Archive | July, 2011

River cruise stimulus package

31 Jul

I recently received an advertisement for a river cruise from Amsterdam to Brussels. It piqued my interest so I called for more information. There were six different dates for the spring of 2012. As I began asking questions, the representative informed me there were no openings, but they were adding a trip in late June because of demand. Not only were all the trips booked, but each had a waiting list of twenty or more people. These trips cater mostly to us senior citizens, you know the ones on Social Security and Medicare, the folks politicians view as poor and in need of higher benefits. We are the folks who get discounts on everything from deli sandwiches to movie tickets and bus fares.

I called another travel company. Could this be a trend? It was the same story, most cabins were booked, some trips were sold out ten months in advance.

And did I mention a couple pays about $15,000 for the trip. This is all anecdotal I admit, or did I miss a river cruise stimulus package?

Who benefits from the Bush tax rates?

30 Jul

I was under the impression as perhaps were you that the major beneficiaries of the Bush tax rates were the wealthy. That is certainly the impression created during the political wrangling over their extension last year. However,
about four-fifths of the cuts go to households making less than $250,000 a year,imagine that.

Why are Social Security benefits taxable?

29 Jul
Brochure from 1961 with basic advice about Soc...

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If as many people believe, they paid for their Social Security, they earned the benefit, they are entitled, why is Social Security subject to income tax? After all, no money you save (other than pre-tax) is subject to income tax when you take it from the bank.

According to the Social Security website:

Originally, Social Security benefits were not taxable income. This was not, however, a provision of the law, nor anything that President Roosevelt did or could have “promised.” It was the result of a series of administrative rulings issued by the Treasury Department in the early years of the program.

In 1983 Congress changed the law by specifically authorizing the taxation of Social Security benefits. This was part of the 1983 Amendments, and this law overrode the earlier administrative rulings from the Treasury Department.

Of course the fact is we have not paid for our own Social Security, we paid a tax that was and still is inadequate to provide promised benefits. To be truly accurate, Social Security should be exempt from taxation up to the point our benefit payments do not exceed the total we contributed during our working lives. Beyond that it should be fully taxable just as any pension paid for by someone else is taxable as ordinary income.

Instead we have a system that excludes certain individuals from paying any taxes and taxes up to 85% of the Social Security benefit based on total income.

Here is how it works:

IRS Tax Tip 2011-26, February 07, 2011

The Social Security benefits you received in 2010 may be taxable. You should receive a Form SSA-1099 which will show the total amount of your benefits. The information provided on this statement along with the following seven facts from the IRS will help you determine whether or not your benefits are taxable.

How much – if any – of your Social Security benefits are taxable depends on your total income and marital status.

Generally, if Social Security benefits were your only income for 2010, your benefits are not taxable and you probably do not need to file a federal income tax return.

If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status.

Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet.

You can do the following quick computation to determine whether some of your benefits may be taxable:

• First, add one-half of the total Social Security benefits you received to all your other income, including any tax exempt interest and other exclusions from income.
• Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

The 2010 base amounts are:

• $32,000 for married couples filing jointly.
• $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year.
• $0 for married persons filing separately who lived together during the year.

For additional information on the taxability of Social Security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available on this website or by calling ().

Social Security payments would fall with new inflation gauge

27 Jul
Roosevelt Signs The Social Security Act: Presi...

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The title of this article is from a headline in the July 26,2011 issue of USA Today. If you are receiving Social Security or close to doing so, it sure grabs your attention. Yikes, my monthly income is going down?

What the article is really saying is that future increases in benefits may be slightly lower than if the current inflation formula is used. So the headline should more accurately read:

“Social Security payments would increase at a slightly lower rate with new inflation gauge.”

Of course, such a statement would not grab your attention, scare seasoned citizens or be consistent with the political views of the mainstream press.

The change in the inflation calculation is called chained inflation CPI.  So, how much of a hit to Social Security benefits are we talking about? According to the article the change would mean 0.3% less of an increase in payment. That is three tenths of one percent.

