Is Medicare Sustainable?
At 80, I am a “poster boy” for what is wrong with Medicare and Social Security. I worked full time from 1950 until 1993, when I retired. I paid the maximum amount annually required by law. My payment from Social Security in 1993 was $1,170 per month, and it now exceeds $1,500. I paid $47,377 into the fund and have so far received more than $288,000 from it. As for Medicare I paid $14,350 into the fund from 1966 to 1993. I have been very healthy but had cancer several years ago and a craniotomy five years ago. The costs of those exceeded $1 million. Even minor surgery would far exceed what I paid to the fund. Please tell me how such a system can be sustained. Both programs need to be overhauled now. No one should believe that he has paid for and earned the right to such payments.
Posted on August 8, 2011 Posted to Cato@Liberty
Ron Paul in Iowa
If Paul finishes first or second, the political community will shrug: There he goes again, the Babe Ruth of straw polls.Well, maybe they will. But they shouldn't. Because in fact, Ron Paul finished fifth in the 2007 Iowa Straw Poll. So if he finishes first or second or even third this year, it will in fact signal a major increase in his ability to reach and turn out voters. That might be because he's making a far more intense effort to actually organize in Iowa than he did in 2007-8. Or it might be because, as Will did acknowledge, "events seem to be validating his message, which is that the country’s financial condition is awful." But it won't be something to shrug at. Of course, it also won't put him on a straight line to the nomination. In 2007 Mike Huckabee won the Iowa Straw Poll, and John McCain finished tenth.
Posted on August 7, 2011 Posted to Cato@Liberty
Stop the Hate
If there is anything The New York Times hates, it is hate.... But as it turns out, there is one thing The New York Times hates more than hate itself: the tea-party wing of the GOP. "Tea Party Republicans have waged jihad on the American people," fumes columnist Joe Nocera in his Tuesday column, "Tea Party's War on America." Has the GOP "gone insane? … Why yes, it has," writes Krugman several days before, going on to denounce the party's "fanaticism" and lack of rationality: "It has gone off the deep end," he concludes. The editorial board agrees, terming the tea-partiers an "ultraorthodox" and "extremist" group who "are not paying close attention to reality," who are "willing to endanger the national interest" and who show no "signs of intelligent life." To Thomas Friedman, the tea-partiers are the "Hezbollah faction" of the GOP. According to Maureen Dowd, "The maniacal Tea Party freshmen are trying to burn down the House." They are "adamantine nihilists," and "political suicide bombers."... What could possibly explain all of this "vitriolic rhetoric" — this "widespread squall of fear, anger, and intolerance" — this "gale of anger"? Not the budget deal alone. While it's true that progressives did not get the tax hikes they wanted, it's also true that the federal budget will continue to grow, year over year. The deal gives President Obama an immediate hike in the debt ceiling, in return for mere promises of a reduction in the rate of spending growth later. Hmmmm. Perhaps Paul Krugman can explain what has elicited this drumbeat of hate and vituperation. [Shuffle of papers. . . .] Ah, yes — here's what Krugman wrote seven years ago, in "Feel the Hate": Why are [they] so angry? One reason is that they have nothing positive to run on. . . . But the vitriol also reflects the fact that many of [those] people . . . for all their flag-waving, hate America. They want a controlled, monolithic society; they fear and loathe our nation's freedom, diversity and complexity." Krugman was writing about the 2004 GOP convention. Funny how resonant those words sound today.When the vice president of the United States calls his political opponents "terrorists," when the president of the United States calls them "hostage takers," when prominent media pundits call those same people extortionists and suicide bombers who are willing to destroy the country -- isn't that the sort of hateful language that we've often been told could lead to violence? As Hinkle notes, when one disturbed young man in Arizona went on a killing spree, the New York Times knew whom to blame:
"It is legitimate to hold Republicans and particularly their most virulent supporters in the media responsible for the gale of anger" that set the nation "on edge," the anti-hate paper said.Isn't it time for a return to civility by those who so often lecture their opponents on civility?
Posted on August 3, 2011 Posted to Cato@Liberty
Debt Deals and the Default Myth
The establishment media have been waving around the word “default” like a bloody shirt, trying desperately to pressure the Tea Party Republicans to give in and raise the debt ceiling already. Both theNew York Times and the Washington Post on Sunday had “default” in the first sentence on the front page. Saturday’s Post featured “default” in the first line on its homepage, in the first sentence on page 1, in the first economy/business story, and on page 1 of the Real Estate section. Friday’s CBS Evening News began, “Tonight, we are almost out of time. That was President Obama’s warning as Congress groped for a way to avoid a government default.” But there will be no default.As a couple of graphs show, the problem is out-of-control spending and debt.
I talked to a journalist on Thursday who was very concerned about the “dysfunction” in Washington. So am I. But I told her that the real problem is not the dysfunctional process that’s getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.So will there be any budget cuts? All the deals being discussed in recent days
promise to cut spending some day—not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, ”Jam to-morrow and jam yesterday—but never jam to-day.” Cuts tomorrow and cuts in the out-years—but never cuts today.Read it all.
