Democrats won New York’s 26th Congressional District special election yesterday, defeating Republican Jane Corwin. Democrats now think they have found the silver bullet for 2012: Medicare.
Want to start a fight on Tea Party Nation? Mention Social Security is an entitlement and you will have people coming out swinging.
What do these two things have in common?
They are going to be huge battles for 2012.
Beginning in July, the leading wave of the baby boom generation officially hits 65. Many of these Boomers will start retiring. The retirement of Boomers is going to accelerate as we go through the next years. The numbers do not lie and the numbers are the problem.
Medicare, the old age and disability medical insurance plan will be broke at the present rate by 2024. Given that experts just shaved another year off of that program’s life expectancy, it will probably happen sooner than that. Social Security, the government’s most popular entitlement program, will be broke in 2036. Of course, its life expectancy just had a year shaved off of it too, so Social Security will be insolvent before then.
I can hear the screams from here. “I have paid into Social Security all of my life. It is not an entitlement.”
Actually, it is. For years, your Social Security payments have gone into the general fund. Your Social Security is not like a private retirement account. If you exhaust your retirement account then it is simply gone. When you start drawing Social Security, six years after you start, you have exhausted all of the contributions you made over a lifetime. Yet, you simply do not stop drawing your Social Security. The average life expectancy in America is almost 78 years. If you start drawing Social Security at 65, you have gone through your retirement by 71. Who is paying for those remaining years of your life? It isn’t you. And that is the definition of an entitlement versus a benefit. A benefit is something you paid for. An entitlement is something you did not pay for.
The Democrats think they have found the magic weapon to use against the GOP in the 2012 elections. Politico today fronted what they hope was a joyful headline, “Have the Democrats cracked the code for 2012?”
For years the Democrats have pushed ads saying that the Republicans are going to kick Granny off of Medicare and cut off her Social Security. A liberal commercial recently aired showing someone looking very much like Paul Ryan pushing an old lady off of a cliff.
This is the problem with entitlement programs. They eventually create a dependency. And with that dependency comes outrage when there is an attempt to cut the program.
When Social Security started, the average life expectancy was 63 years. The numbers worked back then. People paid in but most people did not live to see their benefits. Then life expectancy rose. When Social Security started, there were 16 or 17 workers for every retiree. When the baby boom finally finishes retiring, there will be 3 workers for every retiree. The numbers do not lie.
Perhaps the fate that will befall the baby boom generation is ironic since it was known for rebellion against the older generation. The grandparents of Boomers had no retirement. Some drew Social Security and they had no Medicare. The parents of the Boomers lived through the Great Depression and World War II. They were the ones who invented retirement. They were the ones who at 65 were able to retire and live comfortably. For them the American dream became the golden years where they traveled and visited their children and grandchildren and life was good.
For the Boomers, the generation that once said never trust anyone over thirty, their retirement is going to be more like their grandparents older years. Those Boomers who retire now may find themselves forced back into the job market in a few years as the nightmare of unfunded pension liabilities causes many pensions to fail.
There are a few solutions to the Social Security nightmare and none of them are pleasant. Raising the retirement age is the most logical. Means testing is also another idea and finally, the left will suggest massive tax increases. That idea is dead on arrival. The twenty somethings who have just gotten out of college and are just starting families of their own are not going to want to pay huge amounts in taxes so the Boomers can have their Social Security and Medicare entitlements.
Once again, I can hear the screams, “I paid into Social Security all of my life. It isn’t an entitlement.” I paid into Social Security too. All of my life. I won’t see a dime of mine.
Politicians, both Republican and Democrat saw the Social Security Trust Fund as just another source of money they could spend. And like the crazed crack head going for more cocaine, they stole it and blew through it faster than junkie on a bender. We can argue all we want about whose fault it is, but the simple fact of the matter is, Social Security is heading for insolvency and it is not going to be here much longer.
The American vision has always been that we leave the country for the next generation better than we had it. Each generation of Americans is better off than the generation before them. The Boomers may be the generation that breaks this streak and leaves the country worse off. Our children may not have the wealth we have had and may end up considerably worse off. If we Boomers do not do something about these entitlement programs, our children will suffer as the economy simply collapses in the future.
Are we that arrogant? Are we that self-centered? Is that what we really want?
Or will we Boomers, as we go to our “golden years,” step up and make the changes and sacrifices necessary so that our children and grandchildren are not bankrupt?
Tags: baby, boomer, congress, democrat, medicare, republican, security, social
Permalink Reply by Gianni P on "What people never factor in is the free survivor benefits. It has been a goodie box."
>>>> More money, much more, is spent by government on social engineering projects created largelyfor unproductive people than on SS in its entirety....far more. That's where the young people should focus their attention - they'll get more bang for their buck. It's too bad there is not enough money available to return all the money anyone of any age has paid into SS. If there were, the money could be returned with some nominal interest pegged to Treasury rates, and then, everyone is on their own again -- as it should be. No government supplied benefits to anyone for any reason...the way it once was and the way the greatest economic success in history came about. Plus, it would do wonders for families.....who can rely on each other for the things now provided by the Nanny State. Besides, if we don't turn this thing around, we may be faced with a full-on financial collapse and along with it, a complete termination of government assistance programs for lack of fungible resource to continue them.
