Economics, Entitlements, Pethokoukis

10 charts showing America’s stunning entitlements explosion

Image Credit: Robert Neff (Flickr) (CC BY 2.0)

Image Credit: Robert Neff (Flickr) (CC BY 2.0)

AEI scholar Nick Eberstadt’s latest book, A Nation of Takers, provides a sobering analysis of the entitlements explosion and its effect on the American economy and culture.

It’s a reminder that without significant, Reagan-style growth and/or massive spending cuts, our entitlement system threatens to sink the American economy.

1. Although Social Security already existed, the Great Society launched the ever-expanding modern American welfare state:

Note: Derived from data on official transfers and changes in consumer price index. Source: US Bureau of Economic Analysis

2. The rate of entitlement growth per capita has been nearly twice as fast as per capita income growth for the last fifty years

Note: Derived by author on the basis of data on official transfers, price changes, and population change. Sources: US Bureau of Economic Analysis, US Dept. of Labor, US Census International Data Base

3. In the 1960s, the federal government spent $2 on governing for each $1 it spent on entitlement transfers. Today that ratio has completely flipped:

4. It took only two generations for transfers to displace everything else the federal government does.

5. Here’s where the money goes:

6. In 1969, government benefits accounted for 7.8% of Americans’ personal income.

7. In 2009, government benefits accounted for nearly 18% of Americans’ income. And the regions which relied most on benefits in 1969 have become even more dependent.

8. Nearly 50% of the U.S. population lives in a household that receives some government benefits.

Source: Sara Murray. “Nearly Half of U.S. Lives in Household Receiving Government Benefit,” Wall Street Journal

9. 31% of US households are receiving means-tested public benefits.

Source: Unpublished U.S. Census Bureau data run commissioned by the Wall Street Journal, provided to the author by Sara Murray, January 16, 2012

11. As the Welfare State has expanded, Americans are working less.

For more detail–and plenty more charts!–on America’s entitlement crisis, read Nick Eberstadt’s A Nation of Takers: America’s Entitlement Epidemic.

252 thoughts on “10 charts showing America’s stunning entitlements explosion

  1. nice charts but more propaganda.

    social security and Medicare Part A are PREPAID entitlements – individual mandates.

    It’s money people set aside – their money – coming back to them.

    entitlements HAVE grown but the truth about non-FICA entitlements is obscured – and instead of informing people as to specifics – promotes misunderstanding and inaccuracies.

    the same thing happens when we talk about the US budget.

    Most folks think we take in about 2.5 trillion because FICA is included in that amount.

    the truth is we take in about 1.5 trillion.

    then we DO spend about 2.5 trillion – on entitlements, National Security and Govt.

    cutting SS will do nothing to fix the spending problem.

    We do need to charge more for Medicare – a lot more to bring that cost down but remember… money seniors spend on Medicare Premiums is money not spent on other things. there is no free lunch.

    MedicAid is tougher… as is SSI and food stamps and related.

    but remember also when we talk about entitlements, we are also talking about entitlements for the military – and they are a substantial cost component of military spending as military retirees outnumber active duty by about 2-1.

    In general, I agree that entitlements have gotten out of control but the solution to them is to require people to pay more of the cost – not deny coverage.

    • Larry, the charts are not propaganda, they are visual representations of statistical facts. Given the extreme progressiveness of our tax structure, it is disingenuous to continue to refer to any of these dramatically overspent programs as prepaid entitlements.
      Regardless of what someone chooses to label these things, they are vibrant, screaming indicators of the reasons why our nation is bankrupt and debt-monetizing its currency to destruction. The debt this has created, along with the federal regulatory burden and hostile business conditions in our country have brought GDP growth to a crawl. Introducing the tax increases you propose would promptly cause a recession, which, at this time and in these conditions, would likely trigger a host of very nasty economic and fiscal consequences.
      As a people, we used to understand that the government was the service provider of absolute last resort – inefficient and costly, and therefore private solutions should be sought wherever possible. Losing track of that essential truth will cost us far more than the benefit we think we are getting for it now.

      By the way, defense spending in the 70′s used to account for more than 40% of the federal budget. In 2011, it accounted for less than 20%, so while it might have been the target once, it is not the real issue any longer. The federal budget over this time frame has grown about four times faster than inflation, and much faster than the economy. Federal spending alone is around 25% of GDP now, in spite of the fact that federal revenues have hovered around 18% for the last forty years, in spite of a wide variety of marginal tax rates used during the period. This growth rate is unsustainable, regardless of what it gets spent on, or where the money comes from. Change is coming – either as a consequence of difficult choices we make, or as a consequence of a failure to do so.

      • My primary objection is they include pre-paid entitlements and should not because they purport to show govt subsidies to the “needy” and SS/FICA are individual mandates that people pay for themselves.

        take out the FICA and look at the charts again.

        If you want to make the argument about entitlements – then make it on that basis.

        If you want to argue against the concept of individual mandates and FICA -then make it on that basis.

        but don’t conflate them to show something entirely different than the truth.

        • “Pre-paid entitlements”???

          “Their money coming back to them”???

          Didn’t think anyone actually believed this stuff, but apparently folks, we have a live one here.

          LarryG, what planet have you been on? Social Security was folded into the overall budget decades ago. It’s long gone.

          • Actually, if you read ssa.gov you will find that SS itself is a separate fund. Factually, people have paid into those entitlement programs and deserve to see what they paid in come back to them. When these programs first started it was because people actually cared about their fellow citizens. Further, these graphs aren’t complete. For example, it leaves out the clandestine budget, the Corporate Welfare budgets, etc.

          • Dr. Paul, in theory SS is a separate fund. In actuality, SS, already woefully underfunded when you look at outlays, is required to purchase low-yielding government bonds instead of being freed to invest in higher-yielding investments. This means first that SS does not make the money it needs to make in order to pay out benefits, and second that Congress can use SS money as they wish, replacing it with IOUs. On paper, the money is there. In reality, if there is ever a government default, money will have to come from other programs to pay SS guarantees OR Congress will have to default on SS itself. Any good investor will tell you that if this were a private company, the folks running the retirement funds would go to jail. It’s that bad an idea.

          • the thing you need to keep in mind about SS is that whatever is true about SS is also true for more than 100 other trust funds including Military retirements and health care.

            For better or worse, right or wrong, congress decided that investing the funds in the stock market – not just SS fund but all 100+ trust funds – was too risky.

            When you make your argument against SS, keep in mind that you are also talking about the Military entitlements. they work the same way.

          • Social Security is more of an entitlement than you think and in fact highly preogressive scheme – Medicar even more so. The reason? Benefits paid are not in relation to investments made. Poorer people get greater precentage returns (I think amongst poor whites the return between the individual and employer contribution levels they are actually a positive return of some small number) otherwise you pay in much more than you get back. In Medicare it is almost all in reverse – the wealthy pay in much more than do the poor and neither pays for what it actually costs.

            So pre-paid? Nah. Neither program is financially solvent based upon the contributions it receives presuming the govt actually kept them separately from the general budget. These are full blown welfare plans now.

          • SS is regressive on the front-end and regressive on the back-end.

            Remember.. SS is an Insurance Annuity not a fund.

            Again… you need to distinguish between SS and Medicare in terms of how they are funded.

            Part A is pre-funded from FICA – pay-as-you-go like other health insurance is….

            Parts B,C, D are heavily subsidized and – this is important – totally VOLUNTARY and REQUIRE Premiums.

            What you are “entitled” to with B,C,D is the un-restricted ability to buy them regardless of your health and you pay what everyone else pays in your income class.

            SS is basically self-funded from FICA as is Part A.

            Parts B,C,D are 75% funded from General Revenues and 25% funded from premiums.

            It’s important to understand these distinctions if you are going to talk about reforms.

            don’t buy the propaganda. find out for yourself.

            It’s one thing to be ignorant. It’s another to be willfully so.

          • Larry G
            SS entitlements are not the same as military benefits. You don’t have to work for SS but you do work and sacrifice for military benefits.

          • re: you do not have to work for SS?

            really? Yes you do or else you will not get it and on top on that – what you do get is based on how many years you paid into it.

            Do you know how many CIVILIANs there are working for DOD that do get pensions and health care that is paid for 100% by taxpayers INCLUDING their FICA contributions into Social Security?

            Do you know how many military get pensions that have NEVER served in a war or combat zone? The vast majority of them work 20 years and then are eligible for pensions and govt/taxpayer -subsidized TRICARE?

      • QUOTE: “Given the extreme progressiveness of our tax structure,”

        Whoa, whoa! Back the truck up here! Before President Lyndon Johnson and Congress lowered the tax rates in 1963, the upper tax bracket was 91%–and YET!, the rich still got richer and we had our jobs.

      • It’s the “nation of moochers” crowd, when will you quit? Your globalist candidate who made hundreds of millions exporting US jobs and factories, lost on that platform. And people like him are still the problem. The system was set up to favor the rich and no real alternative has been invented to replace their corrosive philosophy or its effects. The jobs are gone to communist Red China who use slave labor. In 2008, the Federal Reserve issued $15 Trillion in credit to EU banks, trading medium-term notes, earning 1.5% – 2% per night, compounding. At that rate the national debt could be repaid in months, but WILL THEY? Curs at the trough, private interests competing for public funds, is all this entitlement arguement is about. Americans have no jobs, without jobs, or entitlements, people starve, and die from exposure. Yes Americans are entitled to at least as much as the criminal banksters, who assert we deserve NOTHING! How many of you Constitutionalists have retirement plans doing well? Please. Don’t everyone raise their hand at once.

    • Larry, its tempting to call SS “your money” that was paid into some mythical fund meant only for you, but ask yourself two things:

      Is it possible to receive more than you paid in plus market growth, and, if you die, does your balance (and only your balance) go to your estate?

        • Um, Todd, insurance is a risk pool of prepaid premium against an unforeseen future event.

          Socialist Insecurity is half-paid “premium” pool against a guaranteed future event, certain to demographically fail, a.k.a. Ponzi scheme.

          • Umm, Mesa…. SS pays death benefits, which is why they call is the Old Age and Survivors Insurance Trust Fund.

            But I will agree that it is a Ponzi scheme run on today’s young workers — and very likely on recipients like me as well. Study columns a and b in this chart: http://www.ssa.gov/oact/STATS/table4a1.html The difference is money I paid in payroll taxes, surplus to benefit payments, that trust fund turned over to treasury in exchange for paper. The last column is what the govt owes me in interest, which of course is also book entry. There was talk at the end of Clinton’s second term of putting this money in a “lockbox” but reform then got subsumed by Monica Lewinsky. Then Bush cut income taxes instead, and, yes, SS was demonstrably a Ponzi scheme on young workers in 2001 and 2003. History will judge the Bush tax cuts as a huge transfer of wealth from the middle class to the rich, and an assault on young workers.

    • Sorry, LarryG, but the charts aren’t “more propaganda.” You’re wrong that people “set aside” money for Social Security and Medicare. If you want to set aside money for your retirement, see your financial adviser.

      Social Security and Medicare are largely pay-as-you-go.

      • apparently the less enlightened sound-bite knuckleheads here don’t know the difference between an earmarked entitlement and an appropriated entitlement nor the difference between a “fund” and an inflation-indexed insurance annuity.

        FICA is NOT “folded” into the budget. It is REPORTED as part of the budget but too many think that because it is reported as part of the budget (and it should be) that it FUNCTIONS as part of the budget – it does not.

        In fact there is a totally separate accounting for SS – an annual trustees report is provided each year to show where the money came from and what it was spent on.

        This ignorance is combination part of the legacy of AEI and other “think” tanks and general laziness of some who can’t be bothered with actual facts.

        for instance: “is it possible to receive more?”

        yes it is – BECAUSE it IS INSURANCE – this is WHY it is formally CALLED: Old-Age & Survivors Insurance

        do you know what “insurance” means? How about “survivor”? How about annuity?

        this is WHY – just like with auto insurance with an annuity there is no “fund” to “pass on”. Many people receive other non SS security retirement as an ANNUITY that pays you benefits until you die and then stops unless you have a survivor option when then pays monthly benefits to the survivor but when they die – there is not residual “fund” BECAUSE it is an Insurance Annuity.

        No one calls auto insurance or private insurance annuities “ponzi schemes”. Instead they use the correct term “pay-as-you-go programs.

        re: setting aside money. You CAN – separate and independent from FICA – and you can set it aside tax-free but how many do that ?

        and that’s the basic problem. The people that would not set aside money would have to be taken care of in their old age – been there – done that – much better to have an individual mandate to pre-pay for your future needs rather than have others pay.

        Every single OCED country in the world does this and even other developing countries have similar programs.

        Singapore… has a whopping 30% payroll tax to require people to set aside, pre-pay for their future needs.

        but the most germane point is that it is inaccurate and misleading to mix earmarked entitlements with appropriated entitlements in a chart showing govt subsidized aid to individuals as earmarked entitlements are not that.

        further – by doing this – people are misinformed as to what the facts are and are then led to wrong conclusions about what the problems are and what the solutions should be.

        they get priorities screwed up failing to recognize what are immediate threats and what are longer term threats and what simply are not threats.

        An earmarked entitlement usually is designed to not spend more than it takes in – in dedicated funding. Social Security is that way. By law, it cannot pay out more in benefits than what FICA generates in tax revenue – unless Congress chooses to remove that requirement but right now that requirement is law.

        this is not the case with appropriated entitlements which which the govt to come up with the funding for those programs based on how many will receive programmed benefits so those programs can and do grow and there is no “brake” on them like there is with FICA/SS.

        Medicare and MedicAid are appropriated entitlements and Congress by law has to fund them no matter how much they increase in benefits – UNLIKE Social Security.

        What needs to be Fixed NOW is our burgeoning deficit and debt that are driven in part by appropriated entitlements and discretionary spending.

        You can find this out and more if you take the time to read for yourself and make a note that folks like AEI have an agenda that colors their presentation of info and actually deceives people as to the actual facts.

        there is no free lunch. You must want to actually know the facts yourself and not rely on propaganda mills.

        • Larry,

          There is nothing “Pre-Paid” about social security. The money coming in right now from payroll taxes pays current social security recipients.

          There is no account in Washington with your name on it that says “Larry’s Accumulated Social Security Funds, Hands off”. Social Security funds were moved over into the general fund (some called it raided, not a completely outlandish way to look at it) under the Johnson administration if I’m not mistaken.