In June 2011 the average Social Security monthly payment was $1,079. Let’s do some math. If benefits were to increase by 3% each year for ten years the benefit would go from $1,079 to $1450.09.   However, if the new formula is used, the benefit after ten years would be $41.67 less than the current formula or $1408.40 (rounding). Looking at it another way, in the first year of the new formula the monthly increase is $3.24 less than an increase under the current formula. The benefit still increases, just not as much. Clearly the payment did not fall.

There is more to the story. The theory behind the new formula is that people adjust their buying for inflation. As the USA article illustrates, if the price of beef increases people will buy less beef perhaps turning to chicken thereby compensating for the higher inflation associated with beef. The new Social Security inflation factor would then track the price of chicken not beef.

The inflation formula used to calculate the Social Security COLA has been questioned for many years. In general it tends to overstate the impact on seniors of some items they are less likely to be purchasing once retired. Adjusting the formula as a relatively painless way of stabilizing Social Security has been suggested in the past.

Needless to say politicians on the left see this as pinching the elderly and one has to assume the AARP is not thrilled either. However, a difference of a few dollars over a decade seems a small price to pay to save hundreds of billions of dollars for the rest of Americans.

Since 1975, Social Security general benefit increases have been cost-of-living adjustments or COLAs. The 1975-82 COLAs were effective with Social Security benefits payable for June in each of those years; thereafter COLAs have been effective with benefits payable for December.

Prior to 1975, Social Security benefit increases were set by legislation.

And there you have the essence of the problem. Rather than increasing benefits by legislation when affordable, Congress in its wisdom fixed a problem and set the COLA on automatic without regard to future changing economic or fiscal conditions. Today making a reasonable adjustment to this process is attacked as lowering Social Security benefits.  COLAs are common in government pensions and as with Social Security they have created fiscal problems for the states.  NJ just suspended COLAs until the pension trust reaches a funding status target. I managed a corporate pension plan for decades and over that time we granted seven increases in pensions, each time following a detailed analysis of the economics of the company, past inflation, the additional liability that would be created and the additional funding required.  Many times a COLA proposal was rejected.  That is the difference between accountability and political decision-making.


Place your bet on the deficit

26 Jul

Think about the debate and political wrangling in Washington. They are all fighting over raising the debt limit. I say again, raising the debt of the US to some number above $14 trillion. Hey, that’s no big deal it’s only debt and as soon as we raise the limit we will keep adding to it. Does anyone wonder how long this can go on?

Look at these facts from an opinion piece by David Brooks in the Wall Street Journal:

Consider a few facts. The Bureau of Economic Analysis tells us that total government spending at all levels has risen to 37% of gross domestic product today from 27% in 1960—and is set to reach 50% by 2038. The Tax Foundation reports that between 1986 and 2008, the share of federal income taxes paid by the top 5% of earners has risen to 59% from 43%. Between 1986 and 2009, the percentage of Americans who pay zero or negative federal income taxes has increased to 51% from 18.5%. And all this is accompanied by an increase in our national debt to 100% of GDP today from 42% in 1980.

Does all this sound like we are heading in the right direction? 

You could take the view of Paul Krugman and say we haven’t spent enough, you could take the position of Ron Paul and say default now and avoid bigger problems down the road. You could take the view of liberals, raise taxes and go merrily on our way (for now) or we can add classes in chopstick use to school curriculum and attempt to acquire a taste for curry.

Thomas Jefferson was no stranger to accumulating debt and Alexander Hamilton was for a strong central bank but I suspect they are both spinning now at the extremes we have reached.

One side of this debate is right and the other wrong.  Place your bet… with your future. Do you know where your savings bonds are?

