Archive for Social Security

Antisocial Insecurity

Are we still talking about a government agency that blew hundreds of millions of dollars on a botched computer system? Isn’t that kind of 2013?

Ohhhh… a different government agency and a different computer system.

My eyes are up here, perv.

Six years ago the Social Security Administration embarked on an aggressive plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. Nearly $300 million later, the new system is nowhere near ready and agency officials are struggling to salvage a project racked by delays and mismanagement, according to an internal report commissioned by the agency.

In 2008, Social Security said the project was about two to three years from completion. Five years later, it was still two to three years from being done, according to the report by McKinsey and Co., a management consulting firm.

Today, with the project still in the testing phase, the agency can’t say when it will be completed or how much it will cost.

In the meantime, people filing for disability claims face long delays at nearly every step of the process — delays that were supposed to be reduced by the new processing system.

[A]gency leaders have decided to “reset” the program in an effort to save it, the report said. As part of that effort, Social Security brought in the outside consultants from McKinsey to figure out what went wrong.

They found a massive technology initiative with no one in charge — no single person responsible for completing the project. They issued their report in June, though it was not publicly released.

Didn’t see that coming!

How many bloated government agencies, dispensing billions of dollars we don’t have, can waste hundreds of millions of dollars on computer systems that don’t work before we stop doing it? Rhetorical question. As many bloated government agencies as we’ve got.


So Much Owed to So Many by So Few

In the few remaining minutes we can even remotely trust anything from the Census Bureau…

Buried deep on the website of the U.S. Census Bureau is a number every American citizen, and especially those entrusted with public office, should know. It is 86,429,000.

That is the number of Americans who in 2012 got up every morning and went to work — in the private sector — and did it week after week after week.

Of the 103,087,000 full-time, year-round workers, 16,606,000 worked for the government. That included 12,597,000 who worked for state and local government and 4,009,000 who worked for the federal government.

Why does he single out private sector workers? Don’t public sector workers work too (after a fashion)? Maybe so, but they are paid by the taxes of the 86 million private sector workers.

Which gets to his point:

At first glance, 86,429,000 might seem like a healthy population of full-time private-sector workers. But then you need to look at what they are up against.

The Census Bureau also estimates the size of the benefit-receiving population.

This population, too, falls into two broad categories. The first includes those who receive benefits for public services they performed or in exchange for payroll taxes they dutifully paid their entire working lives. Among these, for example, are those receiving veteran’s benefits, those on unemployment and those getting Medicare and Social Security.

The second category includes those who get “means-tested” government benefits — or welfare. These include, for example, those who get Medicaid, food stamps, Supplemental Security Income, public housing, Temporary Assistance for Needy Families, and Women, Infants Children.

There were 108,592,000 million people in the fourth quarter of 2011 who lived in a household that included people on “one or more means-tested program.”

Those 108,592,000 outnumbered the 86,429,000 full-time private-sector workers who inhabited the United States in 2012 by almost 1.3 to 1.

This brings us to the first category of benefit receivers. There were 49,901,000 people receiving Social Security in the fourth quarter of 2011, and 46,440,000 receiving Medicare. There were also 5,098,000 getting unemployment compensation.

And there were also, 3,178,000 veteran receiving benefits and 34,000 veterans getting educational assistance.

All told, including both the welfare recipients and the non-welfare beneficiaries, there were 151,014,000 who “received benefits from one or more programs” in the fourth quarter of 2011. Subtract the 3,212,000 veterans, who served their country in the most profound way possible, and that leaves 147,802,000 non-veteran benefit takers.

The 147,802,000 non-veteran benefit takers outnumbered the 86,429,000 full-time private sector workers 1.7 to 1.

How much more can the 86,429,000 endure?

Baby boomers are starting to retire. Each former worker who starts to collect benefits represents a two-person swing. (If ten people work to support ten beneficiaries, and one retires, the difference is now two, nine to eleven.)

One can make a moral case against this (it’s unfair and improper for a nation of 320 million people to be supported by barely a quarter of the population). But one doesn’t need to resort to moral arguments (fear not, liberals). Who thinks this is sustainable? When does the precarious balance come crashing down? Always sooner than you think is the answer.

