Guest Post by John Stossel
Congress and the media obsess endlessly over whether President Donald Trump should be impeached.
Both ignore $23 trillion of bigger problems.
That’s how deep in debt the federal government is now, and because they keep spending much more than they could ever hope to collect in taxes, that number will only go up. It’s increasing by $1 trillion a year.
“Shut up, Stossel,” you say. “You’ve been crying wolf about America’s debt for years, but we’re doing great!”
You have a point.
For many years, I’ve predicted that government, to fund freebies both parties want, would print boatloads of money. That would cause massive inflation. I bought silver coins so I might afford a loaf of bread while the rest of you haul suitcases full of nearly worthless paper currency to the bakery — or go hungry!
Clearly, that inflation crisis hasn’t happened.
Thanks to Trump’s contempt for the “deep state’s” love of endless regulation, businesses are hiring and stock prices are up. America is doing great.
But while our deficits haven’t yet created a crisis, they will. You can stretch a rubber band farther and farther. Eventually, it will snap back — or break.
We can’t pay off our increasing debt — unless we’re willing to tell the government to stop stationing soldiers in 80 countries, stop sending checks to poor people and old people, and stop paying for “free” health care for people like me. If the government did stop, the public would revolt.
Voters scream if there’s even talk of cuts to Medicare or Social Security. But the programs are unsustainable. Social Security was meant to help the minority of people who outlive their savings. When Social Security was created, most Americans didn’t even reach age 65. Now it’s an “entitlement” for everyone.
Social Security, Medicare, Medicaid and other federal health care spending account for about half of the federal budget, and because we old people rudely refuse to die, these “entitlements” consistently grow faster than the tax revenues meant to fund them.
Anyone serious about giving our kids a future has to be willing to make big cuts to those programs, or at least privatize them and let individuals make our own decisions with our own money.
But good luck to any politician who proposes that.
By contrast, voters don’t get stirred up as we just quietly sink farther and farther into debt.
So politicians demand even more spending.
Last week, Senate Minority Leader Chuck Schumer said appropriations bills won’t get passed by the end of the year unless Republicans agree to spend “significant resources” on fighting the opioid epidemic, gun violence, child care, violence against women, election security, infrastructure, etc.
“With a Democratic House consumed with impeachment, there is very little appetite for the sorts of common-sense fiscal policies that could rein in our out-of-control deficits and debt,” says Republican Sen. Ted Cruz.
That implies that if Republicans were in charge, they would restore fiscal order. But there’s little evidence of that. Republicans talk about spending cuts and “responsibility” but rarely cut anything.
Democrats want new social programs. Neither party wants to reduce the military budget. Trump wants his wall and tariffs. Farmers, once proud independent capitalists who criticized welfare, now get 40% of their income from the government.
“The federal budget is on an unsustainable path,” says Federal Reserve Chair Jerome Powell.
No matter who you vote for and no matter what speeches they make, none of them is doing anything to put us on a sustainable course. It’s too bad.
Fortunately, thanks to the inventiveness of American entrepreneurs, our economy keeps creating new wealth for politicians to grab.
That might mean Congress wouldn’t have to cut spending for America to gradually grow our way out of this terrible debt. All they’d need to do is make sure spending goes up slower than the rate of inflation.
They won’t even do that.
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No shit. I have been saying this stuff for years.
First off butt head, social security is not an entitlement or program as you suggest! It was sold or impossed as an annuity. I and my employer paid for that promise with our hard earned money. I did not want to give them that money in the first place and I am fairly sure my employer didn’t want to either. Let me put it this way. I will stop accepting my annuity check called social security when the f-in thieves gives me all my money back with simple compounded interest. By the way, I prefer to be paid in gold. Stop making excuses for the all these sociopaths, criminals and psychopaths. The only thing I can agree with you on is redistribution of the hard working mans income has to stop. Government has to get out of our daily lives completely.
Yep, that is what my 83-year-old mom says also…..then I remind her that she has already taken out many times what she paid in….crickets.
