Apr. 23, 2005 - 17:58 MST

I CAN DO THAT

An article that quotes facts and seems to back those things up with figures. Makes me shake my head a bit. Have a read - - - In full:

Robert J. Samuelson of the Washington Post wrote:

Judgments a must if we are to solve budget woes

"The Brookings Institution, one of Washington's prestigious think tanks, issued a study the other day on solving the nation's budget problems -- a study that paradoxically helps explain why we don't fix them."

"The authors all prominent policy wonks, would surely protest that they are among the loudest advocates of addressing the budget stalemate. True. But the way they go about it makes the stalemate more, not less, likely to continue."

"Let me say that, in many ways, Restoring Fiscal Sanity 2005 is a swell report. It's a lucid and fact-filled budget primer. It proves, if proof were needed, that an aging society is the central budget problem and that almost everything else is a footnote. Indeed the report usefully shows that, depending on how rapidly health costs grow, the budget outlook goes from abysmal to catastrophic."

"Driven by new medical technologies, annual health spending has increased about 2.5 percentage points faster than national income (gross domestic product) since 1960. The upward advance has defied numerous efforts to control costs. Standard budget projections assume that growth in health spending will slow to "only" 1 percentage point higher than GDP. If that happens, spending on Medicare -- health insurance for people 65 and older -- and Medicaid in 2030 would still double from today's 4.2 percent of GDP to 8.4 percent. Buit if health spending rises at its historic (and faster) rate, then Medicare and Medicaid would nearly triple to 11.5 percent of GDP"

"It would be necessary to nearly double the Medicare payroll tax (now 2.9 percent of all wages and salaries) and increase all personal income tax collections by more than 70 percent to cover Medicare and Medicaid costs," says the study."

"Now let's add Social Security. It's projected to rise from today's 4.2 percent of GDP to 5.9 percent in 2030. In 2005, all federal spending -- the entire budget -- is 20 percent of GDP, Social Security, Medicare and Medicaid together equal 8.4 percent of GDP. By 2030, those three programs alone cost somewhere between 14 percent of GDP (lower health spending) and 17 percent (higher health spending). Inescapably, we get one or all of the following: exploding budget deficits; staggering tax increases; draconian cuts in other government programs; and abrupt reductions in services for the elderly."

"So, what does the Brookings study advise ? Well, nothing. It presents various budget "options" -- larger government, smaller government and so forth -- and possible tax increases or spending cuts. It implores Americans "to make hard choices about what they want the federal government to do and how they want to pay for it." Asked why Brookings' experts couldn't craft a plan, editor Isador Sawhill said: "That requires values judgements -- and we don't all agree among ourselves."

"But if people who think constantly about government -- and don't face elections or angry voters -- won't make the hard choices, why should politicians ? Our budget stalemate lies precisely in the "values judgments" that the Brookings study avoids."

The present political consensus is crumbling. For decades, higher benefits for the elderly were effectively paid for by reducing defense spending -- not raising taxes or cutting other programs. In 1960, defense was 52 percent of the budget; in 2005, it's 19 percent. After 9/11, military spending won't shrink much more, but even if it disappeared, the savings wouldn't cover future spending on the elderly."

"We need a new public consensus to reflect new realities. Because all choices are hard, they require a larger moral and social framework that makes them legitimate. Big questions arise. With longer life expectancies, who's "old" ? How much of a moral claim do the old -- who could save for retirement and work longer -- have on the young to pay for them ? How do the needs of the old compare to society's other needs ? How high can taxes go without slowing economic growth ? My views are oft stated" raise eligibility ages, trim Social Security benefits for weathier retirees, make the elderly pay more of Medicare's costs."

"Americans should work longer to reflect longer life expectancies. Even so, taxes will have to rise. The alternative is a society that's unjust to the young, vulnerable to economic stagnation and too stingy with other national priorities."

"Those with competing views should make their case. If the Brookings experts couldn't agree, two teams might have laid out contrasting visions. The political role of places like Brookings is to clarify choices by voicing ideas that may be hard for politicians but, once broached , become more respectable."

"That's the way to a new consensus. Thinking small -- treating the budget problem to an accounting exercise -- won't get us there."

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My opinions begin here. Isn't that why we elect politicians ? To do what is right for the country and not just for a small portion of a politicians constituancy ? How long has it been since that was a reality ? Was it ever ? Why have we been paying such huge salaries and lifetime pensions, free health care and other perks -- was it for them to dodge their responsibilities ?

United has pulled out from their pension plans so the onus is on Pension Guaranty Corp, which won't be able to pay what the pensioners are owed. Who is ultimately at fault ? United I think, they promised pensions on projected earnings of investments and things like that. why should anybody rely on investments to bring them pensions ? The money was supposed to be THERE locked up tight. So now pilots who have built up a huge pension account won't be able to receive very much of what is owed them. They have based their housing, and other personal expenses and future plans on their income and what they expect to get when they retire. So it is obvious that they will probably have to sell their houses and cut back their plans.

Just a general pattern of things as they are in nowadays U.S.

Somehow, in all fairness the government should have backed the corporations against the wall and insisted that money should be in the bank for pensions. Not investments. Then when the corporations pled poverty, I think the government should have said, grandfathered are the people in your employ now. New hires can be hired with new promises (which also will have to be lived up to) and expectations. They then can work with what they have and plan accordingly.

Much of the same philosophy can be applied to our general population I think. Although my health was bad I worked until after my 69th birthday, and would have worked longer if it had been practical. Now after being retired nearly 15 years, how can we possibly cope with drastic decreases in health care and Social Security ? The COL increases in Social Security are calculated from some Cloud Nine formula it seems to me, which nowhere meets the actual cost of living. Visits to our doctor have a doubled co-pay now as do our prescriptions too.

We are aware of the seriousness of the situation and are infuriated by the Biggies in the THINK TANKS saying, "Things are bad, real bad, here the figures to back up what we say." "The country is in bad shape." Oh, but we cannot make value judgements - sorry." "Oh, here are some options. Choose wisely." or some such jackassery.

Just like many of my entries lay out problems we have, and I admit I have no solution, seems to me that the BIG TANKS could do better than I. Brookings claim differences in opinions. We all have them, how about they get their heads together and propose something sensibly concrete ?

All that other fol-de-rol is old hat from here, in many ways I CAN DO THAT . . . . . . . .

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