Posted on August 1, 2011 Posted to Cato@Liberty
Debt Deals and the Default Myth
The establishment media have been waving around the word “default” like a bloody shirt, trying desperately to pressure the Tea Party Republicans to give in and raise the debt ceiling already. Both theNew York Times and the Washington Post on Sunday had “default” in the first sentence on the front page. Saturday’s Post featured “default” in the first line on its homepage, in the first sentence on page 1, in the first economy/business story, and on page 1 of the Real Estate section. Friday’s CBS Evening News began, “Tonight, we are almost out of time. That was President Obama’s warning as Congress groped for a way to avoid a government default.” But there will be no default.As a couple of graphs show, the problem is out-of-control spending and debt.
I talked to a journalist on Thursday who was very concerned about the “dysfunction” in Washington. So am I. But I told her that the real problem is not the dysfunctional process that’s getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.So will there be any budget cuts? All the deals being discussed in recent days
promise to cut spending some day—not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, ”Jam to-morrow and jam yesterday—but never jam to-day.” Cuts tomorrow and cuts in the out-years—but never cuts today.Read it all.
Posted on August 1, 2011 Posted to Cato@Liberty
Dysfunction, Default, and the Debt Ceiling Crisis
The establishment media have been waving around the word "default" like a bloody shirt, trying desperately to pressure the Tea Party Republicans to give in and raise the debt ceiling already. Both the New York Times and the Washington Post on Sunday had "default" in the first sentence on the front page. Saturday's Post featured "default" in the first line on its homepage, in the first sentence on page 1, in the first economy/business story, and on page 1 of the Real Estate section. Friday's CBS Evening News began, "Tonight, we are almost out of time. That was President Obama's warning as Congress groped for a way to avoid a government default."
But there will be no default.
As I wrote this column, it seemed entirely possible that Congress and the president would fail to raise the U.S. debt ceiling by the quasi-deadline of Tuesday, August 2. If in fact they don't pass a bill by then — or by August 9 or so, when the real crunch might come — then the federal government would be forbidden to borrow any more money beyond the legal limit of $14.3 trillion. But it would still have enough money to pay its creditors as bonds come due. The government expects to take in about $172 billion in August, but it wants to spend $307 billion. You see the problem. If it can't borrow another $135 billion — to cover its bills for one month — then it will have to make cuts somewhere. The New York Times reports, "The Bipartisan Policy Center analysis notes that if the government were to choose to pay the interest on its debt, Social Security benefits, Medicaid and Medicare payments, defense contractors and unemployment benefits, it could not have enough left to pay for the salaries of federal workers and members of the military, Pell grants for college, highway construction or tax refunds, among other things. " But it will not default on the debt, as the Washington Post notes:
,The Treasury has already decided to save enough cash to cover $29 billion in interest to bondholders, a bill that comes due Aug. 15, according to people familiar with the matter.
Which makes it unfortunate that the online headline for that article is "Treasury making hard choices in case of default." True, "Treasury making hard choices in case of failure to raise debt ceiling" would take up more space, but it would be more accurate.
I talked to a journalist on Thursday who was very concerned about the "dysfunction" in Washington. So am I. But I told her that the real problem is not the dysfunctional process that's getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.
We've become so used to these unfathomable levels of deficits and debt — and to the once-rare concept of trillions of dollars — that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was "only" $1 trillion. Now, just 30 years later, it's headed for $15 trillion by the end of the year. So here's a graphic representation of dysfunction:
Those are the kind of numbers that caused the Tea Party movement and the Republican victories of 2010. And many Tea Partiers this week have been reminding their representatives that they were sent to Washington to fix this problem. That's why, for once, there's a real argument over raising the debt ceiling. It's going to get raised, but many of the Republican freshmen are determined to set a new course for federal spending in the same bill that authorizes another $2.4 trillion or so of borrowing.
And where did all this debt come from? As the Tea Partiers know, it came from the rapid increase in federal spending over the past decade:
Annual federal spending rose by a trillion dollars when Republicans controlled the government from 2001 to 2007. It has risen another trillion during the Bush-Obama response to the financial crisis. So spending every year is now twice what it was when Bill Clinton left office 10 years ago, and the national debt is almost three times as high. Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate. And yet many voters, especially Tea Partiers, know that both parties have been responsible. Most Republicans, including today's House leaders, voted for the No Child Left Behind Act, the Iraq war, the prescription drug entitlement, and the TARP bailout during the Bush years. That's why fiscal conservatives are looking very closely at the bills being proposed, most of which promise to cut spending some day — not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, "Jam to-morrow and jam yesterday — but never jam to-day." Cuts tomorrow and cuts in the out-years — but never cuts today.
If the "dysfunctional" fight that has sent the establishment into hysterics finally results in some constraint on out-of-control spending, then it will have been well worth all the hand-wringing headlines. The problem is not a temporary mess on Capitol Hill and not a mythical default, it's spending, deficits, and debt.
Posted on August 1, 2011 Posted to Cato@Liberty
RSS