Permalink Reply by joetheeconomist on "More money, much more, is spent by government on social engineering projects created largelyfor unproductive people than on SS in its entirety....far more."
At 600 billion or so, SS by itself is 16% of the budget. So I am not sure how much far more you think there is.
"It's too bad there is not enough money available to return all the money anyone of any age has paid into SS."
We put 12.4% of the nations income into it. There is plenty of money. The problem is what we do with it. We have returned more money to retirees than almost any of them have paid in terms of 'insurance'. The problem isn't the first receipients didn't contribute. The problem is that the first 40 years of beneficiaries didn't contribute.
If you want to turn it around the first thing you need to do is quit listening to Washington. They aren't trying to fix the system, they are trying to convince the next generations to keep it going a little longer. Good luck with that.
Permalink Reply by Gianni P on If you saw my other email that lays out the cost of non-SS outlays, you see that SS is a relatively small part of the entitlement program; approx 46% of the entire budget goes to other (non SS) entitlements. of that 46%, 24% goes to various forms of medically-related entitlements and 22% goes toward "Job and Family Care" entitlements. Details here...
http://www.whitehouse.gov/taxreceipt
So, you see 46% of the budget is "far more" than the 16% (your figure) allocated for paying SS. In fact, it's almost THREE times more. That was the basis of my comment. In the big picture, SS is relatively small potatoes and young people looking to abandon it should be far more concerned about those non-SS entitlements - since the folks who typically receiving those benefits contribute nothing to receive them. Think 'multi-generational welfare' for example.
I will not support any reduction in SS until/unless those outright giveaway programs are fixed through reduction or elimination.
Permalink Reply by joetheeconomist on Understand what you are looking at. It is a governmental receipt that is wrong. It shows Social Security computed at 6.2% instead of 12.4%. If you look at the 80K option, it says that SS was $4,900. which is almost more than all of your other taxes combined. Once you correct it, the Social Security is close to 10,000. Your medicare tax is close to $2,500. Combined those are basically 3 times what you paid in income taxes. So once you use the data correctly you will see that Social Security and Medicare are the bulk of your taxes.
Also the data that you point to is not aligned the way that you used it.
"Federal military and civilian employee retirement and disability" is not an entitlement it is a benefit owed because someone worked for the government. The same is true of Unemployment Insurance. This is an obligation caused by employment. It isn't a gift from you the tax payer to private citizens.
You need to fix your "contribution" and recompute.
Permalink Reply by Edward Moses on I believe your arithmetic is a little off. Anyone retiring in 1977 would have been paying into SS for at least 40 years. The program started in 1937 and a person born in 1915 would have been 22 years of age. What do you want to do, create another genreation gap. I paid SS since 1946 until 2009. That is 53 years of paying into SS (which I didn't get to vote on) and I started to pay into Medicare since Johnson create the program.and I do believe that a tea party is necessary, but I can't believe in some of the candidates they seem to support.
I know that some of the RINO are making headway into the Tea Party membership.
Permalink Reply by Edward Moses on Your comment is laughable. I am not a baby boomer, I came before that and I didn't have a vote on SS either. I did not vote for LBJ who was the instigator of Medicare. I grew up in the depression and World War II and a hell of alot of decisions were made long before I got a chance to vote. JFK made the largest tax cut in history and I didn't vote for him either. The Baby Boomers are the biggest baby group that I know of and they had the best of many things that the older generation created which my genration never had.
Even the war that was fought by my generation is a forgotten war. It seems that we went from the World War II generation to the Viet Nam era without once given a thought to the Korean War generation. The Baby Boomers had an opportunity to change things, but they were too thrill with Bill Clinton. He used the Social Security fund to balance his budget. Ane I believe that the Baby Boomers still think he was the greatest President since sliced bread.
Permalink Reply by Helen E. Schuenemann on Sue, your words are wisdom.. Because we allowed the fleecing, I don't think most of us want our kids to suffer for our mistakes. We set a bad example and need to correct it. We do need to honor America and all that our forefathers and so many since have sacrificed to make it a nobel nation. We can do our part by dismantling these ponzi schemes that rob us all under the name of social justice and safety nets that we should be providing for ourselves and others through church and charaties.
Permalink Reply by maggie b on Permalink Reply by Sandra Reist on Maggie,
I say Amen to what you are saying!
Permalink Reply by Gail Cohen on Permalink Reply by BAYOU1960 on i beleive the solution to social security is to bring companies back to the usa with the equil trade bill the new jobs that
are made would be more payment into the social security system
i really dont understand with the bad economy why america doesnt go back to the equal trade bill
this would create more jobs in america
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