CONTRA NEWS AND VIEWS, STOCKMAN’S BEST OF THE WEEK
The Long-Range Social Security/Medicare Deficit: $72 Trillion And Counting
by Forbes • August 11, 2015
By John C. Goodman for Forbes
*** begin quote ***
The Social Security/Medicare Trustees have issued their latest reports and they are not easy reading for the uninitiated. I suspect most of the Trustees hope you don’t read them at all. They prefer their own spin. Under both Republican and Democratic administrations, these reports are invariably accompanied by a press release that completely ignores what is important and focuses instead on what is unimportant.
What’s unimportant? The trust funds and when they will run dry. Like most social security systems in the world today, ours is a pay-as-you-go system. Nothing has been saved or invested. What we call trust funds consist of nothing more than IOUs the government has written to itself. (More on that below.) Yet, that is what the official press releases emphasize and this focus is reflected in the first graph below.
What’s important? Cash flow. In fact, in a pay-as-you-go system, cash flow is the only thing that matters. As the second graph shows, Social Security and Medicare are paying out more than they are taking in. As the baby boomers retire, the total deficit will grow dramatically. Currently, we are using about one in every seven general revenue dollars to cover these deficits. By 2020, we will need more than one in five. By 2030, we will need about one in three.
*** end quote ***
Like most Ponzi schemes, eventually the suckers’ money runs out.
And, all the politicians and bureaucrats from FDR are going to be long gone.
So what should be done about this and ALL the unfunded liabilities?
At the very least, everyone should REALIZE that the current system is unsustainable.
Even a fat old white guy injineer or a reasonably competent accountant can demonstrate that there ain’t no free lunch.
- Old advice: “when in a hole, stop digging” seems to apply here.
- Hard stop on all new “pensions”. Require all such to be fully funded!
- All plans must “mark to market” with honest accounting.
- “Chile” style social security reform
- Congress must live within what the taxpayers can afford
- Any deficit is paid for my Congress folks personally
Stockman’s Corner
STOCKMAN’S CORNER
Chart Of The Day: Mr. Deng’s Drastic Yuan Devaluation And The Long Mercantilist Peg Which Followed
by David Stockman • August 15, 2015
STOCKMAN’S CORNER
Chart Of The Day: The Tesla ‘Cash Burn’ Inferno
by David Stockman • August 13, 2015
STOCKMAN’S BEST OF THE WEEK,STOCKMAN’S CORNER
CNBC’s Alfred E. Neuman Luncheon Club—–Beyond Clueless
by David Stockman • August 13, 2015
CONTRA NEWS AND VIEWS,STOCKMAN’S BEST OF THE WEEK
China’s Beggar The World Deflation——Global Steel Industry Getting Hammered By Its Steel Dumping
by Ambrose Evans-Pritchard at The Telegraph • August 12, 2015
PATER TENEBRARUM,STOCKMAN’S BEST OF THE WEEK
The True Cause Of Greece’s Economic Failure——An Omnivorous State, Not Lazy Workers
by Pater Tenebrarum • August 12, 2015
Stockman’s Corner Media
AUDIO AND VIDEO, STOCKMAN’S BEST OF THE WEEK
Reagan OMB Head: Fed Fueling Ill-Gotten Gains
by David Stockman • January 30, 2015
AUDIO AND VIDEO, CONTRA CLUB,STOCKMAN’S BEST OF THE WEEK
Stephen Roach Nails It Again: Fed Is In Total Denial, Replicating Same “Deadly Trap” As Last Time
by ZeroHedge • January 9, 2015
AUDIO AND VIDEO, STOCKMAN’S BEST OF THE WEEK, STOCKMAN’S CORNER
David Stockman Interview: The Case For Super Glass-Steagall
by David Stockman • December 21, 2014
AUDIO AND VIDEO, STOCKMAN’S BEST OF THE WEEK, STOCKMAN’S CORNER
David Stockman Talks Historical Dominoes—–Rise Of the Warfare State And Keynesian Central Banking
by David Stockman • December 15, 2014
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