our generation and some of the ones before it.

Do you see a solution?

We must reform the entitlement programs for starters. It may mean mean testing and privatization. Unfortunately, we just passed what may be the biggest entitlement program of all--Obamacare. Or we may need a financial collapse to reverse direction.

Oh hey kabar.

You might be one of the few to get this. Most people don’t seem to understand when I try to explain our Social Security dilemma. Some I think intentionally don’t want to know, others just don’t get it, or maybe I’m not explaining it well like back when I tried to explain what other women that I was working with how all of their income was taxed in the rate that their husband’s highest income was taxed at. If not higher. Most of them just didn’t seem to get it. I think because they really didn’t want to know. I actually got asked why I was taxed that much, as if it didn’t apply to them. Fairly simple math, even simpler than the Social Security math.

Anyway, hubby was looking into retiring early. But wanted to see how much he would lose if he quit paying into Social Security. So I ran the calculations in an Excel spreadsheet, and the calculations are readily available on the Social Security website. Just to put it in round numbers, if he continues to work in until he’s sixty-seven, another seventeen years, if he keeps paying minute the max rate he will pay in $175,000. (This is just for the next seventeen years, doesn’t count but he has already paid in. And is only his portion, not his employers.)

If he lives until 83, his average lifespan, he will only get back $50,000. That is taking Social Security at sixty-seven. Actually, taking Social Security at seventy doesn’t really change the numbers much unless he looked past 92.

Anyway, my point was that he should go ahead and retire!

Actually, my point to you is that the system is so socialized that it is ugly. Of course, when they need to make cuts they’re going to cut those making the most. And those people are already not going to get back what they put into it. Those at the lower level it back every penny they paid in, plus quite a bit more.

They knew it was socialism when they implemented it.

I appreciate your graphs.

Sadly, with Medicare just like Social Security, those that pay in the most don’t get back what they paid in. Those that benefit are the slugs and the lazy people.

I see your point that we have unfunded liabilities. And that they are huge and not sustaining. But at this point I’m just so mad at the total socialization of our country that I don’t even care. I only see that the top people are being screwed over. And these are the ones that have made our country work, taken risks, supplied jobs.

And those will be the ones that they expect to pay even more taxes, and will reduce their benefits. Just like when you talk about means testing. I think that would be a despicable thing to do because you are punishing success and rewarding stupidity and sloth. And of course, what we reward we get more of.

Unfortunately, with the dumbing down of our public education system people can’t even tell when they are being screwed over. So maybe some will just let it keep happening.

Yes, of course I see that the debt is going to be on the shoulders of the next generations. But the way I took your post was that at this current moment they are defunding children’s programs and putting the money into senior’s programs. That is not the correct picture, of course.

I vote for the financial collapse you mentioned. Only because any other solution involves more socializing. Just as the means testing you talked about. We are already too deep into socialism. And that just destroys an economy. Destroys the system we had that encouraged innovation and growth to the point where our progress benefited the entire world. I don’t think we can ever get back to what we had with a Band-Aid fix.

I am pinging OneWingedShark because he has a great ping list on CWII spark potentials. And although this was already one of his threads, what we’re talking about he might be interested in. And you might be interested in joining his list, kabar. You certainly have all the information we need at your fingertips. And graphs ;)

Sorry for the weird words. Hope you can get my intent. I am using Dragon and it seems to be having issues today ;)

Our children, grandchildren, and great grandchildren will be saddled with unimaginable debt that will lower their standard of living.

Sadly, that is the generation that seems to care the least. They've been in public school learning about condoms and bananas instead of studying REAL history and math.

Look at how those 18-25 voted. They voted for this. So you cannot blame just us older people.

Like you, I try to go around and tell people the truth. Most don't get it, and worse, don't really care. Sigh. Frustrating, isn't it?

How do people here respond to your posts? I hope at least here there is a consensus - and outrage - at what you so calmly and professionally display. Keep up the good work. And I don't mean to argue with you. I was at this point 2 decades ago and now I am beyond livid and beyond hope. So if I sound negative, I am not disagreeing with you but am looking for a way to start over, instead of fix something that they refuse to even try a tiny bit to fix. The debt has been increasing - and unfunded liabilities - for the entire time I've been watching - and few seem to care. So I don't mean to be grumpy with you, it's just the situation.

Anyway, hubby was looking into retiring early. But wanted to see how much he would lose if he quit paying into Social Security. So I ran the calculations in an Excel spreadsheet, and the calculations are readily available on the Social Security website. Just to put it in round numbers, if he continues to work in until he’s sixty-seven, another seventeen years, if he keeps paying minute the max rate he will pay in $175,000. (This is just for the next seventeen years, doesn’t count but he has already paid in. And is only his portion, not his employers.)

If he lives until 83, his average lifespan, he will only get back $50,000. That is taking Social Security at sixty-seven.