And only Mark Steyn will be laughing as he cashes his royalty checks.


We Get Results

Aggie told you about the federal government confiscating tax returns of people whose parents—their parents!—may have owed money.

Not no more:

The Social Security Administration announced Monday it is suspending a controversial program that goes after adult children of deceased taxpayers who the government claims were recipients of overpayments more than a decade ago.

Acting Social Security Commissioner Carolyn W. Colvin said she has directed an immediate halt to the three-year-old program while the agency does a review. The controversial program seized tax refunds in an effort to recoup the funds.

The move to halt the program came after many of the recipients and members of Congress complained to the federal agency.

It may sound bad, but consider some of the deadbeats they’ve gone after:

There are several scenarios in which people may have received overpayments as children. For example, when a parent of a minor child dies, the child may be eligible for survivor’s benefits, which are typically sent to the surviving parent or guardian.

If there was an overpayment made on behalf of the child, that child could be held liable years later, as an adult.

Also, if a child is disabled, he or she may receive overpayments.

Orphans and crippled kids: those bastards are always trying to get away with stuff. But, typically, our government crumples at the first sign of resistance:

“We want to assure the public that we do not seek restitution through tax refund offset in cases when the debt in question was established prior to the debtor turning 18 years of age,” Social Security spokesman Mark Hinkle said in an email. “Also, we do not use tax refund offset to collect the debt of a person’s relative — we only use it to collect the overpaid benefits the person received for himself or herself.”

Hinkle said the debt collection could be waived if the person is without fault and repayment would “deprive the person of income needed for ordinary living expenses or would be unfair for another reason.”

I thought paying taxes was patriotic? What a climb-down. When did we become France?


Not Your Granddaddy’s Pension

Not his pension either:

We are locked in a generational war, which will get worse before it gets better. Indeed, it may not get better for a long time. No one wants to admit this, because it’s ugly and unwelcome. Parents are supposed to care for their children, and children are supposed to care for their aging parents. For families, these collective obligations may work. But what makes sense for families doesn’t always succeed for society as a whole. The clash of generations is intensifying.

Last week, a federal judge ruled that Detroit qualifies for municipal bankruptcy. This almost certainly means that pensions and health benefits for the city’s retired workers will be trimmed. There’s a basic conflict between paying for all retirement benefits and supporting adequate current services (police, schools, parks, sanitation, roads). Detroit’s retired workers have swelled, benefits were not adequately funded and the city’s economy isn’t strong enough to do both without self-defeating tax increases.

The math is unforgiving. Detroit now has two retirees for every active worker, reports the Detroit Free Press; in 2012, that was 10,525 employees and 21,113 retirees. Satisfying retirees inevitably shortchanges their children and grandchildren. Though Detroit’s situation is extreme, it’s not unique. Pension benefits were once thought to be legally and politically impregnable. Pension cuts in Illinois (last week), Rhode Island and elsewhere have shattered this assumption. Chicago is considering reductions for its retirees.

What’s occurring at the state and local levels is an incomplete and imperfect effort to balance the interests of young and old.

This is Robert Samuelson, a writer I read with interest and respect. And he’s not wrong.

But he is incomplete. To be sure, the Welfare State (literal and metaphorical) robs from the young and gives to the old—that’s the textbook definition of Obamacare. But what were the old thinking? I first heard the expression “demographic tsunami” 20 years ago, and was familiar years before that with the concept of baby boomers retiring en masse. And that in their narcissism or misguided generational self-loathing, they refused to reproduce in numbers necessary to see to their long, self-indulgent retirement. What made them think that deals with public sector unions could include retiring before the age of 50 on 100% of their last salary?

When Social Security was passed, 65 was old (older than average life span). Now, it’s the speed limit. I loved Santa Claus and the Easter Bunny (still do), but I had to let go of them. But I would believe in the Tooth Fairy before I would have believed in these the whole preposterous notion that we could support the masses of Seasoned Citizens for decades in their Golden Years. Shame on them for thinking it, and double-shame for demanding it.


