New scapegoat for deficit: retirees!

[BAllen]

Yes, it's all their fault. They're sucking the system dry. As usual, they miss the mark.

http://money.msn.com/now/post.aspx?post=8c4e2d12-debd-4e0d-b6a5-bf2505b1543e

 

[Zippyjuan]

It is correct. It is discussing that FUTURE expenses of baby boomers retiring will consume more and more of the budget. The other big ticket item is the Department of Defense. Both must be included in budget considerations.

You could cut every single item in the budget to zero but if you keep spending where you are now on just these two categories you still cannot have a balanced budget. Leave just Social Security and Medicare/ Medicaid alone (plus interest on the debt) and if you cut everything INCLUDING ALL Defense spending THEN you can balance your budget (assuming you don't change any taxes). Without addressing the retiree issue, the budget problems cannot be solved.

From the article:

One of the worrying trends he cited is a surge in government spending on programs for the elderly, even as the first baby boomers are just hitting retirement age.

But a tidal wave of retiring boomers is about to hit the U.S. Roughly 10,000 will reach the retirement age of 65 each day through the two decades, according to the Pew Research Center. By 2030, 18% of the country will be senior citizens.

Demand for entitlements is already on the rise: Social Security, Medicaid and Medicare made up 44% of the government's $3.7 trillion in spending in 2011, a jump up from 34% in 1990, Bloomberg said, citing the U.S. Bureau of Economic Analysis.

 

[BAllen]

No, you eliminate entire departments, as Ron Paul suggested.

 

[Acala]

No, you eliminate entire departments, as Ron Paul suggested.

As it is right NOW, you could eliminate EVERY department other than defense, SS, and medicare/medicaid and still run a deficit every year. And that is before the boomers retire. AND just reducing the rate of INCREASE in spending cause a political firestorm. We are screwed.

 

[Zippyjuan]

No, you eliminate entire departments, as Ron Paul suggested.

Here is the budget for 2010. I can't find as good of a budget breakdown for more recent years but it is a good example. The deficit for 2010 was $1.3 trillion. Try to reduce spending by that amount and not touch things like Social Security/ Medicaid and Defense Spending. It can't be done. The other "entire departments" aren't big enough. Even if you got rid of ALL of them. Cut every department in this chart aside from DOD to zero and you still have over $600 billion deficit added to to the debt every year.

http://en.wikipedia.org/wiki/2010_United_States_federal_budget

Mandatory spending: $2.173 trillion (+14.9%)

$695 billion (+4.9%) – Social Security
$571 billion (+58.6%) – Unemployment/Welfare/Other mandatory spending
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt


Discretionary spending: $1.378 trillion (+13.8%)

$663.7 billion (+12.7%) – Department of Defense (including Overseas Contingency Operations)
$78.7 billion (−1.7%) – Department of Health and Human Services
$72.5 billion (+2.8%) – Department of Transportation
$52.5 billion (+10.3%) – Department of Veterans Affairs
$51.7 billion (+40.9%) – Department of State and Other International Programs
$47.5 billion (+18.5%) – Department of Housing and Urban Development
$46.7 billion (+12.8%) – Department of Education
$42.7 billion (+1.2%) – Department of Homeland Security
$26.3 billion (−0.4%) – Department of Energy
$26.0 billion (+8.8%) – Department of Agriculture
$23.9 billion (−6.3%) – Department of Justice
$18.7 billion (+5.1%) – National Aeronautics and Space Administration
$13.8 billion (+48.4%) – Department of Commerce
$13.3 billion (+4.7%) – Department of Labor
$13.3 billion (+4.7%) – Department of the Treasury
$12.0 billion (+6.2%) – Department of the Interior
$10.5 billion (+34.6%) – Environmental Protection Agency
$9.7 billion (+10.2%) – Social Security Administration
$7.0 billion (+1.4%) – National Science Foundation
$5.1 billion (−3.8%) – Corps of Engineers
$5.0 billion (+100%-NA) – National Infrastructure Bank
$1.1 billion (+22.2%) – Corporation for National and Community Service
$0.7 billion (0.0%) – Small Business Administration
$0.6 billion (−14.3%) – General Services Administration
$0 billion (−100%-NA) – Troubled Asset Relief Program (TARP)
$0 billion (−100%-NA) – Financial stabilization efforts
$11 billion (+275%-NA) – Potential disaster costs
$19.8 billion (+3.7%) – Other Agencies
$105 billion – Other

Ron Paul's budget wanted to take spending back to 2006 levels. That would mean about a 50% cut in defense spending along with his other cuts.