          I don’t disagree with you that other countries do similar things. I just don’t think that its right.

          Here’s a thought experiment for you: What would happen if government didn’t guarantee retirement for people and allowed them to keep that extra 7.5% of their paycheck every two weeks? Maybe people would be incentivized to save more and would have the money to do so.

          It all comes back to this: What role (how big) should government play in the in the lives of its citizenry? Liberals tend to want a larger role for government, conservatives tend to want less. Greater spending on entitlments is a guaranteed method to ensure that government plays as large a role as possible in the lives of its citizens.

          • social security is “pre-paid” in the sense that people pre-pay for their benefits.

            the fact that the program is pay-as-you-go in neither here nor there.

            you “pre-pay” for your auto insurance but auto insurance is pay-as-you-go also and that does not change the fact that you pre-pay for your benefits.

          • re: “thought experiment, what if”

            you have that option right now and we had that option before SS was created and the result was that a good number of people did not set aside money for their future needs and everyone had to pick up the costs of providing for them later.

            SS/FICA is an individual mandate – to protect other taxpayers from those who won’t save and then expect to be taken care of later.

            SS “fixes” this problem UNLIKE our health care system where you and I pay to give health care to those who do not save for their care. We pay through EMTALA cost-shifting and MedicAid… to the tune of $6000 per MedicAid recipient.

            that’s what happens when you don’t have an individual mandate to save for your needs.

            every single OCED country on the planet works this way -and for very good reason.

            the only country’s that don’t work this way are predominately 3rd world.

          • Josh, its a known fact that Republicans grow the government more than Liberals do. For a great example of this, look at the Department of Lameland Insecurity (DHS). It made all Firefighters, Police Officers, and other first responders part of that organization on the Federal level, making it one of the most expansive overreaching government programs ever. So your meme that Liberals want bigger government than conservatives is blatantly false on that fact alone.

            Further, I am a Liberal. I believe in smaller government. I would love to get rid of several agencies within the government that are redundant or just useless. Take the DEA for example, the FBI has just as much authority as the DEA, and often do the same exact jobs. Or take the ATF, same thing. NSA could be part of the CIA and cut the deficit. These are real things that Liberals would get rid of so that the deficit could be cut. However, because, like with the DEA, they are Republican dreams, these aren’t discussed.

            So again, why the hate about real problems and solutions? Oh yeah, its because people listen to the conservative think tanks and aren’t serious about debt reduction.

        • You are wrong … It failed Constitutional muster until it was named a tax …. With individuals having no right of ownership.

          • Taxes and Social Security have both been determined to be “Constitutional” by the people empowered to make that determination.

            It never fails to amaze me that people cherry-pick the parts of the Constitution they want but disavow the parts they don’t want.

            The Constitution created 3 branches of govt to make and administer laws and a SCOTUS to ascertain Constitutional muster.

            they have done that job and yet we have people who disavow their Constitutional-specified role…

          • This is hilarious….’The Constitution created 3 branches of govt to make and administer laws and a SCOTUS to ascertain Constitutional muster’

            The original SCOTUS was nothing more than an appellate court and had original jurisdiction over things like traffic crimes and misdemeanors in the District of Columbia

            They couldn’t have ‘passed muster’ on anything Congress or the White House did in 1794 if both of those branches paid them.

            It wasn’t until John Marshall came up with his concept of ‘judicial review’ (not found in the Constitution either) in Marbury v Madison almost 14 years after the Founding that the Supreme Court even had a real reason to exist.

            American history…can’t learn it from coloring book correspondence courses

          • “The original SCOTUS was nothing more than an appellate court and had original jurisdiction over things like traffic crimes and misdemeanors in the District of Columbia”

            “They couldn’t have ‘passed muster’ on anything Congress or the White House did in 1794 if both of those branches paid them.”

            “It wasn’t until John Marshall came up with his concept of ‘judicial review’ (not found in the Constitution either) in Marbury v Madison almost 14 years after the Founding that the Supreme Court even had a real reason to exist.”

            “American history…can’t learn it from coloring book correspondence courses”

            so your position is that judicial review is not Constitutional because it was not specifically enumerated as a Judicial power in the Constitution and further more than anything not specifically enumerated in the Constitution if not Constitutional.

            or if I got it wrong, you tell me.

          • My position is that anyone who thinks ‘judicial review’ was specifically written in the US Constitution as a forethought with great deliberation by Madison et. al. either doesn’t know much about American history or just doesn’t care to know the truth.

            ‘Judicial Review’ was totally and completely the concoction made up in the brain of the brilliant John Marshall long about 1802 or so when he really wanted to stick it to Tom Jefferson, one of the people he loathe the most back than and a distant cousin as well.

            ‘Judicial Review’ of anything Congress or the POTUS did or does was as foreign to the Founders as the concept of reincarnation is to most Protestant Americans.

            it just wasn’t so.

          • ” ‘Judicial Review’ of anything Congress or the POTUS did or does was as foreign to the Founders as the concept of reincarnation is to most Protestant Americans”

            not really

            ” The Federalist Papers, which were published in 1787–1788 to promote ratification of the Constitution, made several references to the power of judicial review. The most extensive discussion of judicial review was in Federalist No. 78, written by Alexander Hamilton, which clearly explained that the federal courts would have the power of judicial review. Hamilton stated that under the Constitution, the federal judiciary would have the power to declare laws unconstitutional. Hamilton asserted that this was appropriate because it would protect the people against abuse of power by Congress:”

            http://en.wikipedia.org/wiki/Judicial_review_in_the_United_States

            you’ve got your view here but you are ignoring clear facts available…

            why?

            and who would decide Constitutionality if not SCOTUS?

            would it just be interpreted by the POTUS and Congress

            finally, how do you reconcile your view with the current realities?

            you can continue to shout “unconstitutional” but to what effect if no one is listening to you or supporting your position in Congress or POTUS?

            You’ve got your view but there is a clear history that at least some (not all) of the forefathers supported the concept of Judicial review – AND there is a clear REALITY of how we currently operate that will not be changed to suit folks with your views.

            The concept of Judicial review is accepted by all 3 branches of govt and every POTUS administration in more than 100 years.

            SS would be the least of the things you’d consider Constitutional given your view.

            How about a short list of the other things you consider unconstitutional?

            CIA, FBI, Coast Guard, Public Schools, FDIC, FEMA, etc, etc,

            you’re not only not in the mainstream – you way out on the fringes.

          • SS would be the least of the things you’d consider Constitutional given your view.

            How about a short list of the other things you consider unconstitutional?

            CIA, FBI, Coast Guard, Public Schools, FDIC, FEMA, etc, etc,

            you’re not only not in the mainstream – you way out on the fringes“…

            Yeah larry g, parasitic libtards would always consider constitutiuonalists fringe and beyond because of the potential threat to kick constitutionally questionable crapola of the the taxpayers’ back…

            Speaking of entitlements, consider the entitlements for the moonbats involved in the renewable energy scams…

            Millions of Extorted Tax Dollars Wasted on Renewable Energy Scams and the Overpaid Leeches That Run the Programs

          • I don’t believe I have ‘shouted’ that anything is ‘unconstitutional’. Just pointing out the facts as espoused by Stewart Harris, a constitutional historian and lawyer from the Madison Center on the Constitution at Montpelier.

            His point is that unless the government has the power to enforce any SCOTUS decision, as in the civil rights movement when the national guard was brought in to enforce desegregation in the South, any decision by the Supreme Court is just a decision by 50%+1 of the Justices on the Court at the time. Sometimes it has been 7, sometimes 9, FDR wanted 13.

            Wikipedia is hardly the final say on, well, most anything. Although they got this right: ‘The Constitution does not expressly provide that the federal judiciary has the power of judicial review.’

            Madison thought of using the Supreme Court as some sort of advisor branch to the President but that was scotched in the deliberations in Philadelphia in 1787.

            Without the machinations of John Marshall in 1803, the Supreme Court would still be trying to find a way and a purpose to exist. They would not be the all-powerful, all-knowing Wizards of Oz that the general public makes them out to be nowadays.

          • ” Wikipedia is hardly the final say on, well, most anything. Although they got this right: ‘The Constitution does not expressly provide that the federal judiciary has the power of judicial review.’ ”

            Wikipedia is not the source. Wiki is a compendium of sources.. I could go back and get the sources they have footnoted if you wish and then use that info to find more non-Wiki sources. Wiki is just a quick and dirty shorthand that usually is on target for most things.

            “Madison thought of using the Supreme Court as some sort of advisor branch to the President but that was scotched in the deliberations in Philadelphia in 1787.

            Without the machinations of John Marshall in 1803, the Supreme Court would still be trying to find a way and a purpose to exist. They would not be the all-powerful, all-knowing Wizards of Oz that the general public makes them out to be nowadays.”

            I do not think you can attribute what happened to one man. It was a variety of people over a long period of time that eventually did agree that the Constitution not only established SCOTUS but inferred it’s role..

            and without the SCOTUS role – we’d be more like a 3rd world Banana Republic where whoever owns the military rules.

            this is why most folks support the Judicial Review role.

            but I also object to the idea that out of all the things you could/would cite as “unconstitutional”, you restrict your focus to this.

            For more accurate context – you should disclose what other major things you also believe are unconstitutional.

            are you mainstream with some specific principled objections or are you on the fringe with many general objections?

          • I have never said taxes were unconstitutional….bad idea made constitutional by a bad amendment….but what they spend tax dollars on could be unconstitutional.

            Nothing infallible about judges….they have made bad decisions…quite often.

            You should research the history of the court case that everyone uses to say it is constitutional….the claims …. The lies …. The opinions …. The claims by the defense. Your comment leads me to believe you aren’t up on it.

          • re: ” but what they spend tax dollars on could be unconstitutional.”

            even if the Constitutional way of deciding is decided by the group established by the Constitution to do so – the SCOTUS.

            If you do not accept the ruling of the SCOTUS – what does that mean?

            that you and anyone else who disagrees gets to decide?

            what are you advocating? something other than what the Constitution set up to decide constitutionality?

            you guys kill me… you decide what is Constitutional because you don’t like the SCOTUS decisions?

            geeze… why don’t we just get rid of SCOTUS and take votes?

          • If you do not accept the ruling of the SCOTUS – what does that mean?“…

            That she can actualy think for herself unlike you…

          • “thinking”? how about accepting reality and be honest enough to say that you believe in the WHOLE / ENTIRE Constitution or not?

          • “thinking”? how about accepting reality and be honest enough to say that you believe in the WHOLE / ENTIRE Constitution or not?“…

            Still haven’t read the Constitution yet have you larry g?

          • re: “reading the Constitution”

            no JuanDOze – it’s agreeing with it or not.

            do you agree with the Constitution and the establishment of the 3 branches including SCOTUS to decide the Constitutionality of laws?

            I suspect you do not my man and you spend all of your time evading the question.

          • no JuanDOze – it’s agreeing with it or not“…

            larry g is that your public school education coming out?

          • my insistence that you be more honest“…

            LMAO!

            larry g its great you have no sense of shame…

          • shame? do you know that word boy?

            I don’t think you know it any better than “wise”.

            unless wise-ass is what you have in mind.

          • I don’t think you know it any better than “wise”“…

            Still making like a parrot, larry g?

          • The Constitution is quite clear on the powers of the House in the Appropriations process. It also is clear on where legislation originates. The Constitution protects us, if followed, from an oppressive federal government….and the judicial branch is part of the federal government….and becoming g more of a tool to bypass the legislative process.

            Putting on a robe does not confer any additional wisdom so the the courts can and do mess up. If they couldn’t, why would we have the appellate process? The courts make bad rulings just as the legislatures make bad laws.

            Again, you do not address the pressure and lies the FDR administration used to get the outcome in court that it wanted on Social Security.

            If I acquired considerable equity in my house then decided I wanted to buy many neat things so I took out a second mortgage and replaced it with an IOU promising to pay off the second mortgage, what do I have to live off of in my 70s and 80s if I never replaced the money I borrowed? You see, bad ideas flow when we escape the confines of the Constitution.

          • re: putting on robes

            that’s the Constitution process, right?

            are you disagreeing with the Constitution?

            I accept the Constitution and the process it establishes even if i disagree with some laws and SCOTUS rulings.

            Do you?

          • “do you agree with the Constitution and the establishment of the 3 branches including SCOTUS to decide the Constitutionality of laws?”

            I think you confuse Article 3, Section 2. With Marbury v Madison, the case where the Suprem Court justified its assumption of judicial review, which was not granted in the Constitution. If this were a clear-cut power, Marbury would not be a monumental case.

            “The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;–to all Cases affecting Ambassadors, other public Ministers and Consuls;–to all Cases of admiralty and maritime Jurisdiction;–to Controversies to which the United States shall be a Party;–to Controversies between two or more States;– between a State and Citizens of another State,–between Citizens of different States,–between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.”

          • What? The SCOTUS HAS the power to do judicial reviews.

            You guys are downright nutty with your word games that justify your rejection of the Constitution and Constitutionally empowered SCOTUS.

            this is nutty.

            who would you have make the determination if not SCOTUS?

            Can you cite credible Constitutional experts who say what you are saying or are you just picking and choosing what you wish to believe?

          • You should listen to those who study this. It is obvious you were knew to the Marbury v Madison debate…Frank Hill spelled it out beautifully. I love the Federalist Papers…also am quite aware of the many disagreements between Hamilton and the rest of the founders…not everything Hamilton wanted was agreed to and spelled out in the Constitution….but over time, he has gradually gotten his wishes. Perhaps you should read Article III.

            I also didn’t question the Constitution, but how some interpret it, or taxation, but how it is spent.

            Very little today resembles what the founders believed as far as what they created. What we have resembles what they feared and warned us of.

          • ” Very little today resembles what the founders believed as far as what they created. What we have resembles what they feared and warned us of.”

            perhaps.. but the “judicial review” thing is accepted by virtually everyone in the 3 branches as valid.

            you could sponsor an amendment to push it back but who would sponsor it and how many in Congress would vote to roll back judicial review?

            you seem to think that because some guys, not all of them, were opposed to judicial review – that that means from that time on – forever – that we reject judicial review.

            but the process does not work that way. your view is one view and if you are vastly outnumbered – then you lose.

            and you have lost for more than 200 years and minds have not been changed.

          • What happens if the Supreme Court makes a decision….and no one abides by it?