So STFU Oldtimer you are grabbing other people’s money with both wrinkly bony booger hooks. Social Security was never designed as an entitlement but like all things government spending other people’s money on other’s people….well there is no stopping that!
We need to terminate social security for anybody under 50 and payout half for those 50-65…..you old-timers stay the same since you have very limited means of earning additional income.
I would eliminate all federal departments except for the state department (how about 1 embassy per continent not one per country) and yes that includes defense and reduce military expenditures to $100B or less….
Just stop all other Federal programs….and set tax rates to 0%…..for everything. Government to be funded by tariffs……
You are failing to take into consideration the effect inflation has taken on the real dollars paid in and the worthlessness of the money being paid out. In addition you fail to consider the invested value of this money had people been allowed to invest this money themselves. The average person receives more income from their 401K than Social Security…..
Why dont you kiss this boomers ass, mother f’er?
Why don’t you kiss my ass, skidmark?
Based on my social security statements of earnings between my and my employers social security taxes paid it averaged 28,000 per year. I have bene working at this level of income for 20 years. My estimated benefit is $35,000 year 17 years from now. They say I am “maxed out”. Therefore although i will for the next 17 years contribute the max in taxes my payment will remain the same (probably fo down). My first ten years of work were lower income and i did not even include them. When it is all said and done I could have put $5,000 annually into a stock index fund and at 67 would have double what SS will provide. Instead I will have put in 9x and 50% less. They waste our money then blame us and then tax us more. When will we have enough of this?
Maybe we should bring in more refugees and give them more money. More illegal immigrants too. But i am called greedy and privileged because i am the one funding said immigration, taxes my own benefit.
Right for higher earners it is indeed a negative outcome….you get the luxury of paying the max (and Medicare never caps on the pay-in side) and then you will never get anywhere close to getting that back out……how else would OldTimer and other lower-earning workers get that big payout! Social Security is a wealth redistribution also.
Good point– which is why we need the “opt out” option. You obviously are making enough that savings/pensions/equities will cover your retirement expenses.
The 2 major flaws in the system were Inflation and Demographics.
1) Inflation assured that boomers ( middle class as example) who made average salaries of $20-30,000 during the decades of the 1960’s thru the early 80’s ( decent wages then) were paying around $1500- $2000 a year to SSI… inflation sees them collecting nearly $2000 a month on average. This means that they will have collected what they paid into the system by age 70 and then they are just tax burdens on current workers– and Medicare is far, far worse than this.
2) At the time of passage, the average life span was 15 to 20 years younger than now. But the biggest factor is that their is no “SSI fund.” It was essentially designed so that current workers would pay for those collecting benefits. The ratio of payers to recipients was almost 6-1 at the beginning and now is down to 1.4:1.. simply put, they are shilling out a lot more than is being taken in as boomers retire by the hoard and millennials and Gen Z are not a large enough group to cover it. Once the shrinking reserve is all gone ( est between 2026 and 2030) there will HAVE to be major cuts or tax increases–this may be when we see it all fall apart. ( or option 3 could be those pesky Death Panels hidden away in Obamacare.)
There’s only one flaw in the system … it’s existence.
Even if it weren’t an inflation-exacerbated, doomed-to-collapse, Ponzi scheme from the time it was first proposed; it would still be a morally unconscionable wealth redistribution (i.e., THEFT) welfare scheme.
Amen to that. I’ve been robbed by the feds at gunpoint for the 55 years I’ve been working so far. If they deem to give some of it back now, I’ll take it.
Robert (QSLV)
“social security is not an entitlement or program as you suggest! It was sold or impossed as an annuity.”
it was advertised as an annuity, sure. but it always was a ponzi scheme – a mild one at first, but with 1) a reduced birth rate for taxpaying whites and 2) increased hoards of non-contributing illegals and 3) increased longevity combined with 4) increasing medical costs, that ponzi is now topping, simultaneously with the fiat debt dollar ponzi.
the climax will be epic. but no-one will tell the story, all you’ll see is the bodies piling up in the streets.
