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Here's a recent column from Jim Jubak about how Medicare & Social Security payments now make up 60% of the Federal budget. He didn't mention this, but add in 10 percentage points for interest on the national debt, and that means 70% of the current Federal budget is already committed.
Jubak is no partisan hack. He's telling it like it is here:
The question is.....what do we do about it???? Doing nothing is not a viable option. Stopping the wars in Iraq and Afghanistan might be a good first step....but all by itself, does not even come close to solving the problems. We would have to do something on the order of getting rid of the entire military in order to keep SS & Medicare in their current forms....and only a lunatic fringe would go along with that.
Anyone have any ideas? I think these ideas need to be along the lines of "What am I willing to pay more for or give up?" as opposed to "What should the other guy pay more for or give up?"
I think we're going to have to have both major cuts in SS benefits, as well as major tax hikes if we want to avoid becoming a country like Argentina (which defaulted in its debt in 2002 and may do so again in the near future).
I also think as far as Medicare goes, we have to get serious about getting medical costs down. Changing our food policies would help. Take out the high fructose corn syrup out of food. Reform the school lunch programs for kids. Don't allow people to buy junk food with food stamps. Also, reform the way food is grown and cattle are raised....and watch health care costs come down as diabetes & heart disease go into retreat.
Honestly, I really don't think most Americans realize how dire our financial situation really is. And, sadly, I think they're more preoccupied with blaming each other than making the necessary sacrifices needed to get our financial house in order. In short, I fear the latest recession will look like child's play compared to what is coming. I hope I'm wrong. But it's going to take nothing short of heroic efforts on the part of the marjority of the American people to turn things around.
The obvious solution - abolish entitlement programs.
But that is political suicide.
The obscure solution - inform the people that participation (and obligation to pay for entitlements) is 100% voluntary.
Then when 51% "volunteer" out, the system will implode, without political blame attached.
I sure wish they had privatized Social Security a couple of years ago, so when the market crashed in October '09, all the retirees depending on SS would have had their monthly SS check cut in half, and would have to learn to live on half the amount they were accustomed to. That would have been great for the economy, too, with about 30 million consumers having zero spending money and evicted from their dwellings and selling their cars and belongings for almost nothing.
The "privatization" was only for a small portion of an individuals contribution and only for people under I think it was age 45. Current or near retirees would not have a thing to do with it. I don't think it was scheduled to start until 2010 anyway.
If it had started then it would have been an incredible deal for younger people, they could have dollar cost averaged into a down market and then when they are near retirement hopefully the bear would be over. Even if it weren’t having a small portion invested and drawn out over their lives would be a great deal.
I still prefer keeping control of my own money but that was a start.
BTW, you still haven’t said who my leaders are yet?
The problem with the deficit isn't Social Security and Medicare. It's the growth in the rest of the government's operations and the shortfall in income tax revenue to meet that spending. Expenditures for Social Security and Medicare grew by 161 billion dollars last year while the rest of the government spent over a trillion dollars more. Over 90% of the budget shortfall is being created by government operations including the military, homeland security, welfare, etc.
and then when they are near retirement hopefully the bear would be over.
Do you want the livelihoods of 30-million retirees to depend on your "hopefully"? Will you bet your own livelhood for the rest of your life on your "hopefully" about bull and bear markets, or just other people's money?
The problem with the deficit isn't Social Security and Medicare. It's the growth in the rest of the government's operations and the shortfall in income tax revenue to meet that spending. Expenditures for Social Security and Medicare grew by 161 billion dollars last year while the rest of the government spent over a trillion dollars more. Over 90% of the budget shortfall is being created by government operations including the military, homeland security, welfare, etc.
This is the kind of denial that is going to kill us.
As another poster mentioned, and I forgot to mention in my post, the costs of SS & Medicare are going to keep eating up a larger % of the budget with each passing year (also mentioned in the article if you had bothered to read it).
If nothing is done, within the next 20 years or so, we will reach a point where SS & Medicare will consume all Federal government spending, even if we got rid of every other program. This is no joke, no exaggeration.
Do you want the livelihoods of 30-million retirees to depend on your "hopefully"? Will you bet your own livelhood for the rest of your life on your "hopefully" about bull and bear markets, or just other people's money?
At this point, I don't think it's going to matter. We're going to go bankrupt trying to pay for these programs as a result of mass denial.
At this point, I don't think it's going to matter. We're going to go bankrupt trying to pay for these programs as a result of mass denial.
Do you understand the concept of 'bankruptcy'? You can't go bankrupt if all you do is circulate the wealth that is in your own economy.
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