            Say they make a 5-4 decision banning the use of semi-automatic guns, shotguns or rifles and say that did not violate the Second Amendment because these people were not part of a ‘well-regulated militia’?

            What then? Will the Supreme Court be able to send US federal troops into every house on a search and seizure mission til they round up all 220 million guns now in US households?

            Judicial Review without the power to back those decisions up are sorta of useless, right?

            The main body of power has always resided in the US Congress with some specific powers allocated to the President. So may it ever be so. We don’t need or want king rule by 1 person in the White House or 9 oligarchs on the Supreme Court

          • ” What happens if the Supreme Court makes a decision….and no one abides by it?”

            what happens if they do enforce it and they do it with a wide variety of people over 200 years so that the Constitutional role is accepted and followed – 100%?

          • You said it is in the Constitution; I said it is not. I am right. I said the concept came from Marbury v Madison; I am right. The court was never set up to be the supreme branch. Do you really think the founders wanted a supreme branch of unelected officials? The opinions have been ignored in the past, with the famous “now let them enforce it,” and with Obama ignoring it re drill permits and DC ignoring it re gun ownership. Usually when disagreements occur, they are over statutes, not the Constitution, so Congress just changes the law to pass court muster.

          • “You said it is in the Constitution; I said it is not. I am right. I said the concept came from Marbury v Madison; I am right. The court was never set up to be the supreme branch. Do you really think the founders wanted a supreme branch of unelected officials? The opinions have been ignored in the past, with the famous “now let them enforce it,” and with Obama ignoring it re drill permits and DC ignoring it re gun ownership. Usually when disagreements occur, they are over statutes, not the Constitution, so Congress just changes the law to pass court muster.”

            Obama? WTF? there is 200+ years of dozens of POTUS and SCOTUS and thousands of Congressman who approved/accepted/validated the role of SCOTUS in determining Constitutionality.

            The fact that you skip all of this to cite Obama tells me what you are really about here.. it’s partisan… right?

            did you have such concerns with Reagan or Bush?

          • The first quote is about 100 years old….I forgot which president made it. I cited a specific example with Obama. You claim I am partisan for naming him and not others even as you claim all others have followed the rulings. Who would I name then? You did not disagree with the statement I made about Obama. The court has no law enforcement arm.

          • well for starters you’d name the first POTUS that went along with it – and then you’d say that all modern POTUS also go along with it rather than implicating a particular one who did nothing different than the others.

            Why name him specifically if this is a long standing practice that he did not begin?

            The law enforcement arm – Constitutionally is was established in the Executive branch – and has, as far as I know, been used to uphold all SCOTUS rulings – because both Congress and POTUS all these 200+ years supported the concept that SCOTUS have the authority and power to decided Constitutional questions.

            You have your view. It is not agreed to by all the POTUS and Congress since it was affirmed that SCOTUS had that power.

            It is not agreed to now by anyone elected to office that I know of. Perhaps there are some on the right that feel that way but even if they did – how would they change it back. No POTUS or Congressional candidate has run on that basis, right?

            Wouldn’t much of the govt today as we know it (way, way beyond SS) not exist if your view prevailed? How many support that view and would run for office promising to fight to return to that system?

            so basically, you’re way, way out on the fringes with your view as even some of the founding fathers, like Hamilton did not subscribe to it.

            so all of these threads really have little to do with Obama or SS – right?

          • Ok, if you insist. President Andrew Jackson, “John Marshall has made his decision; now let him enforce it.” Said after ruling on Worcester v Georgia, 1832.

            Obama ignored court ruling on drilling permits.

            So you think I am picking on Obama….what about DC government’s failure to honor The gun ownership ruling? (Heller)

            Again, the Supreme Court has no way to enforce decisions. The Executive Branch can refuse to enforce them, and don’t tell me that doesn’t happen. Obama is refusing to enforce immigration law, too. The Congress can override a decision by passing a new statute.

          • Ok, if you insist. President Andrew Jackson, “John Marshall has made his decision; now let him enforce it.” Said after ruling on Worcester v Georgia, 1832.

            but ultimately Jackson did not prevail in his view. Subsequent POTUS an Congress did accept that role.

            “Obama ignored court ruling on drilling permits.”

            is that a verifiable fact? please give cite. Or is it your view? DID GB tell SCOTUS they had no jurisdiction on Gitmo/torture/Habeas corpus?

            if Congress disagreed with ObamaCare then couldn’t they just simply not fund it and say they reject the SCOTUS ruling? Couldn’t any Congress or any POTUS ignore SCOTUS on that basis?

            So you think I am picking on Obama….what about DC government’s failure to honor The gun ownership ruling? (Heller)

            who would enforce the ruling ? If Congress controls the purse strings for DC, could they not force DC to follow the ruling by withholding funds?

            Again, the Supreme Court has no way to enforce decisions. The Executive Branch can refuse to enforce them, and don’t tell me that doesn’t happen. Obama is refusing to enforce immigration law, too. The Congress can override a decision by passing a new statute.

            Have they gone to SCOTUS to get a ruling that he is not following law?

            I do not discount the issues you are alluding to but I disagree that they a major force today and that over the last 200 years virtually all POTUS and Congress accept the POTUS judicial review role – and that is a reality.

            Virtually all of it’s decisions are accepted as “the law of the land”.

            but again – this thread started out as discussion on entitlements and what you are basing your objections on is far larger in scope than just entitlements.

            your scope would include much of govt that most people now days take for granted for more than just entitlements.

            correct?

          • None of that proves any ability of Supreme Court to enforce…and yes, there are stats and facts to prove the points on drilling and guns. Do your own research. I am too busy to correct another misguided soul.

    • Larry
      Calling Medicare pre paid is propaganda. The only way to govt breaks even on medicare is if you die before going on medicare or die soon after. I believe the average person pays in about $100,000 and gets about $300,000 in care.

        • Larry, the use of the phrase “Pre-paid” is misleading. Here’s a good discussion of the difference between Part A and Part B.

          http://www.pbs.org/newshour/health/medicare/financing.html

          If I “pre-pay” for legal services, I get them later when I use them. Of course the guarantee is only as good as the agent promising them.

          Part A is “prepaid” to the extent that the trust fund behind it ostensibly has a pool of money, but that money is going to dry up. Why? Because its projected future outlays/liabilities far exceeds the value of the (1) the current amounts in the fund and (2) the payroll deductions that will presumably replenish it.

          And if you project out the future liabilities and then discount them back to present value, the fund in the red about $40 TRILLION dollars. A private ongoing concern with that sort of unfunded liability would be declared insolvent, even if it had the piles and piles of cash in its coffers.

          Moreover, here is the kicker, from the linked discussion above:

          “Most of the money in the funds for Parts A and B of Medicare are credits from the government’s general coffer. In other words, despite the premiums and payroll taxes that flow into the funds from employers and employees, the vast majority of Medicare’s income comes from other parts of the government, known as intragovernmental transfers. For example, federal employees receive Medicare benefits, so the federal government pays taxes to Medicare just like a private employer would. Also, the SMI Fund is aided by spending from the general federal government budget. Both of these sources arrive in the trust funds via intragovernmental transfers.

          In fact, without the government’s promise to pay itself through these intragovermental transfers, Medicare is actually running a deficit in 2003.”

          Bottom line — we’re robbing Peter to pay Paul. This cannot go. And guess what? It won’t.

          • @KarlK

            thanks for the link and although it is not Propaganda it does get the Part A part wrong.

            here’s the facts:

            http://www.ssa.gov/oact/TRSUM/index.html

            look under sources of income and you’ll see clearly that HI (Part A) is funded from FICA taxes and SMI (Part B) is funded from general revenues.

            Part A is being addressed with an increase in payroll taxes as part of ObamaCare.

            Parts B, C and D DO have large unfunded liabilities and do need to be addressed and Part C has already seen cuts to the advantage program that will essentially re-introduce the original 20% co-pay so seniors have more skin in the game.

            but two more things.

            how many other programs have 75 year horizon lines for their costs?

            and when we compute these costs why do we not compute them also for Military entitlement programs because they too are funded from the general fund and have significant unfunded liabilities?

            I do not think we are informed enough to even know what ALL of the problems are much less choices.

      • Of course, Obama promised not to raise taxes on those making $250K or less. I guess FICA increases weren’t considered part of that. Oh well.

        You mail rail against what AEI is doing as “propaganda” but this fact is indisputable — Obama, and the current Democratic part may not be socialist, but they are certainly kith and kin with European social democrats — high taxers, with cradle-to-grave social programs, funded by fiscal irresponsibility. The end result? See Europe.

        So I applaud AEI for doing this. I encourage them to do so.

        Again, Part A is effectively insolvent. It will run out money. It’s outlays will outpass its inflows and assets in the pool. The Medicare actuaries — guys who know math — have said so.

        It’s really very simple.

        And this is true even if you OMIT discussion of other programs with huge unfunded liabilities — military benefits, or, the other huge elephant in the room, state and local pension obligations.

        • re:

          ” Of course, Obama promised not to raise taxes on those making $250K or less. I guess FICA increases weren’t considered part of that. Oh well.”

          not true. the payroll reductions were ALWAYS temporary. now you’re believing what you wish and not the facts.

          “You mail rail against what AEI is doing as “propaganda” but this fact is indisputable — Obama, and the current Democratic part may not be socialist, but they are certainly kith and kin with European social democrats — high taxers, with cradle-to-grave social programs, funded by fiscal irresponsibility. The end result? See Europe.”

          how about Singapore, Australia, Japan? You’re NOW spouting pure propaganda guy.

          So I applaud AEI for doing this. I encourage them to do so.

          “Again, Part A is effectively insolvent. It will run out money. It’s outlays will outpass its inflows and assets in the pool. The Medicare actuaries — guys who know math — have said so.”

          have you actually read the Trustee’s Report? What does it say? Do you not believe it?

          “It’s really very simple.”

          yes.. you choose to believe what you wish.

          “And this is true even if you OMIT discussion of other programs with huge unfunded liabilities — military benefits, or, the other huge elephant in the room, state and local pension obligations.”

          IF you ARE going to have a discussion of Unfunded Liabilities then:

          1. – it must be fact-based not propaganda
          2. – it must INCLUDE ALL funds not just the ones you
          do not like
          3. – you must acknowledge which ones are looking at
          75-year horizon lines and which ones are not

          4. – if you REALLY want to compare apples to apples
          then ALL of them should be looking at 75-year
          horizons.

          Hew to the facts, guy and drop the propaganda.

    • Larry, I think these charts represent changing demographics rather than any “propaganda”. The vast majority of growth in entitlements seems to stem from the FICA programs. As the population ages and birth rates remain low, the problem will only get worse.

      • re: growth of FICA entitlements.

        there is growth of SS recipients but unless FICA is changed, it will not “grow” unless the number of people paying into it “grows”.

        right?

        • Yes, but we’re talking about the percentage of people receiving benefits, of one form or another, not the percentage paying in. Correct? So, the former will grow no matter what happens to the latter. I think I’m helping your case, the growth in the former is due more to demographics than to a cultural shift. Although, personally I believe there is a cultural shift, and coupled with the demographic problem, the you know what will eventually hit the fan.

          • ” Yes, but we’re talking about the percentage of people receiving benefits, of one form or another, not the percentage paying in. Correct? So, the former will grow no matter what happens to the latter. I think I’m helping your case, the growth in the former is due more to demographics than to a cultural shift. Although, personally I believe there is a cultural shift, and coupled with the demographic problem, the you know what will eventually hit the fan.”

            But… FICA cannot increase without changes in the law AND the law ALREADY says that you cannot pay out more in benefits than FICA is generating.

            that’s the law – unless someone changes it.

            What it means in the current demographic trends is that if nothing is done – benefits will reduce to about 75% of current.

            in other words, automatic deductions in benefits.

            this is how SS and Medicare Part A work.

            Parts B,C and D do not work this way. The more people there are collecting benefits, the more Congress has to fund …..

            that’s where the big problem is – not in SS/PartA

            that’s why I say if you listen to the propaganda and do not find out for yourself, you will not really understand the truth and if you do not understand that – then how would you make an informed decision as to what to do?

            if you believe the propaganda folks – the only solution to SS is to kill it.

            and that’s simply not true. On a worst case basis – it will still be able to pay 75% benefits.

            by the time SS downsizes to 75%, on the other hand, Medicare B,C,D will DOUBLE the amount needed to fund it.

            THAT’s where the REAL problem is.

          • “But… FICA cannot increase without changes in the law AND the law ALREADY says that you cannot pay out more in benefits than FICA is generating.” Isn’t FICA currently paying out more than it is taking in? Oh, you must believe there is actually money in some sort of trust fund. But hasn’t that money already been spent by our government and replaced with IOU’s? Furthermore, since our federal government is currently in the red, there is nothing left to replace those IOU’s. Except more IOU’s. Correct? Now, if you or I attempted to do this would we not go to prison? Does the term “kiting” fit? Or should I ask, does that law only make sense if we deceive ourselves into believing there is a real trust fund, with real assets?

          • re: Trust Funds

            FICA generated surpluses over time and that money is accounted for in a Trust Fund.

            that trust fund works like 100+ other Trust Funds including the trust funds for military and DOD retirement and health care.

            All the trust funds including SS were designed to work the same way.

            the gasoline taxes you pay when you buy fuel go into a a couple of trust funds.

            the basic function of a trust fund in govt is not like a trust fund in the private sector.

            money collected from any sources goes to the U.S. Treasury to spend as cash and the govt issues special issue treasury notes to be redeemed when the cash is needed back.

            the only thing the trust funds do is delay the ultimate selling of treasury notes to the public to get cash for operation.

            If the SS trust fund was repealed overnight two things would happen:

            1. – people who bought US Treasury notes would panic and sell them

            2. – FICA would continue to fund SS at a 75% level.

            you may not agree with the way that all trust funds were set up and operate – but you’d be wrong for cherry-picking ONLY social security and ignoring the other hundred trust funds.

            so.. do you think the taxes you paid for gasoline is gone and is no longer available to be used to build roads?

            how about the retired military – do you think their pension and health care benefits are gone also?

            this is how silly this is.

            the more you folks talk like this the sillier it gets.

            know the facts – understand and accept the realities.

        • “FICA generated surpluses over time and that money is accounted for in a Trust Fund.”

          “accounted for” doesn’t equate to exists. The surplus has been spent.

          “that trust fund works like 100+ other Trust Funds including the trust funds for military and DOD retirement and health care.”

