The Budget Dilemma in 15 Minutes

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Will Cain posts at The Blaze posts a summary of a conversation he had with Bob Herbert. In this conversation, they pretended to represent their respective sides of the aisle, and tried to come to a consensus to balance the budget and avoid a Greek-style collapse.

The crux of the argument is this. Raising taxes, cutting military spending, and doing all sorts of other things will not balance the budget. That’s because the budget is completely dominated by Medicare and Social Security.

Now, the curious thing about these two programs is that they are not programs designed to help the poor. Everyone, rich or poor or in between, participates in these programs, both in the paying end and the receiving end. These are not welfare programs in terms of “Let’s rob the rich and help the poor” spirit. These are simply programs designed to make everyone dependent on the Federal Government. This is the dirty little secret that Democrats won’t admit to.

However, if you want to get them to admit to it, then all you have to do is propose means-testing to these programs. Let’s take a baseline—say $40,000 or $80,000 or even $120,000—and anyone who makes more than that doesn’t get any Social Security or Medicare benefits but still has to pay in. Democrats universally oppose this proposal. If they were about being Robin Hood with government resources, then they should be all for it. Instead, they want to make sure the rich and poor alike receive these benefits in retirement.

There are some hard truths the people have to come to accept. The hard truth is simply this: The government cannot keep its promises with Social Security or Medicare. It simply cannot be done.

The only hope is if the economy starts growing at a wild 10% again, but that is never going to happen, not as long as we have the tax, regulation, and spending policies we have, and the political will to keep the status quo.

Alternative scenarios include:

  • Government simply prints more money to pay out Social Security and Medicare benefits. This means inflation, and it means the benefits reduce in value even though they are the same amount of cash. That means grandma with her Social Security check will barely be able to afford dog food.
  • Government taxes America to extinction, and still falls short. Even if government collected 100% of the wealth in the US, that would only last us a few years. After that, everyone would be living in third world conditions, and there still wouldn’t be enough money to pay Grandma her benefits.
  • Government stops paying benefits altogether. This means Grandma doesn’t get any money at all.
  • Government significantly reduces the benefits to match what we can realistically afford. In this case, that means that we, the future retired generations, will get to pay off the debt of Grandma’s benefits later.

The Ryan Plan is the final option: we get nothing, Grandma keeps what she had.

Honestly, I think the best scenario is number 3. It’s Grandma who auctioned off her grandkids so that she could get her retirement benefits. She had not right to do that. We are not our grandparent’s slaves. We may owe them our lives and eternal gratitude, but we are not their slaves.

It’s because people don’t realize how big a mess Medicare and Social Security is that we cannot have a serious discussion on the federal budget and the solvency of the United States. The democrats refuse to admit what a colossal disaster the entitlement programs are, when paired with anemic growht caused by massive borrowing, taxes, spending, and regulation. That’s why they don’t have a budget proposal, and haven’t for 2 years now.

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