His Social Security "opt out" plan would have increased the deficit short term- Social Security expenditures come from this year's revenues. If you let people "opt out" from paying in, that reduces the money coming in without changing the money going out. That money has to come from someplace- other cuts or higher taxes or more borrowing. In the long run, as those "opting out" start to retire (which could be 30 years from now), THEN you would start to see savings on the budget.

 

[kathy88]

Let's just say for conversation's sake that a couple big departments were eliminated. How much fun would it be to watch the government tit suckers try to survive in the real world?

 

[amy31416]

Let's just say for conversation's sake that a couple big departments were eliminated. How much fun would it be to watch the government tit suckers try to survive in the real world?

Considering that we'd be the ones they're looting, not much.

 

[jbauer]

Let's just say for conversation's sake that a couple big departments were eliminated. How much fun would it be to watch the government tit suckers try to survive in the real world?

Well...they'd probably send in government "guidance" counselors to show them how to sign up for all the freebees.

 

[jt8025]

I looked into this once and the "Other Mandatory Spending" is not mandatory in my opinion. It included things like food stamps.

Looks like you are right though. SS, Medicare, Medicaid, Interest & DOD is over revenues.

 

[BAllen]

Aren't the retirees drawing money they paid in? And how much of that ss is for disabled people who are not really disabled? Seems to have increased in recent years.

 

[seraphson]

Aren't the retirees drawing money they paid in? And how much of that ss is for disabled people who are not really disabled? Seems to have increased in recent years.

Nope. What they get is what people are willing to pay in right here, right now. I believe SS has actually been paying out more than it's collecting for a few years now so I'm assuming they're borrowing to cover the difference. This is the problem though, the perpetuating of the illusion that the money is actually there, that there's some fantasy pristine bank with a locker containing a wheel barrel full of cash you "put in" (aka taken from you with the threat of violence, don't believe me? See what happens when you try not paying SS tax) plus interest. In the future I see them possibly raising SS tax and absolutely giving payments a haircut.

 

[BAllen]

Nope. What they get is what people are willing to pay in right here, right now. I believe SS has actually been paying out more than it's collecting for a few years now so I'm assuming they're borrowing to cover the difference. This is the problem though, the perpetuating of the illusion that the money is actually there, that there's some fantasy pristine bank with a locker containing a wheel barrel full of cash you "put in" (aka taken from you with the threat of violence, don't believe me? See what happens when you try not paying SS tax) plus interest. In the future I see them possibly raising SS tax and absolutely giving payments a haircut.

The money that was allocated for it, is being spent on other things like disability, is it not?

 

[Acala]

The money that was allocated for it, is being spent on other things like disability, is it not?

Social Security was ALWAYS a pay-as-you-go system. It was never the kind of retirement system you find in the private sector where people pay into an account, the money is invested, and then benefits paid out of the same account. It was a transfer scheme pretending to be a retirement plan. The beneficiaries have no contractual rights to anything and the system could be defunded tomorrow.

As a consequence of a number of factors, population growth being the most important, money coming into SS outstripped benefit payments for decades. The surplus was put into a slush fund. Decades back, government decided that the SS slush fund would be a good place to borrow money, so they did. all of it. Gone. Replaced with government IOU's.

Now, SS payments in are not covering payments out. That trend is expected to ramp up as baby boomers retire. The pretend surplus that isn't really there will cover the difference for a decade or so and then the thing goes belly up.

All ponzi schemes depend on an ever-expanding base of suckers to keep the thing going. SS was able to last much longer than non-government scams because it could force people at gunpoint into the system But you can't force people to have more babies to pay into the system, so the scam is unraveling anyway.