          Wrong. Military members never paid into their own retirement fund.

          “If the SS trust fund was repealed overnight two things would happen:

          1. – people who bought US Treasury notes would panic and sell them

          2. – FICA would continue to fund SS at a 75% level.”

          Wrong. The SS trust fund contains no marketable securities.

          “so.. do you think the taxes you paid for gasoline is gone and is no longer available to be used to build roads?”

          Of course that money is gone. Are you that daft not to realize that every cent coming in to the federal government is spent as soon as it gets there. The post accounting of that money is irrelevant.

          • “Wrong. Military members never paid into their own retirement fund.”

            sure they did and the taxpayers paid for it.

            and they also paid for their FICA payroll taxes

            re: ” Wrong. The SS trust fund contains no marketable securities.”

            they are special issue that are backed one for one by marketable securities. That’s how they get redeemed.

            ” Of course that money is gone. Are you that daft not to realize that every cent coming in to the federal government is spent as soon as it gets there. The post accounting of that money is irrelevan”

            do you think that also about money that pays for military entitlements, the VA and DOD civilians pensions and health care?

            what is your point?

            why do you select out ONLY Social Security in this issue when there are a hundred other funds that work the same way including the military entitlements?

            Why is it just about SS?

          • Everyone who ever testified before the House Budget Committee or Joint Economic Committee when we were up there said the same thing: The SS Trust Fund and the attendant so-called ‘surplus’ was just an accounting gimmick.

            There was no ‘surplus’ for example before the SS Act of 1983 between Tip O’Neill and Ronald Reagan. So how could there have possibly been any ‘bonds’ before then to redeem later?

            The ‘trust fund’ in SS is being depleted as we speak today and has been for the past 3 years. There has been no ‘panic’ in the markets due to a rush to redeem close to $1/2 trillion in these ‘bonds’, has there?

            Nope. The deficit in SS coverage has been paid for just like it will be done in the future: with current tax payments plus money borrowed from the Chinese.

            I went to the US Treasury one time to see where the so-called vaunted ‘trust fund bonds’ actually were. The official there pointed to his screen and pulled up a screen that had blinking numbers right and left.

            ‘See right there?’ he said. There’s the current SS Fund Balance right there on the screen. ‘Just electronic digits adding up and when we start spending more than we take in in payroll taxes, that ‘surplus balance’ will go down and eventually evaporate.’

            That is it, ladies and gentlemen. Nothing more and nothing less than a pure accounting entry.

          • It’s no more an ‘accounting gimmick” than the military pensions and health care trust funds.

            re: ” So how could there have possibly been any ‘bonds’ before then to redeem later?”

            do you seriously understand how FICA and the trust funds actually work?

            http://www.cbpp.org/cms/index.cfm?fa=view&id=3299

            more importantly , Why do you NOT, on your own, go out and find out the truth on this?

            FICA is what funds SS – the trust fund is a check book that receives FICA money and the treasury writes checks to the beneficiaries from the fund/check book.

            what is left in there after paying bills is the “surplus” just the same as in your own checking account.

            there is absolutely nothing untoward about it unless you think the other 100+ similar trust funds including the DOD civilian and military trust funds are also “gimmicks”.

            get wise.. get yourself educated.

          • all tax revenues that go into the US Treasury account are fungible. Meaning they are co-mingled, interchangeable, do not go into separate cubbyholes or safety deposit boxes in the bank vault under the US Treasury.

            Do you understand that or am I going too fast for you, LarryG?

            The ‘trust funds’ in any US federal budget account or line function are inherently ‘accounting-only’ in nature. NO cash is deposited in any account. NO gold is put in some box to hold and then sell later to convert into cash to pay obligations. Nothing of the sort

            Every ‘trust fund’ in the US federal budget account is set up that way. The politicians have just used the word ‘trust fund’ to dupe the gullible public, apparently even someone as wise and as omniscient as yourself.

            I know, I know…that is even hard for me to believe based on the erudite and insightful (sic) things you have written so far.

            So continue to be duped along with the rest of America in your hope and prayer that federal ‘trust funds’ are sacrosanct sanctuaries of specific contributions to them made by certain taxes paid.

            There are not. The SS Trust Fund is just the largest and most egregious example of the federal fiscal legerdemain that happens each and every single day with taxpayers dollars and what we can keep the Chinese and other national sovereigns to keep loaning us for some reason.

            Keep on believing your pipe-dreams, friend. That sort of thinking has only helped us accumulate $16 trillion of debt so far, of which only $11 trillion is ‘real debt’ anyway that has got to be repaid in cash money.

            And counting.

          • “all tax revenues that go into the US Treasury account are fungible. Meaning they are co-mingled, interchangeable, do not go into separate cubbyholes or safety deposit boxes in the bank vault under the US Treasury.”

            that’s NOT TRUE. do you read? do you know what “earmarked trust fund” means?


            Do you understand that or am I going too fast for you, LarryG?”

            you don’t read guy… here.. try again:
            http://www.gao.gov/assets/210/200562.pdf

            why do you folks run your mouth without getting the facts?

            “The ‘trust funds’ in any US federal budget account or line function are inherently ‘accounting-only’ in nature. NO cash is deposited in any account. NO gold is put in some box to hold and then sell later to convert into cash to pay obligations. Nothing of the sort”

            that’s TRUE. The money goes directly into the Treasury BUT the Treasury issues special issue Treasury Notes that ARE REDEEMED EVERY SINGLE DAY.

            “Every ‘trust fund’ in the US federal budget account is set up that way. The politicians have just used the word ‘trust fund’ to dupe the gullible public, apparently even someone as wise and as omniscient as yourself.”

            no they did not. they set up trust funds to work like earmarked checking accounts – on purpose because the govt receives money from any different sources besides taxes – like Medicare Premiums or gas tax receipts and each of those revenue streams is dedicated to be spent ONLY for what they were created for.

            “I know, I know…that is even hard for me to believe based on the erudite and insightful (sic) things you have written so far.”

            UNLIKE YOU – I HAVE PROVIDED more than 1/2 dozen separate references that clearly show what the truth is and you have just refused to read them.

            “So continue to be duped along with the rest of America in your hope and prayer that federal ‘trust funds’ are sacrosanct sanctuaries of specific contributions to them made by certain taxes paid.”

            Why would you “believe” AEI and other propaganda mills RATHER than read the links I’ve provided to you that clearly explain the truth?

            “There are not. The SS Trust Fund is just the largest and most egregious example of the federal fiscal legerdemain that happens each and every single day with taxpayers dollars and what we can keep the Chinese and other national sovereigns to keep loaning us for some reason.”

            If we have a one trillion dollar deficit – then tell me out of that trillion dollars how much is due to SS?

            why do you focus on SS when the Military and DOD pensions and health care trust funds works the same way?

            “Keep on believing your pipe-dreams, friend. That sort of thinking has only helped us accumulate $16 trillion of debt so far, of which only $11 trillion is ‘real debt’ anyway that has got to be repaid in cash money.

            And counting.”

            yes and tell me why you focus on SS which has virtually no impact at all on the current deficit?

            Do you think the DOD pensions and heath care contribute to the deficit and debt?

            do you know how much they contribute to the deficit and debt compared to social security?

            wise up guy. be honest enough to find out the truth and be less lazy about it by actually getting the truth rather than sucking up the propaganda.

          • “A1.1 Federal trust funds represent one accounting mechanism used to link earmarked receipts1 with the expenditures of those receipts.”

            Straight from Larry’s link. Larry do you remember Acc101? Does the term “balance sheet” ring a bell? All the trust funds do is tell us WHERE the revenue comes from, and HOW that money is spent. Nothing more, nothing less. They don’t invest funds (at least not in the way you and I invest money), they are purely and simply accounting mechanisms. Your own link clearly states that. BTW, do you believe the so-called SS trust fund should include accumulated interest? If so, could you please explain how that interest was earned?

          • re: ” All the trust funds do is tell us WHERE the revenue comes from, and HOW that money is spent. Nothing more, nothing less. They don’t invest funds (at least not in the way you and I invest money), they are purely and simply accounting mechanisms. Your own link clearly states that. BTW, do you believe the so-called SS trust fund should include accumulated interest? If so, could you please explain how that interest was earned?”

            the funds are invested in special issue notes that when redeemed are cashed with the same denomination treasury notes sold to the public.

            they earn interest because they are essentially loans to the govt the same way that publically sold T notes pay interest as in both cases they are loans being repaid with interest.

            Again – you may or may not agree or disagree with how they are set up but the primary point here is that there is nothing special about FICA Social Security in that regard. They work the same way as more than a hundred other trust funds – LIKE the military pension and health care trust funds or the Federal gas tax trust fund.

            don’t believe the propaganda being spouted.

            get the facts for yourself and at least realize that the trust funds and how they work are not unique to social security and FICA.

          • Larry, I got the facts for myself. I read your links! They clearly show the trust funds to be accounting mechanisms, not investment vehicles. Do you dispute this? Thus, your initial claim that the facts presented are propaganda, become totally bogus.

            “the funds are invested in special issue notes that when redeemed are cashed with the same denomination treasury notes sold to the public.”

            So you admit, they are paying an IOU with an IOU?

          • @MikeK

            yes.. ALL 100+ TRUST FUNDs are NOT what non-govt trust funds are. They are different and in the govt, trust funds are essentially checking accounts where money from a dedicated tax or fee, like a gas tax or a health insurance premium OR a FICA Tax, the cash goes into the U.S. Treasury which then issues notes that will be redeemed when the cash is needed to pay benefits, build a bridge, etc.

            They were designed that way on purpose by Congress – all 100+ of them.

            there is nothing untoward about them. If you did read the references, you would have also read that when the govt borrows money – it has two alternatives.

            it can borrow directly from the public by selling T notes or it can borrow from these other funds that are generating revenue – temporarily – until that money is need to pay for what the tax was collected for.

            so it’s a temporary loan from the govt to itself, yes and all that does is temporarily allow it not to sell more T notes to the public to finances it’s operations.

            I appreciate that you actually took the time to read the material.. if you missed the part that talks about what I just related to you above, I can find the passage and point it out to you by page number.

            but don’t you now agree that there is nothing really different about Social Security than these other trust funds?

            when you hear the propaganda, they make out like only social security is done this way and imply that there is something wrong and not legal going on but it’s all legal and it’s all done the same way for more than 100 other trust funds,

          • i.e. – Social Security is no more broke because there is no money in the trust fund than say ..the highway/gas tax trust fund is broke.

            As long as the gas tax is collected, there will be money to pay for roads – even if it is temporarily exchanged for special T notes because they get redeemed for cash when needed.

            The same thing happens with the military pension and health care trust funds where people pay premiums and the govt adds its’ contribution – and the money goes to the treasury which issues t-notes that are then exchanged for cash later on when the money is needed to pay benefits to military retirees.

            Social Security works just like the gas tax and military trust funds work.

            agree?

          • “when you hear the propaganda, they make out like only social security is done this way and imply that there is something wrong and not legal going on but it’s all legal and it’s all done the same way for more than 100 other trust funds,”

            Larry, I don’t pay a separate tax for the military retirement fund or the military health care fund. These funds are set up exclusively to show what the future obligations are to those recipients. Those funds come exclusively from general tax revenues. SS/Medicare are completely different in that they have dedicated revenues. There is also a perception among most Americans (rightly or wrongly) that these revenues are either being set aside for future use or at least guaranteeing some future benefit. You and I know there is no such guarantee, but it doesn’t change the facts. To say all federal government trust funds are the same is bizarre.

          • @Mike K

            Larry, I don’t pay a separate tax for the military retirement fund or the military health care fund. These funds are set up exclusively to show what the future obligations are to those recipients. Those funds come exclusively from general tax revenues.

            Do you have TriCare or a TSP account where you put money in and the govt puts money in?

            both the premiums and the general fund money go into a trust fund that works the same way as SS.

            So does Medicare where people pay premiums – and those premiums go into the trust fund along with the govt contribution and then claims are paid from the fund.

            “SS/Medicare are completely different in that they have dedicated revenues. There is also a perception among most Americans (rightly or wrongly) that these revenues are either being set aside for future use or at least guaranteeing some future benefit. You and I know there is no such guarantee, but it doesn’t change the facts. To say all federal government trust funds are the same is bizarre.”

            Medicare part A comes from FICA but medicare parts B,C,D come from premiums and general fund.

            the “perception” is fed by propaganda which seeks to deceive people as to what actually happens,

            once you read the links I provided to you – go back and read how AEI discusses these things and see how they choose to not explain it in the way the links did. This is where some of the misconceptions come from.

            insurance – is pay-as-you-go whether it is govt or private – it’s not a set aside ‘fund’ – it’s a flow-through fund.

            I did not say all trust funds are the same – I said they all function very much the same where the Trust Fund itself is not a “fund” in the sense it is in the private sector but more like a checking account.

            What goes into the fund can come from a dedicated tax, premiums AND government general revenues.

            that’s what is the same – the way they generally operate.

            Again – Social Security works that way … it has a dedicated tax that goes into a trust fund and then gets spent like the fund is a checking account.

            that’s not unique to Social Security and not a “ponzi scheme” nor does it have unfunded liabilities any more than say the Federal Gas Tax Highway Trust fund has ‘unfunded’ liabilities.

            the FICA tax is the source of the money for Social Security and by law they cannot spend more money on Social Security benefits than the FICA tax brings in – UNLESS Congress changes the law.

            that’s the truth. that’s the facts.

        • Maybe for social security. No way for Medicare. Do you think innovation in the medical sector will come to a halt? Do you think individuals will demand less health care when they age? I don’t believe so. While SS may be an actuarial problem, Medicare is a cultural problem. See the economics law of scarcity. Medicare/Medicaid will eventually bankrupt us just as universal health care has crippled the economies of other industrialized nations.

          • re: Medicare

            for parts B,C,D I agree.

            it’s a disaster and must be changed.

            but it also is a symptom of a much bigger problem – the cost of health care both public and private in the US.

            and you won’t fix that problem by just fixing Medicare.

            The way to fix Medicare (in my view) is to get rid of the govt-subsidized advantage programs and let all beneficiaries go back to a genuine 20% co-pay.

            Once seniors have to go back and have their own skin in the game – they will think twice about 15K knee replacements, etc.

            The sorry fact of the matter is that people can and do have significant assets – two houses, vacation homes, 3 cars, millions in assets – and they pay $100 a month for health care that costs taxpayers $400 a month.