Dispatches From the Front Lines of Socialized Medicine

After yesterday’s post on the thousands of deaths by starvation, dehydration, and bed sores at the hands of Britain’s NHS, I thought it might be time for another comprehensive review of life (and death) under “free” medicine:

Hospitals in England have become places “where people go to die”, the former head of the NHS Confederation has said as he calls for care to be given in the home.

Mike Farrar, who was once tipped as a candidate to become NHS England’s chief executive, has attacked the health service for using treatment in hospital by default and failing to offer alternatives to patients.

His own mother was admitted to hospital after being diagnosed with vascular dementia because her husband was unable to provide her with round the clock care, he explained.

“I saw with my own mother that hospitals are where people go to die …

Okay, it’s not as dramatic as the opening line suggests. But still.

This is less dramatic, but at least delivers on its promise of shock and outrage:

Around 170 NHS operations are cancelled every day at the last minute as hospitals struggle to cope with a lack of beds, staff and faulty equipment, new figures reveal.

A total of 30,415 elective operations were shelved between April and September this year on the day patients were due to have surgery or scheduled to arrive in hospital – a 12-year high.


Figures released by the NHS have revealed a rising number of assaults suffered by staff in hospitals.

St Helier accident and emergency nurse Anthony Boobbyer said: “Unfortunately, I have seen colleagues punched and kicked but they always remain calm.

“We tend to see more verbal abuse, which again is unpleasant and this tends to arise when patients are frustrated about their situation.”

The number of assaults on NHS staff rose across England last year.

Cue the genius/idiot Stephen Hawking (behind a pay wall): The NHS “must be preserved from commercial interests who want to privatise it”, Professor Stephen Hawking has warned…

Hawking claims to have had his life saved by the NHS—which is very good news for him. He lives to boycott Israel another day. Thousands of others not so much.


The E Word

Let’s pause in our incessant bashing of President Obama (briefly, I promise!) to bash everything he stands for:

Let’s drop the whole notion of “entitlement.” Just eliminate it. Politicians, pundits and academics who talk about entitlements would then have to name the actual programs and argue their merits and demerits. This would encourage clarity and candor. Of course, that’s why it won’t happen.

Social Security, Medicare (health insurance for the elderly) and Medicaid (health insurance for the poor) aren’t the only big entitlement programs. Here are 12 of the largest in 2012, ranked by the number of recipients, according to the Office of Management and Budget. (Note: CHIP stands for “children’s health insurance program.” Child nutrition is mostly subsidized school meals. Supplemental Security Income aids the aged, blind and disabled.)

1. Medicaid/CHIP: 63.2 million

2. Social Security: 55.8 million

3. Medicare: 49.9 million

4. Food stamps: 46.6 million

5. Child nutrition: 35 million

6. College loans: 11.3 million

7. Unemployment insurance: 8.9 million

8. Supplemental Security Income: 7.9 million

9. Veterans compensation: 3.8 million

10. Civil service retirement: 2.5 million

11. Military retirement: 2.2 million

12. Farm subsidies: 1.3 million

There’s overlap. Most Medicare recipients receive Social Security. Some unemployed get food stamps. After eliminating double counting, about half of U.S. households have some federal benefit.

Sometimes, there’s overlap of the overlap: one—many more than one—could conceivably receive Medicaid/CHIP, Food Stamps, Child Nutrition, and SSI, among a few other possible “entitlements”.

That’s no accident. If Americans knew the true cost of the Welfare State, they would plotch. As every good money launderer knows, you have to break the money roll into bite-size chews. But when Mitt Romney called out the shameful, unsustainable situation where almost half the people suck from the teat of the state, he was roundly slammed. So, maybe America knows, but just doesn’t give a hoot.

In 2012, Social Security, Medicare and Medicaid alone represented 44 percent of spending; all entitlement programs were 63 percent. But it’s hard to control entitlement programs because their constituencies are so large.


[T]he popular view of entitlement has little standing in law. In a 1960 decision, Flemming v. Nestor, the Supreme Court ruled that Congress can alter Social Security benefits as it pleases. The court made it clear in later decisions that “the payment of Social Security taxes conveys no contractual rights to Social Security benefits,” says a Congressional Research Service report. Legally, other entitlement programs are similarly vulnerable.