More services, tests and counseling recommended to be reimbursed by health “insurance” at 100% by Institute of Medicine

25 Jul

The Patient Protection Affordable Care Act requires that many services classified as preventative be covered at 100% with no deductible or co-payment. While it is up to HHS to determine which services are to be covered in this manner, HHS relies on the Institute of Medicine and several other organizations to make ongoing recommendations of services, etc. for reimbursement at 100% by health insurers and employer self-insured plans.

This expansion of services covered at 100% seems curious given that in the realm of Medicare new studies say the lack of cost sharing by Medicare beneficiaries (you can’t prove that by me) encourages over-utilization.

In addition, it has long been known for years that mandates for health insurance coverage at the state level have driven up premiums from 15% to as much as 25% over the years. The PPACA is now doing the same thing in the name of prevention (and with the nebulous assumption that covering such services at 100% will lead to lower costs sometime in the future).

Health “insurance” is rapidly becoming a misnomer. There is no insurance when you determine when to incur the expense and you have, in effect, no financial risk.

Many employers voluntarily voided their grandfathering status under PPACA thus subjecting themselves to these preventive and other requirements. More than that, they lost all control over what new services will be added to their programs without employee cost-sharing, something that is counter to years of cost management strategies.

The objective of all this, of course, is not to drive up costs and if you ask the IOM I venture to say they are trying to improve health care and health in general. They identify gaps in coverage, but does filling those gaps require an employer or insurer to carry the full cost and the patient none (not entirely true, the hidden cost will be higher premiums).

Somehow we have developed the mindset that unless someone else is paying, no health care no matter how routine or inexpensive is our responsibility.

Among the new services recommended for 100% coverage are:

  1. counseling on sexually transmitted infections,
  2. counseling and screening for HIV,
  3. contraceptive methods and counseling to prevent unintended pregnancies,
  4. lactation counseling and equipment to promote breast-feeding,
  5. screening and counseling to detect and prevent interpersonal and domestic violence,
  6. yearly well-woman preventive care visits to obtain recommended preventive services.

Call me stupid if you will, but I thought everyone knew what “equipment” was involved in breast-feeding. And as for preventing unintended pregnancy, perhaps the elimination of unintended sex would help. What qualified obstetrician does not now screen his or her patient for diabetes during pregnancy and why would it need separate treatment as a covered medial expense? The concept of preventive care and its relationship to health “insurance” has run amuck.

I can see it all now, new businesses will abound: “Counseling Available – You Pick the Topic (as long as it is covered at 100%) Call Your Insurer Today”

Here is the full text of the Institute of Medicine press release.

July 19, 2011


WASHINGTON — A new report from the Institute of Medicine (IOM) recommends that eight preventive health services for women be added to the services that health plans will cover at no cost to patients under the Patient Protection and Affordable Care Act of 2010 (ACA). The ACA requires plans to cover the services listed in the U.S. Department of Health and Human Services’ (HHS) comprehensive list of preventive services. At the agency’s request, an IOM committee identified critical gaps in preventive services for women as well as measures that will further ensure women’s health and well-being.

The recommendations are based on a review of existing guidelines and an assessment of the evidence on the effectiveness of different preventive services. The committee identified diseases and conditions that are more common or more serious in women than in men or for which women experience different outcomes or benefit from different interventions. The report suggests the following additional services:

• screening for gestational diabetes
• human papillomavirus (HPV) testing as part of cervical cancer screening for women over 30
• counseling on sexually transmitted infections
• counseling and screening for HIV
• contraceptive methods and counseling to prevent unintended pregnancies
• lactation counseling and equipment to promote breast-feeding
• screening and counseling to detect and prevent interpersonal and domestic violence
• yearly well-woman preventive care visits to obtain recommended preventive services

“This report provides a road map for improving the health and well-being of women,” said committee chair Linda Rosenstock, dean, School of Public Health, University of California, Los Angeles. “The eight services we identified are necessary to support women’s optimal health and well-being. Each recommendation stands on a foundation of evidence supporting its effectiveness.”

