6/05/2009

The Coming Collapse of America: Understanding the scope of US entitlements

For those of you that love reading about the impending collapse of our great country, here is an article from Forbes about two weeks back that summarizes the findings of two Federally conducted audits of the outstanding liabilities for both Social Security and Medicare/Medicaid, each released in the past few weeks. The first report was prepared by the Social Security Administration, and the second by the Dept of Health and Human Services. I just want to make sure everyone is clear and fully informed about the reality of the situation before we proceed with these conversations.

I hate to tell everyone, but the conclusion of these non-partisan reports make it clear that nothing is impossible when it comes to the Federal government making promises it can keep. The only clever way to fix problems as big as these is to either cut liabilities (LOL) or radically increase taxes. To fully off-set the liablities acknowledged in these reports, every American's welfare contributions would have to be increased 81% every year forever.

To quote the Forbes piece:

To put it another way, the total unfunded indebtedness of Social Security and Medicare comes to $106.4 trillion. That is how much larger the nation's capital stock would have to be today, all of it owned by the Social Security and Medicare trust funds, to generate enough income to pay all the benefits that have been promised over and above future payroll taxes. But the nation's total private net worth is only $51.5 trillion, according to the Federal Reserve. In effect, we have promised the elderly benefits equal to more than twice the nation's total wealth on top of the payroll tax.
Of course, theoretically, benefits could be cut to prevent the necessity of a massive tax increase. But how likely is that? The percentage of the population that benefits from Social Security and Medicare is growing daily as the baby boom generation ages and longevity increases. And the elderly vote in the highest percentage of any age group, so their political influence is even greater than their numbers.

It is easy to dismiss Wikipedia, but these numbers are all too real and there is not a damn thing Obama has/will do about it because he doesn't really care about young Americans, he cares about getting elected and he knows damn well every stupid 20-30 year-old voter, even those with college educations, will probably vote for him no matter what he does for us because (a) its "cool", (b) none of my peers have any concept of BULL SHIT, or (c) everyone under 30 really doesn't care if their future is taken into consideration by policymakers.

Unless Obama does something to start correcting these shortfalls, yes you guessed it, we will continue to get f***ed by our parents even after they are long when the government they left us collapses under it's obligations. By that time, we can point fingers at nobody but ourselves because it seems unlikely we will do anything to help our own cause.

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