            Un-recognized by most is what got cut when Obama cut 700+ billion from Medicare – it was the govt subsidy for the Part C advantage programs.

            That means seniors will have to pay more instead of getting super cheap gap insurance.

            also not recognized – the increase in the FICA payroll taxes for Medicare…. Part A.

            more changes are coming… and need to.

            MedicAid is a worse problem. The average MedicAid recipient receives 6K a year in benefits and if you allocate that out to people who do pay Federal income taxes, it comes to about 2K per taxpayer per year to fund MedicAid.

          • Unbelievable, really, really. The knotty-headedness of conservatives such as this one from the AEI. Japan has universal health care, the people pay for it out of their paychecks every month. Japan’s economy = not crippled; most everybody is doing fine. Thailand, for gawd’s sake, has unversal health care, as long as you can get yourself to a government hospital location.

            I don’t think these people should be called “conservative” when all they are, all they do, is the result of their lust for money. And unfortunately, they may never realize that about themselves. It is they who are somehow “insecure,” no matter how much they have.

            Of course they are not “Christians” either, otherwise they would “consider the birds of the air.” Right wingers, neither Christian nor conservative: discuss amongst yourselves.

          • Japan’s economy has been flat-lined for the past 17 years. Who wants that?

            Good to know there are religious Torquemadas on this comment chain as well….Mr. Oxbolossom says ‘conservatives can’t be Christians’.

            Where’s the politically-correct police to police such arrogance and insensitivity to religious freedom in America?

          • every single OCeD country – in the world – from Germany to Sweden to Singapore to Australia have payroll deductions and universal health care and pensions.

            that’s the facts.

    • “nice charts but more propaganda.”

      No, its something that will be new to you: Reality.

      You only think it’s propaganda because you live in the Leftist fantasy world.

    • Very wrong; They (SS Contributions) are a tax for the general welfare of the Gov’t. Not a managed savings program for the contributor (taxpayer.)

      The Roosevelt Admin. stated so in Court after Social Security was declared unconstitutional by the First Cicuit Court of Appeals in ’37. (Davs v Boston & Mane R.Co. (89 F.2d368) and Davis v Edison Electric Illuminate Co of Boston et al. (89 F.2d393), the Court ruled the Social Security Act unconstitutional. According to the court, the act, which contained numerous titles est. benefits for aged, unemployed & dep. childern, imposed two new taxes, an excise tax on employers and a special income tax on employees, was unconstitutional on a variety of grounds. One in particular was that the SSA violated the “general welfare” clause in that SS Taxes were paid by some for the benefit of others. Therefore not providing for the general welfare, but the specific welfare of some. To counter this claim, the government argued the tax and benefit provisions of the SSA were in no way related. The taxes were true taxes, paid unrestricted into the US Treasury for the Gen. support of the Gov’t. SS taxes were enacted for the sole purpose of raising revenue, and were not earmarked for any particular purpose.

    • The thought that everyone has ‘paid into’ SS and Medicare and therefore should be fully ‘entitled’ to a return of their money is a mirage, a chimera, an illusion…take your pick, they all fit.

      The taxes you pay in payroll taxes this week go right into the pockets of existing retired seniors to consume next week. Either in the form of the SS support checks or the roughly 85%!!!! federal subsidy we pay for their health care.

      There is no way that this can ever be considered as a truly fiduciary instrument where anyone can reasonably claim to be ‘entitled’ to the money you put into it later when you retire.

      Even the CBO says the ‘bonds’ in the so-called ‘trust funds’ have no ‘economic value’ since they can’t be traded on the open markets and don’t fluctuate in value.

      The only ‘trust’ fund in this whole Ponzi scheme is that we all ‘trust’ our children and grandchildren will be dumb enough to keep paying ever-increasing amounts of their hard-earned money into our pockets when we retire.

      • re:truly fiduciary

        really? how does your private health care or auto insurance “work”?

        re: trust funds

        get the facts nimrod:

        http://www.gao.gov/new.items/d01199sp.pdf

        after you’ve read that… get back and I have more for you.

        re: ponzi scheme

        yeah.. more propaganda blather …

        do you consider your auto or health care insurance a “ponzi” scheme also?

        wise up fella.. stop swallowing the propaganda..and get yourself smart(er).

        • I love it when people resort to calling other people childish names and trying to insult their intelligence by acting like they know what they are talking about when they clearly do not.

          Social Security is not a retirement plan although it is clearly marketed by the people who like more government as a ‘retirement plan’ which it most definitely is not and never can be in reality in its current form.

          Medicare is an ‘insurance’ plan only in the sense that people think it is an insurance plan where funds are paid and invested in assets that are then used down the road to provide funds for their needs in retirement.

          It is solely, coldly and clearly a transfer subsidy payment, a.k.a ‘welfare’ that is paid by working Americans to cover the high costs of seniors now eligible to get the 85+% subsidy from them. it is no different than the welfare mother receiving tax benefits from Food Stamps, students getting lower interest student loans from the government or homebuyers who get any sort of lower interest payments subsidized through the whatever new Fannie Mae or Freddie Mac subsidy-providing mechanism is.

          The CBO says so. OMB says so. The Green Book of the Joint Committee on Taxation says so….they even go so far as to show that everyone under the age of 55 today…will NEVER get out the full amount of the money they put into SS or in Medicare unless you happen to incur massive costs due to a catastrophic event.

          Seriously. Get the facts right before you cast aspersions on anyone who dares confront you with the facts.

          John Adams once said when he was defending some British troops in 1770: ‘Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.’

          Senator Daniel Patrick Moynihan said: ‘You are entitled to your own opinion. Not your own set of facts.’

          So, let’s have a discussion on the facts and not on how much smarter you must be than anyone else on this email chain

          • “Social Security is not a retirement plan although it is clearly marketed by the people who like more government as a ‘retirement plan’ which it most definitely is not and never can be in reality in its current form.”

            is that why they call it: ”
            old age retirement and survivors insurance” ?

            notice the noun.

            “Medicare is an ‘insurance’ plan only in the sense that people think it is an insurance plan where funds are paid and invested in assets that are then used down the road to provide funds for their needs in retirement.”

            no they don’t they think it works like any other health insurance – they pay a monthly premium and their bills are paid. that’s what MOST folks think. It’s just another kind of insurance. Only the zealots and partisans think of it as otherwise.

            “It is solely, coldly and clearly a transfer subsidy payment, a.k.a ‘welfare’ that is paid by working Americans to cover the high costs of seniors now eligible to get the 85+% subsidy from them. it is no different than the welfare mother receiving tax benefits from Food Stamps, students getting lower interest student loans from the government or homebuyers who get any sort of lower interest payments subsidized through the whatever new Fannie Mae or Freddie Mac subsidy-providing mechanism is.”

            Parts B,C and D are indeed but so are military and civilian DOD entitlements – except they are 100% taxpayer paid.
            And remember the military pays into social security and medicare also and expect their retirees to get social security and medicare when they retire instead of the military solely paying them ALL of their lifetime pensions and benefits.

            “The CBO says so. OMB says so. The Green Book of the Joint Committee on Taxation says so….they even go so far as to show that everyone under the age of 55 today…will NEVER get out the full amount of the money they put into SS or in Medicare unless you happen to incur massive costs due to a catastrophic event.”

            without changes, that’s what will happen, they’ll get about 75% of scheduled benefits but think about that – in terms of “insolvency” and unfunded liabilities. What does it mean if the law requires benefits be paid SOLELY from FICA and must be reduced if FICA falls short of full funding. Is that the same as what “unfunded liability” means – say with Medicare part B or Military pensions?

            “Seriously. Get the facts right before you cast aspersions on anyone who dares confront you with the facts.”

            we’ve got the facts.. I can and will provide references to any/all of these things – unlike vague references to CBO and the like.

            “John Adams once said when he was defending some British troops in 1770: ‘Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.’ ”

            yup.. I agree.. that’s why everything I’ve said here can be easily verified …. with actual credible references.

            “Senator Daniel Patrick Moynihan said: ‘You are entitled to your own opinion. Not your own set of facts.’ ”

            blah blah blah…

            “So, let’s have a discussion on the facts and not on how much smarter you must be than anyone else on this email chain”

            I do not claim to be ‘smart’. I claim only to search and find actual facts from credible sources and that’s what I provide here.

            just the facts. the propaganda, misinformation and downright disinformation that appears here is rampant.

            here’s a challenge for you.

            Name the SS and Medicare trust funds and how much money each one of them spends each year and the sources of that money.

            just pick a year.. 2011, 2012… etc.. and list out the data.

            it’s information you can find – but you will not find it on the propaganda sites because what they are doing is number sushi …

    • Social security and Medicare are not fully funded by those pre payments. Not even close. I honestly didn’t know anyone believed that.

      • “Social security and Medicare are not fully funded by those pre payments. Not even close. I honestly didn’t know anyone believed that.”

        but that’s the problem. People “believe” without looking up the facts.

        Both SS and Medicare (Part A only, not B,C,D) are fully funded for the next few years.

        but even after they are not – the law requires that (without changes), the benefits must be reduced to be no more than what FICA generates.

        Can you name one other Federal program that automatically reduces to not exceed available funding?

        but that’s the truth. Unless changes are made, benefits cannot exceed FICA funding.

        • but that’s the problem. People “believe” without looking up the facts“…

          ROFLMAO!

          Way to go spam boy, if you repeat that factless mantra often enough it will still never morph into a fact…

  2. The chart in Number 7 has me scratching my head. One of the counties highlighted in being the “high” end is the northernmost county in New Hampshire, Coos County. There is nothing up there, and I mean nothing. It’s called “The Great North Woods” for a reason.

    I am just wondering who (or what) in Coos is getting so much federal support.

    • Jon – now you see why I object to this kind of “journalism”.

      they throw stuff up on the wall.. but closer examination shows some problems.

      • Oh! Boo! Hoo!

        now you see why I object to this kind of “journalism”“…

        What you object to is reality…

        they throw stuff up on the wall“…

        That’s your style larry g and it fails miserably everytime you try it…

        If this journalism is even half as bad as you continually whine about then why do you keep coming back?

        You think YOU of all people are going to change hearts & minds?

        • re: changing hearts and minds

          nope.

          I don’t have to.

          you do.. and you’re failing…

          the GOP/AEI/Heritage/CATO have been lying their butts off about entitlements and the thing about the American people is that it does take them a long time to figure things out but once they do “cry wolf” will bite you in the butt every time.

          The “truth” about “parasites” and “entitlements” is not a simple as the hard right would have you believe.

          • Well, that wasn’t my point, actually.

            I am just wondering why there was a jump.

            Oh, shit, I know what it is: it’s the Federal Prison in Berlin! That would explain it. And the closing paper mills up there.

            I figured it out. Thanks guys.

          • larry g never at a loss for something idiotic to say: “the GOP/AEI/Heritage/CATO have been lying their butts off about entitlements“…

            You of course have something credible to back that up, right wiki boy?

            The “truth” about “parasites” and “entitlements” is not a simple as the hard right would have you believe“…

            Well considering where that line is coming from…

            You just don’t want to pay for the federal government goodies you think you’re entitled to larry g

          • By the way, I am going to throw my two cents in here:

            I do think there needs to be a serious discussion on entitlement spending, everything from Social Security to Medicare and everything in between. Even if you are in favor of the systems, then let’s at least talk about reform. The finances are getting so that it will soon be unsustainable. Let’s talk about changes: maybe changing how payouts are done, maybe changing how pay-ins are done, maybe cutting some people off *cough the rich cough*.

            I am a member of CATO. I don’t mind AEI (although Dr. Perry is the main reason I am here, no offense). I think the research here and at CATO is good, but it should also be met with skepticism, just as with any research. Personally, the only research I never doubt is my own :-P I wouldn’t go quite as far as calling it propaganda, but it also doesn’t answer all the questions.

          • John Murphy, if people were really serious and wanting an adult conversation about Medicare, Medicaid, Social Security, etc, then they would also be talking about eliminating useless and redundant agencies on the Federal Level, and further, they would be talking more forcefully about opening up the Marijuana Black Market to the open market, which is estimated at over 800 billion a year to the Federal Government in savings and additional revenue. However, they aren’t being serious.

    • Dude, the chart shows % of income, not an absolute dollar value. Apparently, in this area of NH, a small number of people are getting a large percentage of their incomes from the federal government.

        • Let me see if I have your reasoning correct. I paid the maximum SS for most of my working career, but now find myself numbered among the 47 percent. Since the Greenspan SS reform commission in 1984, I have paid far more in FICA taxes than SS paid out in benefits. Dubya bet that money on the come and lost. Now I am a cockroach and a drag on true Americans who create jobs . So it is only right that you take my money through means testing or some other sort of SS “fix.” Do I have it right? Wouldn’t want to blur the line between the makers and takers,

          • “Dubya bet that money on the come and lost.”

            How does that work? The economy collapsed because of the subprime meltdown, not the tax cuts. Take away Fannie, Freddie,Clinton Admin housing policy, Acorn and their parasite litigators like Obama,…. and 2008 collapse wouldn’t have happened.

          • Just saying that Dubya had a choice of tax initiatives: create individual accounts for the young’ sequester the trust fund’s surplus in a lockbox; or cut income taxes to spur growth. The first two had more or less certain outcomes: (i.e. taming entitlements however the economy went.) The third was a bet that failed, and it doesn’t really matter why it failed because the money is gone.
            So you’ll have to iexcuse me if I bristle at being called a taker by the folks who benefited most from Dubya’s mistake.

  3. To call the above article propaganda is willful ignorance, as one need only consider the numbers.

    The unfunded liabilities of Medicare and Social Security are around $60 trillion. The Urban Institue and AEI both estimate the average beneficiary gets far more out of Medicare than he ever paid into the system through pay-roll taxes (UI: $3 to 5 dollars more for every dollar paid; AEI about $110,00). To look at a special Medicare population, consider dialysis patients. Medicare pays for most patients with end-stage renal disease (ESRD) who undergo dialysis. The average hemodialysis patient costs ~80,000/year while the average peritoneal dialysis patient costs ~$60,000/year. While there are only approximately 500,000 ESRD patients, their costs consume about 6% of the total Medicare budget annually. The median lifespan of a dialysis patient is ~3 years. Between 1/1/2011 and 12/31/2029, 10,000 baby boomers will be retiring daily, and I expect the members of this generation will expect all the free goodies they’ve been promised. Finally, federal debt is going to be $22 trillion by 2022. Debt servicing alone, once the Chinese really decide not to fund our extravagent life-style, will crush the economy.

    http://www.ncpa.org/sub/dpd/index.php?Article_ID=22022

    http://www.aei-ideas.org/2009/08/have-seniors-really-paid-for-their-medicare-benefits/

    http://www.taxpolicycenter.org/UploadedPDF/310667_Straight36.pdf

    http://www.usrds.org/2011/pdf/v2_ch011_11.pdf

    http://pewresearch.org/pubs/1834/baby-boomers-old-age-downbeat-pessimism

    http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-31-2012_Outlook.pdf

    • re: unfunded liabilities of SS. There is no such thing and that’s what you get from believing AEI.

      unfunded liabilities means that you are on the hook to pay out benefits that you don’t have money for.