Deaths from cervical cancer could be reduced by adding DNA testing for HPV, the virus that can cause this form of cancer, to the Pap smears that are part of the current guidelines for women’s preventive services, the report concludes. Cervical cancer can be prevented through vaccination, screening, and treatment of precancerous lesions and HPV testing increases the chances of identifying women at risk.

Although lactation counseling is already part of the HHS guidelines, the report recommends comprehensive support that includes coverage of breast pump rental fees as well as counseling by trained providers to help women initiate and continue breast-feeding. Evidence links breast-feeding to lower risk for breast and ovarian cancers; it also reduces children’s risk for sudden infant death syndrome, asthma, gastrointestinal infections, respiratory diseases, leukemia, ear infections, obesity, and Type 2 diabetes.

HHS should consider screening for gestational diabetes in pregnant women between 24 and 28 weeks of gestation and at the first prenatal visit for pregnant women identified to be at high risk for diabetes. The United States has the highest rates of gestational diabetes in the world; it complicates as many as 10 percent of U.S. pregnancies each year. Women with gestational diabetes face a 7.5-fold increased risk for the development of Type 2 diabetes after delivery and are more likely to have infants that require delivery by cesarean section and have health problems after birth.

To reduce the rate of unintended pregnancies, which accounted for almost half of pregnancies in the U.S. in 2001, the report urges that HHS consider adding the full range of Food and Drug Administration-approved contraceptive methods as well as patient education and counseling for all women with reproductive capacity. Women with unintended pregnancies are more likely to receive delayed or no prenatal care and to smoke, consume alcohol, be depressed, and experience domestic violence during pregnancy. Unintended pregnancy also increases the risk of babies being born preterm or at a low birth weight, both of which raise their chances of health and developmental problems.

HHS’s guidelines on preventive health services for women will need to be updated routinely in light of new science. As part of this process, HHS should establish a commission to recommend which services health plans should cover, the report says. The commission should be separate from the groups that assess evidence of health services’ effectiveness, and it should consider cost-effectiveness analyses, evidence reviews, and other information to make coverage recommendations.

The report addresses concerns that the current guidelines on preventive services contain gaps when it comes to women’s needs. Women suffer disproportionate rates of chronic disease and disability from some conditions. Because they need to use more preventive care than men on average due to reproductive and gender-specific conditions, they face higher out-of-pocket costs, the report notes.

The study was sponsored by the U.S. Department of Health and Human Services. Established in 1970 under the charter of the National Academy of Sciences, the Institute of Medicine provides independent, objective, evidence-based advice to policymakers, health professionals, the private sector, and the public. The National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and National Research Council make up the National Academies.

Mad as hell about the deficit, I hope you are too

23 Jul

No matter where you turn, there is talk of budgets, deficits, program cuts, raising taxes and all that goes with it.  I find it ironic [insert your own adjective] that the people doing the most talking are the same people who are responsible for the mess and the need for budget cuts and higher taxes.

Whether it is giving seniors a new drug benefit or passing legislation designed to push home ownership, subsidizing electric cars and new air conditioning, paying for clunkers, placing the government at risk for mortgages, paying people not to grow soybeans, conducting wars or bailing out  General Motors, the people responsible all work in Washington, DC.

Social Security didn’t get into the state it is because of stock markets or Wall Street or even the recent recession, but because politicians constantly “improved” it over the last seventy-five years and failed to fund (think tell you that you would have to pay more in taxes) the added costs for the grand promises they made.

The idea that all this budget and deficit mess just happened unrelated to the actions taken by our elected officials is ludicrous.  They are responsible, Republicans, Democrats, Independents and Socialists, conservative, and liberal.  Their short-sighted thinking and lack of any strategic concern, their ignoring of unintended consequences or planning for contingencies such as economic downturns is responsible. Their accounting gimmicks with the budget and flawed cost projections for new programs are responsible, their failure to stick with pay go is responsible.