They should be.

[W]e’d be better off ditching the notion of entitlement. It has outlived its usefulness. Programs shouldn’t be shielded from constructive criticism and change just because they’re hiding behind an obsolete label. Given most programs’ popularity and big constituencies, draconian cuts are unlikely and undesirable. But huge savings over decades can result from modest shifts in eligibility requirements and benefit levels. These could be phased in to make them more palatable and less disruptive to the economy.

Say, don’t we have a “transformative” president? Sound like just the man for the job!

Too much change is being forced onto too little government. Deadlocks persist because, without Democratic entitlement concessions, Republican tax concessions are implausible. Ideally, the president would seek to change public opinion by confronting its contradictions. But he has done little, leaving the White House and Congress in a state of perpetual warfare.

It’s the permanent campaign. Governing is boring. (Told ya we’d be bashing Obama again before you know it!)


On Disability

Not workers, the economy:

The unexpectedly large number of American workers who piled into the Social Security Administration’s disability program during the recession and its aftermath threatens to cost the economy tens of billions a year in lost wages and diminished tax revenues.

Signs of the problem surfaced Friday, in a dismal jobs report that showed U.S. labor force participation rates falling last month to the lowest levels since 1979, the wrong direction for an economy that instead needs new legions of working men and women to drive growth and sustain a baby boomer generation headed to retirement.

The unemployment rate in Friday’s report fell to a four-year low of 7.6%, which most times signals job growth. This time it reflected workers leaving the workforce, a problem that could persist: Economists say relatively few people are likely to trade their disability checks for paychecks, in part because the program doesn’t give much incentive to leave.

Federal Reserve Chairman Ben Bernanke has worried that the financial crisis would lead to a permanent loss of workers, setting up what economists call hysteresis, a term borrowed from physics to describe temporary market changes that lead to permanent economic losses.

It is no longer a theoretical problem, said David Autor, a professor at the Massachusetts Institute of Technology, who has studied the disability program. The economy has a case of hysteresis, he said, created by the permanent transfer of workers to disability rolls.

Think of the economy as a giant hamster wheel, with room enough for all the hamsters—like Aggie’s dynamic duo of Barney and Frank, only multiplied by about a hundred million—to turn the wheel of commerce.

Now picture some of those hamsters not participating. They stop churning their little paws and stop helping to turn the wheel. They, in fact, become dead weights whom all the other hamsters have to carry. Until more hamsters grow tired of the increased exertion for less spin and they too drop out. Eventually, you have very few hamsters laboring tremendously hard to carry a malignant lump of unproductive hamsters. And the wheel of commerce turns exceeding slow.

That’s the BTL Theory of Economic Stagnation. It fits pretty well with the state of this economic “recovery” we’ve been enjoying now for nearly (say it with me) four years.

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Cui Bono?

What’s that, the brother of the guy in U2?

No, it’s Latin for don’t touch my effin’ entitlement program:

[M]ore than half of all entitlement spending helps middle class Americans.

As for income levels, those in the middle — earning between $30,000 and $120,000 — received 58% of all entitlement dollars in 2010.

One reason so many middle income Americans are using the safety net is the recession. Workers nearing retirement age have found themselves without work in recent years and were forced to go on Social Security and Medicare earlier than planned.

I know I’m pretty tiresome on the subject, but the recession ended 3 1/2 hears ago. We just reelected a guy for the miraculous (and fraudulent) achievement of wedging unemployment below 8%. Why are people making more than $100,000 receiving one cent in relief?

The share of middle-income American households receiving Social Security benefits jumped to 69%, up from 63%. Likewise, the share of Medicare recipients in that group rose to 64%, up from 58%.

“These are programs that are of great concern to the middle class and greatly affect their well being,” said Arloc Sherman, senior researcher at the center. “Social Security has the large effect of keeping people in the middle class.”

With respect, that’s not what it’s for. It was founded as a program to keep the elderly from starving during the Great Depression (when life expectancy was lower than the retirement age), not as an annuity paid out over decades.