      In SS case, the law says the opposite. That you CANNOT pay out more in benefits than you have FICA taxes.

      so that’s an outright lie ..said over and over that people believe instead of finding out the facts for themselves.

      Medicare Part A is also funded by FICA and cannot pay out more than FICA generates and also has no unfunded liabilities.

      To be Fair and truthful, unlike AEI and brethren, Medicare Parts B,C, and D DO have unfunded liabilities but to show you just how selective and deceptive AEI is – so does the military retirement and health care systems have massive unfunded liabilities ALSO – so where is this disclosure from AEI about “entitlements”?

      military, homeland security folks get to retire after 20 years and the retired military outnumbers the active military 2-1.

      where are these unfunded entitlements in AEI’s “calculations”?

      And I said before – you HAVE TO WANT to find the truth and not be herded to it by AEI confirming your own biases.

      Let’s deal with facts, please.

      • Is the UI, not a bastion of conservative ideas, lying? Do dialysis patients, many of whom are from lower socioeconomic backgrounds, actually pay for their medical care? Once someone is listed as ESRD and disabled, most likely he will qualify for Social Security and Medicare benefits, and an ESRD patient is about the most expensive Medicare patient around. Finally, do sick, non-ESRD, elderly patients, who suffer prolonged hospitalizations, actually pay for the care they receive?Social Security and Medicare are albatrosses around America’s neck–the population is aging, and there are not enough people to pay into the entitlement state.

        Finally, here is a nice liberal link you can use, as you appear to have an aversion to anything AEI.

        http://www.pbs.org/newshour/health/medicare/financing.html

        • I’m interested in the FACTS first -BEFORE we draw conclusions or advocate changes.

          lumping any/all entitlements into one “thing” whether they be earmarked pre-paid or appropriated is sound-biting the issue.

          People who pay their whole life into SS and Med A are NOT utilizing an entitlement the same way as someone who has not.

          that distinction is important when labeling people and drawing erroneous conclusions.

          we have entitlements for the military also.. and huge unfunded liabilities for them also.

          If we are going to talk about entitlements and unfunded liabilities -we should talk about them ALL.

          • I’m interested in the FACTS first -BEFORE we draw conclusions or advocate changes“…

            In light of your previous clueless rants this is yet another stunningly idiotic comment by you larry g

            You’re no more interested in facts than Custer was interested in more indians at Little Bighorn…

            The fact is that YOU want more government dispensed goodies than YOU are willing to pay for…

          • Juandos… no “goodies”.. individual mandates… you work, you pay payroll taxes, you get benefits later.

            works that way in every single OCED country on the planet regardless of the Neanderthals who cry about it.

          • The ever dependable larry g will say something silly: “works that way in every single OCED country on the planet regardless of the Neanderthals who cry about it“…

            Yeah, I want to take all my cues from a Paris based Marxist think tank when it comes to capitalism and free markets…

            LMAO!

          • Singapore, Hong Kong, Australia, New Zealand, Germany?“…

            That’s right larry g, wake up and smell the marxist…

  4. I am REALLY tired of hearing Social Security and Medicare being referred to as “entitlements”–almost as if it were another four-letter word. They should be more correctly referred to as “earned benefits” paid for through payroll taxes and employer contributions.

  5. The bottom line here seems to be ‘I want my ice cream, I paid into the ice cream fund, I don’t care about the unsustainability of the finances for the fund, I WANT MY ICE CREAM!’

  6. Hey look everyone. Here is a another republican who can not tell the defference between an entitlement and a fund people have pre-paid into.

    And chart #7. There sure is a lot of red inthose red counties.

    • re: “pre-pay”

      it maybe has connotations that some don’t agree with but I do believe it is accurate because every paycheck – people have money deducted from their pay and it goes to Medicare (Part A only) where it is spent on beneficiary claims – as it IS a pay-as-you-go program (just like private insurance is).

      It automatically goes THROUGH a trust fund which is the govt’s version of a checking account where Part A administrators receive special issue treasury notes (just like you’d receive a deposit receipt when you put money in your checking account) and then you write a check and the person who cases it gets it from your bank.

      In the case of Trust Funds, the Treasury Dept is the “bank”.

      Despite the successful propaganda there is nothing “untoward” about this process.

      It works much like your private checking account and, in fact, the govt has set this system up for more than 100 other trust funds also.

      NONE of the monies that the govt collected is invested in market securities.

      they are all “invested” in notes that are essentially backed by treasury notes sold to the public.

      when Medicare redeems their special issue treasury notes to pay for someone’s hospital charges, the treasury writes the check …..

      and .. in the case that the govt is in deficit – they get that money by selling treasury notes to the public.

      This is not unique to SS or Part A. The govt does the same exact thing with Federal Gas tax money and they do the same exact thing with the Military pension and health care system.

      What the propaganda mills have found out is that people are ignorant about things like this – and they are lazy and gullible.

      And yes.. it even extends (sometimes) to journalists themselves who purport to “explain” something they themselves did not adequately research.

      but the propaganda mills have, in fact, figured out that people do not know and that they can be sold a bill of goods.

  7. Also, how much of those “entitlement” government benifits come in the form of veteran affairs to take care of all the soldiers that the republicans keep tell us we need to invade other countries… err… i mean for defense, right?

    Maybe if we had a smaller military, we would have fewer veterans mooching off the gov’t teet.

    How many are mothers who were forced to pay for their babies becuase some repulican didn’t want pay a few bucks for some contraception?

    Did you seriously post this page, and not expect to get called out for your propaganda BS?

    In the age of information… ignorance is a choice.

    • How many are mothers who were forced to pay for their babies becuase some repulican didn’t want pay a few bucks for some contraception?“…

      Seriously blastoh?

      Why should I being paying for someone else’s lifestyle choices?

      I guess the words,, “personal responsibility” have almost no meaning for you, right?

      In the age of information… ignorance is a choice“…

      Apparently you’re choosing ignorance…

  8. In regards to the first chart, it seems pretty obvious that the author has no idea what “exponential” means. Also, date ranges are different on each chart, leading me to wonder if they were cherry-picked.

  9. just to further show just how wacky the accounting is for Social Security and prove it is not a trust fund but rather just an accounting gimmick, read this from one of the SS/Medicare Board of Trustees, Chuck Blahous.

    if you want to listen to anyone who knows what he is talking about when it comes to SS/Medicare, it is Mr. Blahous, hands-down.

    http://www.washingtonpost.com/opinions/the-costs-of-social-security/2012/12/07/e8cbe928-3e3f-11e2-8a5c-473797be602c_story.html

    • yes.. and it included this:

      ” The sizes of these deficits are largely due to a temporary reduction in the Social Security payroll tax for 2011 and 2012. The legislation establishing the payroll tax reduction also provided for transfers of revenues from the General Fund of the Treasury to the trust funds to “replicate to the extent possible” revenues that would have occurred in the absence of the payroll tax reduction.”

      these are the facts guy.

      you have to want to know ALL of the fact not just the parts that confirm your biases.

      • you HAVE TO WANT TO KNOW THE TRUTH whether it satisfies your own beliefs or not….

        we cannot understand current policy much less have enough of an informed view to actually make reforms and changes if we only want to know the stuff that confirms our own biases.

        the propaganda mills have discovered that most of us (and I include myself in years prior) are lazy and find it difficult and tedious to actually get the full picture.

        I got tired of seeing conflicting info coming from both sides and decide to spend some time finding out the facts and it’s become clear to me what the propaganda mills are up to.

        It’s cynical but effective.

        the vast, vast majority of people do not understand simple things like how Federal Trust Funds actually work and that’s just one example.

        Military pensions and health care are paid from trust funds just like social security and medicare are but to listen to the zealots here.. it’s only SS and medicare that have problems and worse.. they are “socialism” like the VA and Tricare are not.

        Why doesn’t the military just pay their folks a salary and let them be responsible themselves to go find health care and fund their own pensions and not have the government responsible for that?

        isn’t that also “socialism” since the govt is funding these entitlements and they also have huge unfunded liabilities and would be “insolvent” if it were not for “transfer payments” direct from the general fund?

        • couldn’t agree more. Do these people think that maintaining a “standing army” is socialist?? Is it socialist to have a police force? The first Republican president said something about government . . . of, by, and for THE PEOPLE. I suggest the current R party change their name to something more descriptive of the facts on the ground.

          What would these people do without their bogeyman bogywords like “socialist?”

        • Because EVENTUALLY you’ll run out of other people’s money. That’s the Socialists’ way of “redistributing the wealth” en masse.

          Once rich people and richer companies run out of money, the middle class, with its modest to meager wealth levels, would be forced to fill in the big gap.

          Then all hell breaks loose. Like Greece and Spain in the recent times.

          Something HAS TO FILL IN to make up the larger differences. The USA has a declining workforce for the past 2 decades, due to latest technological innovations and improved efficiency in workplaces, though, such attempts to restore manufacturing bases in the USA would take several decades to close up the deficit and increase the surplus in SS, Medicare/Obamacare, and other entitlement programs. By 2020 and 2030, robotic and AI technologies make so much advancements, employers and companies would switch from human employment to full robotic deployment in some workplaces and manufacturing bases. Eventually, human workforce decline and no tax revenue from payroll earnings of human workers fill in. Therefore, no more money for entitlement programs, and it would mean more and more borrowing to make up the differences.

  10. I read many of the comments on many different websites and it’s a little disheartening. Although the devil is in the detail, we have become lost in the detail without any clear vision towards fixing our problems.

    Here are some facts that are indisputable:

    (1) Out debt continues to grow
    (2) Our annual deficits continue to grow
    (3) Economic growth is very low
    (4) Unemployment is still at 8%
    (5) The number of people on entitlements is growing
    (6) Small business and individuals are at a breaking point with the taxes they pay.

    There just simply isn’t enough money to fund our current federal government. If changes are made, our economy will collapse. That’s a fact.

    I know, very simplistic. But, that’s the truth.

    Yo!

    • all true – and all the more reason to understand the specifics.

      we have a trillion dollar deficit.

      social security contributes almost nothing to that deficit yet it sucks up about 80% of the entitlement concerns.

      why?

      we have a trillion dollar deficit.

      how much do we spend on entitlements from the general fund?

      about 300 billion for MedicAid
      about 300 billion for Medicare
      what else?
      unemployment -
      food stamps -
      SCHIPS (kids) -

      what percent of tax revenues should be spent on entitlements?

      what percent of tax revenues should be spent on National Defense?

      if we can agree on those percentages then we can apply them to the revenues we do take in – and allocate accordingly and both entitlements and national defense/dod will have to scale back their share towards balancing the budget.

      or we need to increase tax revenues AND cut back.

      we cannot get there by cutting entitlements only and not raising taxes…. everyone – entitlements, DOD and taxpayers are going to have to get haircuts.

  11. The national debt is out of control and it needs to be fixed. Many political organizations have taken up the fight to fix the issue of national debt as it would have an adverse impact on our economy in a long term. However, this fight is not always for patriotic reasons or concerned about the nation, but is more often motivated by special interest groups. Our current debt has roots in two unfunded wars which consumed 2 trillion dollars. The wars were funded by borrowed monies. The last financial melt down led to economic collapse resulting in decreased government revenue and increase debt. These are the same interest groups that never had problem with the increasing deficit and some in the political party supported by these special groups even said that deficit do not matter. These are the same interest groups who are against regulating financial industry that brought the financial melt down because of greed. No one got punished and they all are living happily ever after. If you exclude Social Security and Medicare from these entitlements that they are talking about, the amount to be saved by reforming rest of the entitlement would hardly put dent in our national debt. Are these people, who paid for Social Security and Medicare through out their life, free loaders? How much Social Security contributes to our debt currently? Additionally, the HealthCare has become unaffordable commodity in our country if you are covered by an employer. In short, these special interest groups who are concerned about the Tax Dollars spent on entitlement have to remember that if they are interested in truly solving the fiscal problem so that their donors can continue to flourish economically, they need to find a solution that will bolster the middle class as we are a consumer based economy. Our middle class has been eroding for the last 20 years. If these special groups continue to promote the policy that weakens our middle class, the consumer base will decline and our economy will decline. At the end, they will pay lower taxes, but their income will decline as their businesses will not have a robust and vibrant middle class. Oh, by the way before I hear about supply side economics, I am yet to see any convincing proof that the theory has worked and someone from right wing can provide me with proof

    In summary, these groups are misguided by their overwhelming zeal to serve their masters by fighting to lower the taxes and targets the benefits earned by people who have worked their whole life and paid into Social Security and Medicare. I do believe that we need to reform both the systems to make it viable for long term and any opposition to the attempts to reform these two benefits would not serve well to the durability of Medicare and Social Security.

    Finally, these are the same group they argue for the less government, less taxation and less regulations. These are only ideological arguments not practical. There is a country that exist in the world where very few people pay only small amount of taxes, there almost no government, forget about small government and almost no regulations and that is PAKISTAN. It is not a question of big or small, but it is about optimal government with optimal taxation and regulations.

    • Remove the caps on social security, pay into the system no matter how much you make. That’s only fair“…

      So nettie a person because of his/her wages or salary ends up paying more into SS should get a large SS check when collecting, right?

      Its only ‘fair‘, right?

    • Re: Removing SS caps (nettie)

      It’s “only fair” if you view SS as a wealth transfer to pay for welfare benefits, and then only arguably so. But you cannot have it both ways where SS is a pseudo-personal account that people have paid into (“their” money, iow) as well as a program that means-tests or has unlimited contribution caps, regardless of anticipated benefit.