Their solutions favoring one group or the other are inadequate and no solutions at all, most are aimed at gaining favor in the next election.  Now to cover their trail they are pitting one group of Americans against the other, they are stimulating generational warfare. Politicians want more revenue for the government so they can continue doing what they have been doing for decades.  Just think about how much of the money you pay in taxes is going to pay interest on debt owed to foreign governments and individuals.  In June the interest payments are listed by Treasury as “Interest on Treasury Debt Securities (Gross)…$110,537,000,000 (that’s billion by the way).  Take a look for yourself at the Treasury Report on Monthly Receipts and Outlays for June 2011      

Here is what the growth of our national debt looks like for the last ten years.  You can blame whomever you like, there is certainly enough to go around. But does it matter?  According to these Treasury numbers the debt grew by (be right back I have to find another calculator mine does not go that high). Ok, now I have it, the debt grew by $2,092,015,235,189 (trillion) during the last term of President Bush, but keep in mind that for the last two years of that term there was a Democratic controlled House and Senate so somebody approved the proposed spending.

The federal deficit (now over $14 trillion and growing).


Dollar Amount

09/30/2010                          13,561,623,030,891.79
09/30/2009                         11,909,829,003,511.75
09/30/2008                         10,024,724,896,912.49
09/30/2007                         9,007,653,372,262.48
09/30/2006                        8,506,973,899,215.23
09/30/2005                        7,932,709,661,723.50
09/30/2004                        7,379,052,696,330.32
09/30/2003                        6,783,231,062,743.62
09/30/2002                        6,228,235,965,597.16
09/30/2001                       5,807,463,412,200.06
09/30/2000                       5,674,178,209,886.86

You should be roaring mad at all of our politicians regardless of party, liberal or conservative.  They give you what they think you want (or more correctly what they want) and ignore the consequences.  Yikes, I sound like a Tea Party aficionado and that is not the case at all.  I’m just mad and really concerned…and you should be too.

The AARP is at it again, don’t be mislead

22 Jul

The AARP is off and running with its scare ads about Social Security. For the record, nobody is talking about cutting existing retiree benefits they “earned” or even the ones they didn’t actually earn (LOL). As the TV ad says, seniors are fifty million strong, but what they are really saying is: “We vote, so remember that politicians. If you touch our entitlements we will get even.”

Isn’t class warfare creating enough problems, we don’t need a good dose of generational warfare to make things worse. Reducing government waste and closing so-called loopholes as suggested by the AARP is not going to fix the deficit when forty percent of the budget is Social Security and Medicare.

If the AARP and other special interest groups have their way, there is a bleak future facing all Americans. Come on AARP, us seniors don’t deserve more than younger Americans who are now paying our benefits. There are young families struggling too and we had sixty-five years or more to get it right.

It really is a spending problem, what is your estimate??

21 Jul

Raise taxes or trim spending or perhaps better, eliminate new spending programs until our fiscal house is in order.

Take your pick, but consider this, the government’s track record for predicting the true cost of anything is not good. In fact, it is dismal. The original projected cost of Medicare was off by ten times. The average cost of public works projects is understated by 50 to 100 percent. Your taxes to support Social Security were never to be higher than $90.00 per year. The projections and the ultimate reality of the cost of the Affordable Care Act will be no better. Even before it was off the ground major components that were supposed to pay for it were changed and the accounting made creative (think “doc fix”).

So if all this is historically true and it is, how can raising revenue possibly deal with such inaccuracy? Every new spending project will simply create another new problem down the road either adding to the deficit once again or requiring more taxes.

If politicians want to keep the masses happy with a new entitlement program of the day, let them add a new tax each time dedicated to the program and indexed to cover the actual costs. Then Americans can decide what they want to pay for, really pay for. Until that happens (like never), we are just kidding ourselves that raising taxes is the answer to our fiscal problems. LOL

Paying more for Medicare – especially if you are “wealthy” YOU may be wealthy!

20 Jul

The talk in Washington is about getting the wealthy to pay “a little bit more” for Medicare as one way to help solve the budget issue. What the reports on this issue overlook is that higher income beneficiaries already pay considerably more for Part B Medicare and for Part D as well. 