Slight correction… The worker actually pays both sides of Social Security. The employer figures the costs of employment when making an offer to employ someone. ( Taxes, Insurance, Benefits) When all these costs are figured in, they then have a total figure of the cost of an employee. If the costs of taxes is less, they can afford to offer more in salary. If taxes are higher, they have to offer less because the bottom line is total employee cost. If they were not required to pay into Social Security, your salary would be higher, so in fact the worker pays the entire Social Security Tax with their labor.
Social Security was established as a Trust. Trust laws require that the trustees do what ever needs to be done, within the rules of the Trust, to ensure the Trust survives for the benefit of the beneficiaries – those who paid into the Trust. That may include freezing or decreasing benefits. While I do not recall the exact year, in the early 1970s, the Social Security Trust was absorbed into general accounts. In essence, the Trust was broken, because the segregated money was no longer invested on its own, if at all. There were also changes that allowed those not part of the trust, to be beneficiaries. Those changes required that contribution rates be increased (during the Reagan years). Had the original Trust been kept in place, there would be no issue today.
I would be ok with getting my money back with the compounded interest.
Yes, many of us have been warning for years and as I watch events unfold, mostly with a yawn, there is no doubt the day of reckoning is getting close. That being said, as I commented before on TBP, when Jaybird made the above comment, I did raise an eyebrow and say huh? Maybe it was nothing, but I doubt it.
Only one entity is responsible for our debt: the CONGRESS of the UNITED STATES. Yet the American Citizen keeps voting the same old ARSEHOLE SPENDERS into office. So, it is the American VOTER who is responsible for our debt; particularly the voters who do not put any of their own pocket money into the TAX TILL.
In most congressional races, there may be only a democrat and a republican on the ballot (thanks to oppressive ballot access regulations – see ballot-access.org for the most complete story). As BOTH are likely going to be big spenders when elected, what should the citizen who has chosen to vote, do? The two major parties actively throw their support behind those who will carry water for their big business friends. When folks like Ron Paul come along, they actively put up candidates in hopes of defeating them in the primary. If one is to blame the “vote,” then one should understand that we are ONLY ALLOWED to vote for the ones THEY have already allowed onto the ballot.
“Democrats want new social programs. Neither party wants to reduce the military budget. Trump wants his wall and tariffs. Farmers, once proud independent capitalists who criticized welfare, now get 40% of their income from the government.” Uh, never Trumper John, hate to break the news to you. A wall would save us enormous amounts of money. And tariffs bring in revenue, instead of spending. You got that stuff backwards.
the debt doesn’t matter.
the collateral seizures will matter.
collateral seizures were the goal all along.
The US is being bankrupted as part of a plan, not incompetency. It is only by bankrupting the government, who’s debts are in fact owed by the Citiznes, that the people can be blackmailed into accepting the abolishment of the Constitution and the formation of a new government run by banks and corporations….
“The world is now more sophisticated and prepared to march toward a world government. . . . The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”
David Rockefeller
The Democrat’s (Communist) planned Economic destruction of the USA is called the Cloward-Piven Strategy. Their Social Destruction plan is called Cultural Communism.
No one cares, they’re all fat and happy tax slaves. Its been like that since before Jesus called them slaves and they denied it then, too.
WhatisTaxed c o m
Silver will be better than gold
I agree John that silver has more use than gold industrially thus greater value. That said, they are both hard assets with historical value. I’ll settle for either one. What I am looking at right now is simple death by a thousand cuts. Call it inflation, taxation, insurance premiums or what ever anyone wants. I am tired, as an individual, of having to find a workaround while the sociopaths at the top are moving the goal posts around. We are seeing small business’s evaporating, independent farms going toes up, small and medium manufacturing going bankrupt, our schools and colleges turning into governmental propaganda centers and our medical institutions turning into day care centers. Can someone explain to me the value in all this wonderful progressive, transformational new normal.
The solution for USA debt is to do what the Europeans did long ago – stealth taxation – introduce VAT it’s a real winner and offers government total control over corporations’ accounting and gross margin reports.