It gets worse:

Disability benefits, meanwhile, have become increasingly popular as the nation ages and the economic downturn makes it harder for the disabled to find jobs. Those with health issues who would prefer to keep working, are forced to go on disability instead. Applications for the Social Security disability program reached an historic high in the wake of the Great Recession, exceeding 2.9 million in 2010, according to the Congressional Budget Office. Once people start receiving benefits, few leave the program. The average monthly benefit was $1,068 in 2010.

On the other side of the political aisle, the worry is not who is getting the benefits but how many people. The Heritage Foundation just released a study showing that 70 million people are in at least one of 47 government programs.

“Our concern is that entitlements and safety net programs have been growing so rapidly over time, regardless of the economy,” said William Beach, who just stepped down as Heritage’s director of the Center for Data Analysis. “The numbers are becoming unsustainable or already are.”

70 million people is about 30% of the population. Three in ten—almost one in three—receives some sort of government assistance. How is that sustainable, and how is that defensible in a (once) prosperous country? And given that people rarely go off these programs once they’re on them, how do you change the system to something that is sustainable?

If you have the answers to these questions, you may be qualified to be president. But good luck getting elected.

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The Quiet Man

It’s not like I’m an authority, but I could probably name 20 big-time faculty members out of all of Harvard University.

But I couldn’t name him:

‘We have now an American political party and a European one. Not all Americans who vote for the European party want to become Europeans. But it doesn’t matter because that’s what they’re voting for. They’re voting for dependency, for lack of ambition, and for insolvency.”

Few have thought as hard, or as much, about how democracies can preserve individual liberty and national virtue as the eminent political scientist Harvey Mansfield. When it comes to assessing the state of the American experiment in self-government today, his diagnosis is grim, and he has never been one to mince words.

Mr. Mansfield sat for an interview on Thursday at the Harvard Faculty Club. This year marks his 50th as a teacher at the university. It isn’t easy being the most visible conservative intellectual at an institution that has drifted ever further to the left for a half-century. “I live in a one-party state and very much more so a one-party university,” says the 80-year-old professor with a sigh. “It’s disgusting. I get along very well because everybody thinks the fact that I’m here means the things I say about Harvard can’t be true. I am a kind of pet—a pet dissenter.”

He had me at “disgusting”. Actually, he had me at “We have now an American political party and a European one.” But despite the fact that I’ve lived in Boston for almost 20 years and Mansfield has been at Harvard for 50, I’ve never heard of him.

Yet once one has heard of him, one begins to understand why one hasn’t:

“All modern social science deals with perceptions,” he says, “but that is a misnomer because it neglects to distinguish between perceptions and misperceptions.”

Consider voting. “You can count voters and votes,” Mr. Mansfield says. “And political science does that a lot, and that’s very useful because votes are in fact countable. One counts for one. But if we get serious about what it means to vote, we immediately go to the notion of an informed voter. And if you get serious about that, you go all the way to voting as a wise choice. That would be a true voter. The others are all lesser voters, or even not voting at all. They’re just indicating a belief, or a whim, but not making a wise choice. That’s probably because they’re not wise.”

Nothing wrong with saying that—or there shouldn’t be. Those of us who helped reelect George Bush in 2004, after voting against him in 2000 (you’re welcome), were told how unwise we were every day. Maybe we were, but I have a two-word refutation: President Kerry.

Cat got your tongue?

Back to Professor Mansfield:

Harvey Mansfield Jr. was born in 1932 in New Haven, Conn. His parents were staunch New Dealers, and while an undergraduate at Harvard Mr. Mansfield counted himself a liberal Democrat.

Next came a Fulbright year in London and a two-year stint in the Army. “I was never in combat,” he says. “In fact I ended up in France for a year, pulling what in the Army they call ‘good duty’ at Orléans, which is in easy reach of Paris. So even though I was an enlisted man I lived the life of Riley.”