      Re: Comparing Trust Funds (LarryG)

      I understand the temptation to view the Transportation trust funds as being similar to SS/Medicare, and it is correct that they operate in a similar “Pay as You Go” fashion. But there is an important distinction in how they receive funds:

      For Transportation, the more the roads are used, the more money is generated by fuel taxes. Not so with Pension-type benefits when the ratio of contributors to beneficiaries is getting more and more skewed. Also, there is no looming, completely predictable bolus of new highway needs coming down the road like there is with the retiring Baby Boomers and SS/MC.

      So I’ll concede they basically operate in similar fashion, but that doesn’t mean there’s not a huge, real-world problem with the funds.

      • re: Greece and “disaster”

        we may slide into what Greece did but it won’t be because of Social Security which is a fiscal gnat on a dogs butt in terms of it’s adverse impact on the budget and deficit.

        one has to wonder WHY social security gets the focus instead of the the things that really are pushing us towards disaster.

        re: trust funds and source of funds and spending of those funds.

        they all work similarly as “trust funds” are the govt equivalent of a checking account and it does matter where the funds are coming from (as opposed to thinking they magically appear inside a trust fund).

        Some trust fund monies come from general revenue subsidies.

        Medicare parts B,C and D do as does quite a bit of the DOD military and civilian pension and heath care (TRICARE).

        Social Security and Med part A don’t come from general funds. They come from the FICA Tax and the law prevents more benefits from being paid out than FICA generates.

        This is why you hear that at some point, unless reforms are made, that benefits will reduce to 75%.

        Think about all the other programs in the budget including military pensions and health care that DO NOT work that way and go up every year as more folks retire and more general fund money is needed.

        one of the primary points here is that we’re looking at a deficit of a trillion dollars and a debt of 16+ and we need to focus on the things that are causing the deficit.

        Social Security is NOT one of them despite what the propaganda folks would have one believe.

  12. I would like to point out that regardless of the rhetoric, so called entitlements have risen and wages have remained stagnant, in current terms, over past 30 years. There has been more money put in them because we simply have many more people than we did in 1940.
    The word entitlement is a misnomeer and should be retired so we can use a more appropriate one to reflect what is actually going on. Just because the government owes Social Security money doesn’t mean it has cost the government as the money has been spent on the promise it will be repiad-it is considered a part ‘of doing business’.

  13. Larry G,

    I actually tend to agree with that we need to focus on Medicare and Medicaid (along with other welfare programs), as the real focus of deficit and debt reduction. Of course, you and I disagree about solutions — I want more market-based solutions and it seems like you are happy with command and control government-based solutions.

    The other point I think no one has really pushed back against you strongly enough is the idea that Social Security shouldn’t be described as an entitlement or welfare program. As I’m sure you know, since you are so well read on these matters — most people wind up getting back in benefits much more than they paid into the Social Security system. This qualifies as welfare in my book.

    • @Fake Herzog

      re: command/control vs market-based

      I FAVOR market-based solutions over command & control but I do not favor destroying the program and I do think it can be moved to market-based without destroying it.

      Look at what Singapore did – as an example.

      Also – If you look at the affordable care act – ObamaCare, it is structured similar to the FEHB that serves Federal Employees where there are 10-15 different companies offering everything from catastrophic to full comprehensive coverage and FEHB provides good comparative tools for people to make more informed decisions.

      I still think Social Security is more of an individual mandate than welfare. It is regressive on the front end and progressive on the back end.

      It IS means-tested if the recipient is receiving other additional income to SS benefits.

      But I’m not convinced that people get more out of it than they pay into it. I’d have to see some evidence to that effect. It’s operated for some time and maintained balance between FICA revenues and benefits paid.

      It’s going to get out of balance because of boomer demographics but some simple reforms can put it back in balance.

      but Social Security is not a major impact on the budget deficit and debt yet it gets way more attention and proposals to gut it – for what reason?

      and the attempts to gut it are going on at the same time that other things that DO affect the budget deficit and debt are barely mentioned. The other 600-lb entitlement gorilla in the room that no one talks about is DOD military and civilian employee entitlements – some would call them employee benefits – but every penny comes from taxpayers.

      My overall view is to deal with the facts and to stamp out the propaganda.

      we can disagree in principle -on the facts – but disagreeing about propaganda vs facts goes no where.

  14. I admire all the staunch supporters of Social Security. I trust it is clear that the money that goes into Social Security is fungible. There is no lockbox or trust fund.

    What I don’t quite understand is why all the staunch defenders of Social Security don’t appear the least concerned with all the runaway government spending in other areas that in a very real sense reduces the probability that social security benefits will be paid out.

    To take one example, the stunning increases in SSDI benefits payed out simply mean that there is less money to pay retirees who have “paid their entire lives into Social Security”. Where is the outrage?

    • whether or not one is a “defender” of SS is separate from facts – the using of acts to dialogue about it verses non-facts, propaganda, etc.

      trust fund money is NOT fungible UNLESS the law is changed.

      the problem is, once again, getting confused about exactly what a trust fund is or is not when used in a govt connotation.

      A trust fund in the govt is a checking account – and the money coming into it and going out of it is determined by law as to whether it is an earmarked purpose or not and most of the trust funds are, by law, earmarked.

      For instance, a penny or two of the gas tax goes into a trust fund to re mediate abandoned gas station storage tanks.

      the money comes from the gas tax – and is dedicated toward that purpose.

      the same is true of – say the military pensions which are funded from the general fund but once the money is put into the trust fund – it can only be spent on military pensions – not other purposes.

      the problem that we have is that too many like to lump any/all entitlements into one category as if they all have the same issues and that simply is not the case even if those organizations and think tanks and politicians who have an ‘agenda’ would have you believe otherwise.

      When you hear a politician lump Social Security into the same category as Medicare Parts B,C,D AND at the same time conveniently ignore the very same funding/unfunded liability issues with the military and civilian DOD pensions issues then they are not dealing honestly nor comprehensively with the issue and instead are pursuing an ideological mission.

      All i say here – over and over – is – get the facts and don’t allow yourself to be misled by those who would mislead you. Take the initiative to find out the facts and make up your own mind about what needs to be done (or not).

      I LIKE individual mandates.. or let’s say I PREFER them to not having them and then later on, the rest of us have to pay taxes to care for people who would never have set aside money unless there was a mandate to do so.

      The other thing to keep in mind is that some people are working poor. They work hard their whole lives but they do not make enough money to save up enough for retirement.

      What would you do with these folks if it were not for Social Security?

      Finally, let me also point out that DOD civilians and military pay FICA taxes and that Social Security is one leg of their retirement stool.

      DOD military and civilian employees DO have a 401K type plan called TSP – thrift savings plan that allows them to set aside money in addition to SS for their retirement. The 3rd leg is the govt contribution.

      It’s not so sound-bite simple as the propaganda mills would have you think. It’s also not that complicated.. but it does take a little due diligence to not let yourself be gullible.

  15. With regards to the comments on social security I think there is an element of truth in both arguments, that it is prepaid account and that it is a transfer “welfare”. If all of the money each person put in was set aside in an account for them that they had access to in retirement then it would be purely a prepaid account, now if some didn’t go into the “retirement” account but instead was used to purchase insurance, no problem there either, you just have less in your retirement account but you have some insurance. The fact that you have nothing at death is simply the difference between purchasing an annuity and not (again an element of insurance) has nothing to do with pepraid vs. welfare.

    The welfare argument (ie not prepaid argument) is valid since on an acturial basis the entire program has always been bankrupt, under any reasonable set of assumptions around life expectancy, investment return and retirement payout assumptions it is hopelessly underfunded, always has been. Put another way if this was a pesnion plan of a private company it would be declared bankrupt. So to the extent that on average the prepayments come no where close to providing enough funding for the expected future benefit payments, it is a welfare program like much of the other government transfers. The actuarial short fall is large from what I have read elsewhere, so a significant portion of it is a welfare transfer not prepaid. This does vary based on the income of the person paying in, some people are earning a positive return on there money and some are earning a negative return on their money.

  16. People are arguing at cross purposes here, using the same terminology with different meanings.

    LarryG misunderstands several things:

    1) Private insurance uses your premiums to invest in real assets. Those trust funds have a real, positive, value. They are some of the largest investors in the US and bring a very stable return on investment.

    2) Yes it is true that current income often goes right out to pay current costs, but ONLY because that’s more efficient than investing the new income and selling assets to pay the costs. There are plenty of assets invested to cover all possible liabilities.

    3) The same is true for any viable retirement fund, whether “held in trust” (that’s where “trust” comes from) or not. There are sufficient assets invested from people’s deposits, so that (given reasonable expectation of survival rates and return on investment) the whole thing will grow and be ready to pay out appropriately when people retire or die.

    4) Thus, it is not necessary to have 100% of the money needed for payout later, because as investors and savers we can count on the “magic” of compound interest to grow our investment over time until it is time to pay out.

    NOW… WHAT THE US HAS DONE WRONG… and is shown in the above charts… is that

    a) There is nowhere near enough surplus held in trust. Current income doesn’t even pay current expenses, let alone future expenses.

    b) As others have noted, unlike a viable trust fund, the SS fund has a net present value of future obligations, of negative tens-of-trillions. If it were viable, the net present value would be at or above zero.

    c) NOBODY is properly addressing this.

    SO: Medicare B/C/D are even worse… but A is also in the hole. Right now.

    There’s NO WAY it is a “prepaid” insurance fund. Not any more.

    • 1) Private insurance uses your premiums to invest in real assets. Those trust funds have a real, positive, value. They are some of the largest investors in the US and bring a very stable return on investment.

      they invest it LIKE SS temporarily until claims have to be paid. virtually ALL insurance works this way. The premium you pay for your auto or health insurance mostly goes to pay benefits plus some admin fees and SOME of it invested longer term for contingencies.

      2) Yes it is true that current income often goes right out to pay current costs, but ONLY because that’s more efficient than investing the new income and selling assets to pay the costs. There are plenty of assets invested to cover all possible liabilities.

      MOST of it does. Remember there is COMPETITION to sell insurance premiums and the more of it you sock away the higher your premiums would have to be if you were competing against a pure pay-as-you-go company which most if not all are.

      3) The same is true for any viable retirement fund, whether “held in trust” (that’s where “trust” comes from) or not. There are sufficient assets invested from people’s deposits, so that (given reasonable expectation of survival rates and return on investment) the whole thing will grow and be ready to pay out appropriately when people retire or die.

      you do not understand the difference between the private definition of trust nor the govt definition which are different but tell me how many private insurance companies call their product a “trust”?

      4) Thus, it is not necessary to have 100% of the money needed for payout later, because as investors and savers we can count on the “magic” of compound interest to grow our investment over time until it is time to pay out.

      you have to have ENOUGH to pay claims and you have to be competitive in your premium rates. You cannot get around the fact that virtually all insurance is pay as you go. if claims go up – then your premiums go up.

      NOW… WHAT THE US HAS DONE WRONG… and is shown in the above charts… is that

      a) There is nowhere near enough surplus held in trust. Current income doesn’t even pay current expenses, let alone future expenses.

      because it’s NOT a TRUST fund in the sense you think it is. do some reading. start here: http://www.gao.gov/new.items/d01199sp.pdf

      b) As others have noted, unlike a viable trust fund, the SS fund has a net present value of future obligations, of negative tens-of-trillions. If it were viable, the net present value would be at or above zero.

      for 75 year payout horizon yes but tell me how many other govt programs like military pensions also evaluate that way?

      and remember, by law, SS cannot pay out more in benefits that FICA generates in revenues. So how do you get unfunded liabilities if the law says you cannot pay out more than the FICA tax generates? You’d have to reduce benefits if no changes are made. They say that clearly.

      c) NOBODY is properly addressing this.

      wrong again – there are reform efforts being considered now. I have a link if you need it.

      SO: Medicare B/C/D are even worse… but A is also in the hole. Right now.

      show me where A is in the hole. the DI is close to the edge but A is still managing. B,C,D and military pensions and govt pensions are all being paid for about 75% by taxpayers, yes.

      so WHY would you NOT focus on them right now and put all this time and effort into a program that can go another 20 years before reforms have to be made but even then the law will require benefits to automatically reduce not increase from tax subsidies.

      There’s NO WAY it is a “prepaid” insurance fund. Not any more.

      It was NEVER designed that way to start it. It was designed as a pay-as-you-go inflation-adjusted annuity with survivor and death/disability features.

      It’s INSURANCE – was always designed to be insurance, was NEVER designed to be an advance-funded pension system.

      don’t believe the propaganda. get the facts yourself. You could disagree on principles with how SS was originally designed but at least have your facts correct.

      the program is working exactly as designed and it does have some demographic issues – just as military pensions and govt pensions and state pensions and private pensions have these same “boomer” issues.

  17. I’ll summarize even more briefly:
    A viable trust fund has a positive net present value of future obligations. In other words, overall if you stopped paying in today, and added no obligations today, the expected future income from what is already in there would cover all expected future expenses that have been committed to.

    SS is not even close to that.

    By that totally normal definition, SS is not a “prepaid” entitlement, and never was.

  18. Wow. A friend came up with a link that describes the complete history of Social Security, on an official gov’t website. http://www.ssa.gov/policy/docs/ssb/v66n1/v66n1p1.html
    Plenty of documentation there, that much of what is said and believed today by the media, politicians (and LarryG) is simply false.

    * At first, SS was a viable plan, where contributions resulted in “earned” income later.
    * But in 1939 (only four years in!) they changed it. Benefits were increased for early contributors, without increasing pay-in. AND they decided NOT to build a trust fund big enough to cover later costs.
    * And then, they decided not to implement the pay-in increases necessary to cover even the known costs. No increases in pay-in were implemented until 1950, but pay-outs were increased and increased again.
    * And the whole thing has been trouble ever since.

    This problem has been predictable since 1939!

    We now have entire generations of Americans who believe their “pay in” has earned THEM the right to a “pay out.” … and it just is not true. Your pay-in pays for current retirees. You will only get a pay-out if your children and grandchildren continue to pay in.

    That’s not a retirement fund or a trust fund or even insurance. It is a Ponzi scheme.

  19. A great part of the entitlement establishment is geared toward purposefully imploding the USA from within — it’s called the Cloward-Piven strategy. The Bilderberg’s imposition of Obama as POTUS furthers that strategy and pushes the US that much closer to the only “cliff” we should be talking about: the demise of Western capitalism itself.