 

[JK/SEA]

has anyone factored in those that die BEFORE they reach Social Security age?...just in my circle, i know at least 6 people who died before they even reached 60....

 

[heavenlyboy34]

Social Security was ALWAYS a pay-as-you-go system. It was never the kind of retirement system you find in the private sector where people pay into an account, the money is invested, and then benefits paid out of the same account. It was a transfer scheme pretending to be a retirement plan. The beneficiaries have no contractual rights to anything and the system could be defunded tomorrow.

As a consequence of a number of factors, population growth being the most important, money coming into SS outstripped benefit payments for decades. The surplus was put into a slush fund. Decades back, government decided that the SS slush fund would be a good place to borrow money, so they did. all of it. Gone. Replaced with government IOU's.

Now, SS payments in are not covering payments out. That trend is expected to ramp up as baby boomers retire. The pretend surplus that isn't really there will cover the difference for a decade or so and then the thing goes belly up.

All ponzi schemes depend on an ever-expanding base of suckers to keep the thing going. SS was able to last much longer than non-government scams because it could force people at gunpoint into the system But you can't force people to have more babies to pay into the system, so the scam is unraveling anyway.

This^^ excellent and concise summary, sir.

 

[BAllen]

Social Security was ALWAYS a pay-as-you-go system. It was never the kind of retirement system you find in the private sector where people pay into an account, the money is invested, and then benefits paid out of the same account. It was a transfer scheme pretending to be a retirement plan. The beneficiaries have no contractual rights to anything and the system could be defunded tomorrow.

As a consequence of a number of factors, population growth being the most important, money coming into SS outstripped benefit payments for decades. The surplus was put into a slush fund. Decades back, government decided that the SS slush fund would be a good place to borrow money, so they did. all of it. Gone. Replaced with government IOU's.

Now, SS payments in are not covering payments out. That trend is expected to ramp up as baby boomers retire. The pretend surplus that isn't really there will cover the difference for a decade or so and then the thing goes belly up.

All ponzi schemes depend on an ever-expanding base of suckers to keep the thing going. SS was able to last much longer than non-government scams because it could force people at gunpoint into the system But you can't force people to have more babies to pay into the system, so the scam is unraveling anyway.

That must be one reason Reps. support immigration so much. More suckers for the ponzi scheme. I knew they didn't give a shit about the immigrants like they say they do.

 

[lx43]

Let's just say for conversation's sake that a couple big departments were eliminated. How much fun would it be to watch the government tit suckers try to survive in the real world?

Id love to see a laundry list of federal agencies shut down.

 

[lx43]

Social Security was ALWAYS a pay-as-you-go system. It was never the kind of retirement system you find in the private sector where people pay into an account, the money is invested, and then benefits paid out of the same account. It was a transfer scheme pretending to be a retirement plan. The beneficiaries have no contractual rights to anything and the system could be defunded tomorrow.

As a consequence of a number of factors, population growth being the most important, money coming into SS outstripped benefit payments for decades. The surplus was put into a slush fund. Decades back, government decided that the SS slush fund would be a good place to borrow money, so they did. all of it. Gone. Replaced with government IOU's.

Now, SS payments in are not covering payments out. That trend is expected to ramp up as baby boomers retire. The pretend surplus that isn't really there will cover the difference for a decade or so and then the thing goes belly up.

All ponzi schemes depend on an ever-expanding base of suckers to keep the thing going. SS was able to last much longer than non-government scams because it could force people at gunpoint into the system But you can't force people to have more babies to pay into the system, so the scam is unraveling anyway.

Another thing to consider is beneficiary collect 3 to 4 times what they put into the system today. Some live 30 years or more off the benefits

 

[Brian4Liberty]

That must be one reason Reps. support immigration so much. More suckers for the ponzi scheme. I knew they didn't give a shit about the immigrants like they say they do.

One of several reasons. Keep the pyramid scheme going, and another is to reduce wages (to cover up monetary inflation).

 

[Brian4Liberty]

Solution step one:

Repeal Medicare Part D, and repeal all laws that restrict manufacturing, distribution and sales of all drugs. Fraud laws remain in place to ensure content and purity of drugs.