According to the SSA's quick calculator, he's looking at $2748/mo (today's dollars) if he retires at 67 or $3397 if he waits until he's 70. If he goes on at 67 and lives another 16 years, that's 16*12*2748 = $527,616, ignoring taxes, inflation, COLA, etc. If he goes on at 70 and lives another 13 years, it's 13*12*3397 = $570,696. Just for fun, let's be optimistic and assume he lives as long as ole Strom. Then it comes to 30*12*3397 = $1,222,920.

Yes, of course I see that the debt is going to be on the shoulders of the next generations. But the way I took your post was that at this current moment they are defunding children’s programs and putting the money into senior’s programs. That is not the correct picture, of course.

What we have witnessed over the last 50 years is the greatest transfer of wealth from the young to the old in history. The entitlement programs are wealth redistribution clear and simple.

I only see that the top people are being screwed over. And these are the ones that have made our country work, taken risks, supplied jobs.

My sympathy for those at the top is tempered with the knowledge that the corporate elite and the American Chamber of Commerce support amnesty and the importation of foreign labor to take American jobs and depress wages. They are destroying the middle class.

I vote for the financial collapse you mentioned. Only because any other solution involves more socializing

Financial collapse could lead to more socialism and less liberty. When the country descends into civil disorder and chaos, the people look to a man on horseback to restore civil order. It could lead to bigger and more repressive government.

Sadly, that is the generation that seems to care the least. They've been in public school learning about condoms and bananas instead of studying REAL history and math. Look at how those 18-25 voted. They voted for this. So you cannot blame just us older people.

So who runs these schools and devises the curriculum? The 18-25 year olds are products of our culture and political leadership. And we have a changing demography. By 2019 half of the children 18 and under will be minorities as defined by the USG. Huge numbers of children are being raised in poverty and single parent households. We are taking on the profile of a Third World country.

How do people here respond to your posts? I hope at least here there is a consensus - and outrage - at what you so calmly and professionally display. Keep up the good work. And I don't mean to argue with you. I was at this point 2 decades ago and now I am beyond livid and beyond hope. So if I sound negative, I am not disagreeing with you but am looking for a way to start over, instead of fix something that they refuse to even try a tiny bit to fix. The debt has been increasing - and unfunded liabilities - for the entire time I've been watching - and few seem to care. So I don't mean to be grumpy with you, it's just the situation.

The responses are getting better, especially on the immigration issue. It is discouraging to see how America is declining in so many ways. I am 71 so I do have some context for that observation. We are being dumbed down intentionally by the political class so we can be more easily manipulated. The Tea Party is a ray of hope, which is why both parties demonize it to one extent or another. They are not used to dealing with a real grassroots movement instead of the manufactured rent a mobs they summon on various issues. Eventually, the people will learn of their perfidy.

I don't find you grumpy. You want to deal with facts and not emotion. You also see clear-eyed what is happening. I share your grumpiness.

I wasn’t talking about the 1% but all those making $117000 or more. That’s the SS max this year. It doesn’t take being a billionaire to be screwed over, just someone with a work ethic.

A collapse could lead to faster socialism but we’re heading there anyway. If there are enough of us, it could go the other way for some parts of the country. We have nothing to lose. It’s the only chance for our grandchildren.

Those calculators don’t work if one quits paying in. They want to push everyone into paying in up until the day they retire. It wouldn’t be hard to add a stop date prior to age 67 but they don’t want people to get the idea.

It’s a bit skewed with the 62/67/70 calculations because they assume working up to that age.

“So who runs these schools and devises the curriculum? The 18-25 year olds are products of our culture and political leadership”

You can give them a free pass if you like. I won’t.

Those calculators don’t work if one quits paying in. They want to push everyone into paying in up until the day they retire. It wouldn’t be hard to add a stop date prior to age 67 but they don’t want people to get the idea.

My understanding is that your benefit bracket is based on your 35 highest-paid years of work, subject to a maximum earnings cap each year (you don't pay SS taxes for the rest of a given year, once you reach the cap). For 2014, the cap is $117,000. So, if you make $300k in 2014, it only contributes as much to your benefit as if you made $117k. If you make $300k, your take-home jumps starting in about week 21, since the payroll system stops withholding the social security tax.

In other words, once you have 35 maxed years in, continuing to work doesn't increase your benefit. However, if you had some earlier years that were not maxed, and you are now making the max, then it does. The earlier, lower-paid years will be dropped from the calculation, resulting in a higher benefit.

Once your benefit bracket is established, your actual payout increases 8% a year depending on how long you wait to start collecting, to a max of age 70. You can start collecting as early as 62, if you want, but your benefit will be reduced if you have other income. Once you reach 67 (for your husband), you can collect without having your benefits reduced as a result of other income (but benefits are still subject to income tax). Once you hit 70, your benefit stops increasing.