  20. Larry, Larry, Larry.

    You should know better than to introduce facts into an argument about “principles”. No matter how much reality you have on your side, the other side will never see it that way, not necessarily because they are dishonest, but more because their values are different from yours.

    You and I might see that programs like Social Security and Medicare (part A) are mostly working, and, further, that social programs are an economic positive, but the other side disagrees with that assessment, irrespective of whether or not they disagree with the actual facts.

    You might as well try convincing a young earth creationists that the earth is OLD, the universe is REALLY OLD, and evolution is one of the key mechanisms that led to the presence of mankind on this planet. Their interpretation of any facts you put before them is always going to be trumped by their beliefs.

  21. Larry G. is telling it like it is. Stop worrying about social security. It’s got $2.7 trillion in the bank. Medicare Part A can be adjusted by doubling its ridiculously low rate of 1.45% rate, and Medicare Part B has already become income related. You critics of social security would be better off worrying about your country’s $16 national debt before you give advice about social security or anything else.

    • there is NO bank for SS! How can the American public be duped so completely? Is this a communist plot or something?

      All the ‘trust fund’ implies is that ‘when the time comes to pay the benefits of the older Americans when they retire is taxes will have to be raised and/or their benefits will have to be cut’ to meet those demands.

      There is no trust fund to deplete. No bonds to redeem in the open market. It is the ultimate shell game. And millions of Americans have apparently swallowed this hook, line and sinker.

      • There is no trust fund to deplete. No bonds to redeem in the open market. It is the ultimate shell game. And millions of Americans have apparently swallowed this hook, line and sinker“…

        Amen…

        PARKERSBURG, W.Va. | The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration

        It only gets better, check out Flemming v. Nestor

        • re: 47 billion deficit…

          because of what JuanDOZE? how about the temporary payroll tax reduction? It was part of the stimulus.

          but guy.. we have a TRILLION dollar deficit and a 16 trillion dollar deficit and tell me what percent of that is due to social security?

          re: the “broke” trust fund..

          there are over 100 trust funds in govt including trust funds for the military retirement and health care and the gas tax as well as a variety of other trust funds.

          the trust funds are simply accounts where premiums for health insurance or gasoline tax receipts are kept, until that money is spent for the purpose for which the funds were put in the trust fund to start with.

          it’s true the govt spends those revenues instead of borrowing (selling more T notes to the public) but that does not change the overall debt and deficit at all.

          all that does is let the govt borrow the money from itself instead of selling more Tnotes to the public.

          If the govt did not spend the money in the trust funds, it would then have to borrow that money from the public via selling more T-notes.

          The trust fund accounts function like your own checking accounts if you had a paycheck deposited and you car broke and you spend the money to fix the car knowing the rent was also due later in the month but you knew more money was coming into the account later so you take a temporary loan to pay the rent then pay it back when you get paid again.

          It’s not a good way for an individual nor the govt to do business but the idea that the govt is moving money around to pay bills and avoid borrowing more until it has to – has nothing to do with the 100+ trust funds because each one of those funds have continuing sources of revenue.

          In the case of SS, 865 billion dollars a year comes from FICA taxes and it’s those FICA revenues that pay virtually ALL of the Social Security benefits – right now.

          In the future, in the next 10-20 years – social security will go into deficit if nothing is changed but keep in mind this has little to do with the deficit right now – so why is SS a priority right now? If you “cut” SS, it does nothing for the deficit… not a thing..

          people have bought into the sound bite propaganda that is being spread – by organizations and people – who are opposed to the CONCEPT of SS – and these folks have ALWAYS been opposed to the CONCEPT of SS so now they are using the deficit and debt to, once again, attack the CONCEPT of SS but the facts are simple: FICA and SS have nothing to do with the deficit and debt until and unless SS payouts exceed FICA revenues.

          In that case – SS is indeed OWED the money that FICA originally put in the trust fund. That’s not general revenue money, it’s FICA money.

          but let’s say that the govt reneges on that and benefits outstrip FICA – what happens?

          By LAW, social security benefits must be reduce to be no more than FICA revenues are.

          So if that is true, and it is, tell me how that affects the budget and general revenues?

          folks need to ask these questions of the folks who spout the propaganda because the truth is not what they are saying.

          • Someone needs to read the SS/Medicare Trustees report each year. Or better yet, download anything written by Chuck Blahous, one of the trustees…he also writes for Mercatus.

            SS has not covered its annual outgo for the past 4 years…that is a deficit in anyone’s book.

            We do not have a dedicated stream of funding for enough programs then, do we, if we have $1 trillion+ deficits staring us in the face for years to come?

            Any talk of trust funds providing sufficient resources to pay for our government is ridiculous when we are borrowing 40 cents out of every $ we spend.

            The answer is cutting spending, reforming entitlements and reducing the rate of growth in everything ASAP. Everything President Obama is genetically opposed to…it must be in his DNA because his actions don’t support any form of logic

          • Someone needs to read the SS/Medicare Trustees report each year. Or better yet, download anything written by Chuck Blahous, one of the trustees…he also writes for Mercatus.

            point to the pages you are using for your thoughts.

            “SS has not covered its annual outgo for the past 4 years…that is a deficit in anyone’s book.”

            are you counting the stimulus – the 2% payroll tax reduction that was done on purpose?

            now tell me how much the deficit was or will be when the temporary reduction is discontinued.

            “We do not have a dedicated stream of funding for enough programs then, do we, if we have $1 trillion+ deficits staring us in the face for years to come?”

            we do but FICA/SS is a gnat on a dogs butt in this game.
            if you look at the SS shortfalls after resuming the full payroll tax rate – what do you see?

            “Any talk of trust funds providing sufficient resources to pay for our government is ridiculous when we are borrowing 40 cents out of every $ we spend.”

            FICA is what generates the 865 billion dollars a year that pay the benefits and FICA is also what generated the money in the trust fund – not general revenues.

            “The answer is cutting spending, reforming entitlements and reducing the rate of growth in everything ASAP. Everything President Obama is genetically opposed to…it must be in his DNA because his actions don’t support any form of logic”

            I agree with you but SS is not any significant part of this problem and if you look at the facts – the facts are that we bring in about 1.5T in tax revenues – general fund revenues – and we are spending a trillion more than that – roughly split 50-50 between non-SS entitlements and National Defense ( which is 1/2 DOD but 1/2 homeland security, NASA, DOE, the VA, etc).

            it’s EASY to say we have a spending problem.

            Now try getting a trillion out of the current spending profile. You cannot do it with entitlements alone, you have to have about 1/2 of it in National Defense.

            and that’s according to most sources – simply not doeable without more tax revenues as part of the equation.

            but I invite anyone to find a trillion dollars in cuts without wiping out entitlements all together – and that’s just not going to happen.

            at the end of the day – every one is going to have to take a haircut – Medicare, MedicAid, DOD, National Security – and those who benefit from tax deductions. All of them.

          • Well now if its long, windy, & factless it must be larry g

            Apparently you didn’t read or your reading comprehension is somewhat less than nil larry g

            Go back to Nestor v Fleming and try again…

          • You all need to read the attached reports by Chuck Blahous who happens to be on the SS/Medicare Trustee Board. No one on this email chain are o that board from what I can tell.

            He knows what he is talking about. SS and Medicare are causing the deficits and need to be fix and completely reformed. Converted to private investment and insurance vehicles (like they did in Chile in 1980 with their SS program)

            http://www.telemachusleaps.com/2013/02/10-things-latest-cbo-report-says-about.html

          • SS will eventually not be able to pay full benefits from the FICA revenues unless some changes are made and the reason why is that by law, SS cannot pay out more in benefits than FICA generates.

            so there is NO deficit .. by law.. it cannot have one.

            now the next argument is that even though FICA generated the TRUST FUND that the money is gone and therefore tough luck for SS.

            All that happens in that case is that the date that benefits are reduced is advanced.

            but for the moment, let’s assume that general fund money will be used to make up the gap.

            Tell me how much money we are talking about in the next few years and put that amount in the context of a trillion dollar deficit.

            This is nothing more than an effort to kill the CONCEPT of SS. It has nothing to do with the facts and realities and you can tell this because where are the specifics, for instance, what the impact on the budget would be?

            there are none because those who advocate harming SS know the numbers are really small – for sure, in the early going…

            by the way – look at where the link takes you…. is that an objective site?

            where are the Chuck Blahous “reports”?

            Medicare (not partA) but Parts B,C,D need to be reformed for sure but ask yourself this. Should a person who receives over 100K in RETIREMENT INCOME be paying only 100.00 a month for health care? Thats the problem…, that needs to be addressed.

            and Chuck Blahous is NOT proposing to get rid of SS, he is advocating reform of it.

            It’s amazing to me that folks basically believe what they want to believe here instead of dealing with the facts.

          • You all need to read the attached reports by Chuck Blahous who happens to be on the SS/Medicare Trustee Board“…

            Actually frank what I need to know is when are we as a country going to wake to the fact that we as a country are going to dump these excessivly expensive socialist wealth transfer scams…

            Personally I think this Blahous gent points out valid reasons for dumping them…

            From Cox & Archer writing in the Nov. ’12 issue of the WSJ: As of the most recent Trustees’ report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion

          • there is no unfunded liability for SS per se because by law, it cannot pay out more in benefits than FICA generates – and one can verify this pretty easy because news reports are abundant about the future cutting of benefits if nothing is done.

            So the concept of unfunded liabilities for a program that by law cannot go to deficit is at best – dishonest.

            but I had also asked Frank to tell me how much SS is short this year, next year and 3 or 4 more years into the future… 2014, 2015, etc.. and to provide that number in relation to the overall budget deficits.

            and he did not answer even though that data is contained within the links he provided.

            Medicare (B,C and D) is a different story but again – I ask for specific numbers instead of the overall anti-any/all entitlements narrative.

            Let’s get some real numbers into the conversation.

            how much general fund money goes for Medicare right now? how much in the coming years?

            those numbers are also in the CBO report that Frank provided as well as the Social Security Trustees reports.

            so we have a trillion+ deficit – what portion of that deficit is due to Medicare? Got some numbers?

  22. Especially Larry G. You should read Chuck Blahous’ reports first on this list.

    There is no way that entitlements are ever going to be wiped out under ANY deficit-reduction plan. These are always spread out over a 10-year long process, not one year as you tried to build a straw man argument here.

    There is roughly $20 trillion in projected entitlement spending over the next decade. Raising the retirement age to 70 and means-testing the heck out of both SS and Medicare just about reforms both programs enough for the required savings needed to balance the budget over that time…almost all by themselves.

    There is absolutely no reason on God’s Green Earth that a low-income worker should be paying payroll taxes that go the next day to support Warren Buffett in his dotage on SS or Medicare, an 85% taxpayer-supported welfare program if there ever was one. Or Bill Gates when he turns 66 for SS and 65 for Medicare.

    See? We have already raised the retirement age for SS from 65 to 66 (it started in 1983) and no one knows the difference! We shoulda started raising the retirement age then to 70 for both Medicare and SS by 2000 and we would be flat even in our budgets today. Plain and simple.

    • @Frank – how about you providing a link that goes to the reports?

      and Frank be SPECIFIC about WHICH entitlement programs you are speaking of guy AND USE REAL NUMBERS with real links to those numbers.

      Otherwise, this just sounds like a run of the mill, anti-govt, anti-entitlement rant.

      Tell me exactly, for instance, how much money the general fund will have to give to SS next year – to keep benefits level? How many dollars in 2014?

      • Larry: the links are embedded in the blog entry I just put up there. If you read it, you’ll see the 3 highlighted links to Chuck’s work and the CBO report.

        It explains everything. And then we can have a coherent intelligent discussion about this. Otherwise, your rantings and ravings can be saved for some other issue.

        • @Frank – that’s a soundbite bullet list.

          I’m asking specifics about SS in particular.

          what exactly happens to SS in 2014 in terms of money needed from the general fund to keep benefits level?

          do you know that?

          what SPECIFICALLY is Chuck Blahous saying about the CURRENT FINANCIAL STATUS of SS?

          All that website is – is a sound-bite bullet list of anti-entitlement blather.. it has almost no specifics at all.

          It’s dishonest to cite Chuck Blahous as an “expert” in SS and what he offers is sound bites that are so general as to be useless in terms of specifics.

          So I did ask – tell me or refer me to a link that specifically says how much SS will affect the general budget in the coming years.

          If you are going to hold your attitude – what are you actually basing it on?

          • here you go Larry…all the detail you can ever want to see. Don’t post anything until you have read every single word of this report. As in responding in the next 10 seconds cause I will know you have not read it at all.

            it is in there…SS is in shortfall this year and has been drawing down on the proverbial ‘trust fund’ for the past 3 years…..otherwise, the accounting for the fake trust fund would not be going down

            http://www.ssa.gov/oact/tr/2012/tr2012.pdf

          • @Frank – I’ve read that report, have you?

            Can you tell me how much SS is short this year or next year or the year after?

            how much will it be short? tell me that.

            Frank – the past 3 years there was a 2% reduction in the payroll tax – and it was covered by general revenues because it was part of the stimulus.

            but tell me in the next 5 years, with the 2% re-instated, how much SS will be short.

            it’s in the report you sent you know….as well as the CBO report referenced earlier.

            what I’m trying to find out if you know how much SS affects the current budget in dollars and cents as well as the next 5 years of budget in dollars and cents.

            do you know? You’ve got the report. did you read it?

          • Frank – did you answer the question about SS ?

            when when SS go negative ? what year?

            and by how much?

            and why is SS a priority right now? How much of SS
            right now is taken from the CURRENT budget?

            how much next year?

            how much in 2015?

            have you answered these questions? nope.

  23. @LarryG
    This is not contributing to the debate at all, but I have to say that you kick butt! Man, I have learned a ton by reading your posts! Frank Hill is usually a decent foil, trying to parry usually on a reasonable level. However, he goes off the rail sometimes when you pin him down or put him down. I’m not much for put downs, but I understand how frustrating it must be, and I’m impressed that you continue to participate here. Since you may be converting some folks that actually want to know more, kudos to you for keeping up the fight!
    Aside from Frank Hill, there are some other conservatives that bring up decent points, too. I just wish Juandos would go away. While there are others that chime in without making cogent arguments, they usually stop commenting after you stick it to them – but Juandos just provides no facts and seems to be bent on spewing venom with no real contribution. I will say, though, that it’s polite you address him. Thanks again LarryG!

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