A return to the academy and a Harvard doctorate were perhaps inevitable but Mr. Mansfield also underwent a decisive political transformation. “I broke with the liberals over the communist issue,” he says. “My initiating forces were anticommunism and my perception that Democrats were soft on communism, to use a rather unpleasant phrase from the time—unpleasant but true.” He also began to question the progressive project at home: “I saw the frailties of big government exposed, one after another. Everything they tried didn’t work and in fact made us worse off by making us dependent on an engine that was getting weaker and weaker.”

Hang on, that sounds like me! Only roughly 45 years later, and in reverse order. It was the failure of liberalism to produce results in keeping with its goals that first soured me on the movement—and 9/11 that finished off liberalism for me once and for all. My research into the evils of communism really only began after communism itself was dead and buried.

The political task before every generation, Mr. Mansfield understood, is to “defend the good kind of democracy. And to do that you have to be aware of human differences and inequalities, especially intellectual inequalities.”

American elites today prefer to dismiss the “unchangeable, undemocratic facts” about human inequality, he says. Progressives go further: “They think that the main use of liberty is to create more equality. They don’t see that there is such a thing as too much equality. They don’t see limits to democratic equalizing”—how, say, wealth redistribution can not only bankrupt the public fisc but corrupt the national soul.

Consider the entitlements crisis. “Entitlements are an attack on the common good,” Mr. Mansfield says. “Entitlements say that ‘I get mine no matter what the state of the country is when I get it.’ So it’s like a bond or an annuity. What the entitlement does is give the government version of a private security, which is better because the government provides a better guarantee than a private company can.”

That is, until the government goes broke, as has occurred across Europe.

He’s not always so quotable—the text of the interview isn’t as easy to understand as it might have been when spoken—but those points are indisputable.

The entitlement quote reminded me of the scene in It’s a Wonderful Life when there’s a run on the bank. Jimmy Stewart and the lovely Donna Reed have to abort their honeymoon and turn the taxicab around to stave off insolvency and ruin. Owing to a forgetful bank clerk, the bank’s available cash has been misplaced. There’s no way Stewart can satisfy everyone’s demand to cash out. There’s barely any money at all, until Donna Reed holds up their honeymoon cash to offer it to the panicked customers. Stewart pleas with each depositor to take only what they need, not every penny. But the first guy insists on closing his account. It’s his, he’s owed it, he demands it—and he gets it. The second person, a young Ellen Corby (Grandma Walton), meekly asks if ten dollars would be too much: crisis averted. Following her example, the rest of the mob settles for less than they’re owed, and the bank is saved.

Retirees believe (even if they know it’s not true) that there’s an account with their name on it, flush with cash that has been accruing over the decades they’ve worked. As far as they’re concerned, it’s theirs, they own it, and they demand it. For decades, their delusion was sustainable, especially with politicians repeating the lie year after year, decade after decade. We had a generation called the Baby Boom, working in an expanding economy, more than able to pay for retirees whose Golden Years lasted perhaps two decades or more. (Life expectancy in the early 30s, when Social Security was conceived and delivered, was either side of 60.)

But what would happen when those Boomers retired (all 3.8 per family of them), to be supported by the barely two children (or fewer) they had? Wasn’t anyone doing the math? Of course they were, but it was always someone else’s problem to solve. Social Security—just one of the entitlements—was the “third rail” of American politics, not to be touched by anyone who valued his political life.

And only one guy at Harvard had—has—the balls to say it. Just don’t tell anyone where you heard it.


Generation Screwed

Paul Ryan is popular with Gen X

GOP Congressman Paul Ryan—the tireless, wonky, 42-year-old workout freak—has made history by becoming the first member of our generation to join a presidential ticket. It should come as a surprise to no one that his calling card is reforming entitlements.

We hear incessantly about how members of today’s screwed generation face the prospect of less prosperous lives than those lived by their parents. But the maiden generation to stare down that gloomy prognosis was Generation X, the tiny slice of America born between about 1965 and 1980. (Ryan was born in 1970.) We were the first generation to be told we would never get Social Security or Medicare even though we would be forced to pay into these programs.

When many X-ers graduated from college, stocking shelves at the Gap was considered a career choice, as jobs were few and far between amidst a major economic downturn. I won’t bore you with the horror show of the low-paying and miserable jobs I had for the first three years after college.