You need an income of at least $ 85,000 to pay higher amounts if you are single and $170,000 if married. This is admittedly a small group of over age 65 Americans. In fact, according to the website less than 5% of  Medicare beneficiaries are affected.  These individuals are not protected by the COLA rule so that even if the bulk of Americans have their premium frozen because there was no COLA adjustment for the Social Security benefit, these premiums increase.  In addition, under reforms within the Affordable Care Act, the income levels subject to the higher premiums are not indexed to inflation to 2019.

So a word of caution, to really make a difference in the deficit, these extra payments may have to be imposed on a larger group of senior citizens. This tactic is just the latest attempt to further split Americans into one class or another.

Let’s say you are a married couple at the low-end of the income scale required for higher premiums today.  You and your spouse will pay $230.80 plus an additional $92.20 for Part B plus your Part D premium and an additional $12.00.  So your total premium for Medicare is currently $ 407.00 per month (assumes $30.00 for basic Part D coverage).

If you are among the few at the top end of the income scale for Medicare, your total premium in 2011 is $ 936.40 or nearly equivalent to the total premium for family group health insurance coverage for under age 65 Americans.

You can find the full story on income based premiums at

If you don’t think that the cost of Medicare is a problem for all of us, keep an eye on your Social Security monthly payment as more of it disappears into the Medicare premium.

Senior’s Medigap coverage under close scrutiny – everyone is going to pay more

19 Jul

Deductible, what deductible?

Someone has convinced members of Congress negotiating the budget deal that seniors spend more on health care because they can and they can because of the existence of Medigap policies. Studies in 2009 seem to support this idea. The idea being floated is to limit Medigap policies so that all would have a deductible. If not, the senior would have to pay Medicare a supplemental premium on the theory they will be greater users of health care.

While there may be some validity to all this, the idea also fails to consider all the initiatives underway currently that are supposed to manage the care seniors receive. So which is it, shift costs to seniors or manage their health care via such efforts as Accountable Care Organizations?

The other side of this story is that seniors pay for the Medigap coverage, often $500 or more a month for a couple. Deductibles in a Medigap policy will mean lower premiums and the savings can be used to cover the deductible.

Still to be addressed, what happens to seniors who enjoy near complete coverage through Medicare Advantage Plans or employer-provided supplemental coverage.

Kaiser Health News contains an excellent summary of the situation which you can read hear.

Social Security benefits, the trust fund and why the federal budget and deficit matter

18 Jul

Image by Third Way via Flickr

Does Social Security have a fiscal problem or doesn’t it?

Many seniors think they earned their benefit; they paid for it is often heard. If you listen to the AARP and others there is no real problem, the program is self-funded, self-sustaining. It has a trust fund. Some of our liberal friends say that because it has a trust fund, Social Security has nothing to do with the deficit or federal budget. In other words, these folks like to delude themselves into believing that the major entitlement programs are somehow in a budget world of their own and that just because politicians say so, everything can continue as usual (or just raise taxes on the wealthy). Were that only true.

If there is a Social Security trust fund and if as liberal politicians claim Social Security is a self-funding (via payroll taxes) program and if as they also claim changing Social Security for fiscal solvency is not a budget issue, why is there even any talk about not being able to pay Social Security benefits if the debt limit is not raised? Think about it. Why can’t we simply draw from the trust fund to pay benefits?

Well, there is no trust fund except for an accounting entry. Congress has spent all the tax revenue in excess of taxes over benefits and provided the trust with what are effectively IOUs. Today, benefits are paid using incoming payroll taxes and interest on the Treasury bonds previously sold to the government.

So where is the problem?

Since the government spends billions more each month than it receives in revenue, there is no money to pay the interest on the Social Security trust fund bonds unless it borrows more money and it can’t borrow more money unless… you guessed it, unless it raises the debt limit. Hence, the federal budget and deficit matter very much to those Americans on Social Security and to those who hope to someday receive Social Security.

Part of all this is a scare tactic because the government could use incoming general tax revenue to pay Social Security benefits and simply default on other obligations. Yikes, is that any better?

We have a really big mess and anyone who tells you otherwise is lying or a fool.

“Pretty soon spending cuts will fall by the wayside”

17 Jul
In January 2009, President of the United State...

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From the Wall Street Journal:

Ben Nelson of Nebraska, up for re-election in November 2012: “Raising taxes at a time when our economy remains fragile takes us in the wrong direction.” He adds: “If we start with plans to raise taxes, pretty soon spending cuts will fall by the wayside.”

And that is the essence of the issue. Raising taxes simply distracts from the real problem of spending. The history of Congress is clear, it finds a way to spend every penny it has available and much more. Raising taxes to solve a spending problem is bad policy, but most important it never solves the problem. If you don’t believe it, how much of the last five increases in your family income did you save as opposed to finding ways to spend?

At a recent news conference President Obama uttered these words:

“I’d rather be talking about stuff that everybody welcomes, like new programs.”

And there you have it in a few words, the essence of the problem facing the United States. We all welcome new programs, affordable or not and without regard to the unintended (often long-term)  consequences.  It really doesn’t matter who is president, the fact is that once hooked, Americans become addicted to their entitlements, but less hooked on paying for them.

Another new definition of “millionaire” Class warfare rhetoric is alive and well…and it works

16 Jul

If you thought the new millionaire was a family earning $250,000 a year you are wrong. Apparently the barrage of class warfare rhetoric is effective. Take a look at this comment posted on the Washington Post website. The last time I looked it was a long way from $106,000 to $1,000,000.

I wish the Post and media more generally would make proper distinctions among Social Security, Medicare and Medicaid. They each face different problems of widely differing intensity and were organized to solve different problems. Social Security the least problematic of all 3, and is largely solvable by raising the current $106,000 tax cap so that millionaires start paying a genuinely progressive tax. I don’t know why anybody would be against means-testing for Medicare

And if you want more evidence of the absurd view of too many people, consider this post from another blog (linked below):

I have read in several places on the Internet this morning that Social Security, a totally funded entitlement program is on the chopping block again–and the only reason is so the millionaires can get at these funds, stuff them in Wall Street and lose them for the American people.

It likely will have no impact but I wrote a letter to Obama all the same this morning.

If he cuts Social Security or Medicare to pacify the rich.  He can go to hell.  I will not under any circumstances vote for him in 2012.  And my guess is that millions of other Americans will not either.  Further more I’m fed up with the excuse–”Oh but things will be so much worse.”  That is what the corporate centrists (ie Republican) Democrats have held over the heads of Americans for the past 20 years as they dispensed crumbs.  What good is a crumb is it is not sufficient to live on?  What good is a minimum wage set by millionaires in Congress if it is not a living wage?

A “totally funded entitlement program?”  I wish.  Except that it is legal, Social Security is a Ponzi scheme slowly unraveling.

Mr. Obama and Mr. Christie are not that different.

15 Jul

I recall seeing Governor Christie of NJ addressing a group of state workers and their union leaders. Before he could say a word he was met with shouting, name calling and boos.  His first words were, “Why are you mad at me?”  Christie went on to explain that past governors of both parties made great promises in terms of pensions and other benefits they knew they could not keep and then did not fund the promises thereby creating the financial crisis faced by New Jersey.  Unfortunately, his accurate and very logical explanation had little impact.

Consider President Obama and the budget/deficit talks.  He recently said he was willing to endure the pain of making major fixes to Social Security and Medicare if it meant more stable and affordable benefits in the decades ahead. If Mr. Obama proceeds with this rational approach he will feel the wrath of self-serving seniors, the AARP and liberal idealists. 

Americans have a penchant for shooting the messenger even when the message is in their best interest.

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