Unfortunately, the future looks as bleak for today’s young people. No amount of coddling by their well-provided-for Boomer parents can save Generation Y and the Millennials from the dire economic conditions they face, including criminal levels of educational debt. Pensions have gone the way of the horse and buggy. You want to retire with health-care benefits, as both my professor parents did? Good luck. As the 1994 movie turned Gen-X mantra has it: Reality Bites.

Enter Ryan. While Democrats attack his Medicare plan as “radical” and portray him as pushing granny off the cliff, young people don’t seem to be buying this caricature. Or maybe “radical” is what they want.

A Zogby/JZ Analytics poll Tuesday showed increased support among voters 18-29 for the Romney ticket, which pollster John Zogby attributed to the Ryan pick. President Obama received just 49 percent of the youth vote, versus Romney’s 41 percent. (Obama took home 66 percent of the youth vote against McCain in 2008.)

That is very encouraging. Maybe the theory behind the choice of Paul Ryan is that he is charismatic enough to appeal to his generation, plus his views will encourage “bitter clingers” to engage, and he can help carry Wisconsin, Ohio and Pennsylvania. A girl can dream, can’t she?

- Aggie


Social Security Is “Cash Negative”.

Does that mean broke?

We’ll need Buck’s input, but I think that’s what it means.

Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went “cash negative.”

For most of its 75-year history, the program had paid its own way through a dedicated stream of payroll taxes, even generating huge surpluses for the past two decades. But in 2010, under the strain of a recession that caused tax revenue to plummet, the cost of benefits outstripped tax collections for the first time since the early 1980s.

Social Security, until now a huge lender to the government, will begin demanding repayment to its trust fund to cover the shortfall. If fully repaid, the trust fund can fully finance benefits until 2036, when people currently about 40 years old will begin to retire. Once the trust fund runs out, monthly benefits will decrease by about a quarter.

Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nation’s budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require an additional $105 billion. If the payroll tax break is expanded next year, as President Obama has proposed, Social Security will need an extra $267 billion to pay promised benefits.

But while talk about fixing the nation’s finances has grown more urgent, fixing Social Security has largely vanished from the conversation.

Lawmakers in both parties are ducking the issue, wary of agitating older voters and their advocates in Washington, who have long targeted politicians who try to tamper with federal retirement benefits. Democrats lost control of the House last year in part because seniors abandoned them in protest over Medicare cuts in Obama’s much-contested health-care act, and no one in Washington has forgotten that lesson.

In his February budget request, Obama ignored the Social Security blueprint put forth by his own bipartisan panel on debt reduction. During this summer’s debt-limit showdown, he endorsed the panel’s proposal to tie future benefits to a less-generous inflation index. But Obama took that idea off the table in September when he submitted recommendations to a special debt-reduction “supercommittee” now at work on Capitol Hill. Until recently, members of the supercommittee said, Social Security had rarely come up in their closed deliberations.

Profiles In Courage.

- Aggie

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Pow! Smash!! Bang!!!

Not Batman, Superman! (aka Rick Santelli) But he leaves Tom Friedman looking like The Penguin.

I meant to get to this earlier. I watched maybe five minutes of the debate before the FLOB (First Lady of Bloodthirstan) commandeered the TV to watch a chick flick. I actually liked Romney very much—but that worries me now that I think about it. He had answers for everything—that’s good—but I felt his going after Perry over Social Security was dishonest.

It is a Ponzi scheme now, without question. And an unsustainable one. We don’t have enough new workers (aka suckers or marks) to pay into the scheme in order to pay out to the swelling number of retirees. Perry should turn the tables and ask Romney et al how it isn’t a Ponzi scheme.

Oh sure, it can be fixed—but find me a politician not named Paul Ryan who has the gonads to try it.

Go ahead, I’ll wait.

you anna

That’s what I thought. You can means test, you can raise the age before qualifying, you can increase FICA taxes, you can cut payments—you’ll have to do all that and more to have a credible system—but you can’t do any of that and get reelected, at least not in this climate.

I salute Perry for trying—and shame on everyone else for their cowardice and dishonesty.

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