The $53 Trillion Asteroid

[Aggie Hoopsfan]

Let me give you three numbers that will put this economic asteroid into perspective: $200 billion, $14.1 trillion, and $53 trillion.


$200 billion is the approximate total amount of write-downs announced so far as a result of the current credit crisis.


$14.1 trillion is the size of the entire U.S. economy


And $53 trillion is (drum roll please) the approximate size of this country's bill for the Social Security and Medicare promises we've made.

While no one will ever mistake me for Alan Greenspan, it seems to me that the third number is quite a bit larger than the other two. It also seems very few people care.

According to the latest Social Security and Medicare Trustees report (and I use that term loosely since it has the word "trust" in it) released earlier this week, the economic asteroid will first make impact in the year 2019 when the Medicaid trust fund becomes insolvent.

Only an immediate 122 percent increase in Medicare taxes and a 26 percent increase in Social Security taxes can prevent (or more likely, delay) its impact.

http://www.cnn.com/2008/US/03/26/beck.deficit/index.html

This is what I want to hear the candidates for president address. I could give a fuck about preachers or slum lords or anything else.

[Nbadan]

It's not like all $53 trillion is due at once, so this article is misleading....SS issues can be solved by increasing the maximum level of contributions per year, indexing future benefits based on assets, and not spending $3 trillion dollars on use-less wars...

[Aggie Hoopsfan]

It's not like all $53 trillion is due at once, so this article is misleading.

Sweet, so it will take a couple of years to completely bankrupt the country. Well, seeings you put it like that, Obama/Hillary in '08. Let's see if we can bankrupt this country in an even shorter period of time :tu


SS issues can be solved by increasing the maximum level of contributions per year

Contributions for what? Or do you mean taxation for SS? Did you not read the article?


Only an immediate 122 percent increase in Medicare taxes and a 26 percent increase in Social Security taxes can prevent (or more likely, delay) its impact.

[Nbadan]

Sweet, so it will take a couple of years to completely bankrupt the country. Well, seeings you put it like that, Obama/Hillary in '08. Let's see if we can bankrupt this country in an even shorter period of time

A little more than a couple years, try 2047...that's the year the SS trust fund will be insolvent....

[TDMVPDPOY]

dont forget the 1 trillion you clowns owed china on future bonds hahahahaha

[Aggie Hoopsfan]

A little more than a couple years, try 2047...that's the year the SS trust fund will be insolvent....

Did you miss the whole 2019 insolvency date for Medicare, or just want to gloss it over in the name of Democraptic "progress"?

[Cant_Be_Faded]

I could give a fuck about preachers or slum lords or anything else.
Rrright...which is why you posted and replied about these subjects in this very forum.

[BonnerDynasty]

Allow me to opt out of Social Security PLEASE


It's only a matter of time before the guvment taps their dirty little hands into our rothIRAs.

Book it.

[Nbadan]

you can drop out of SS now if you join some other state-sponsored retirement plan...for instance, some govt. employees have their own plans...of course, if the government can't meet it's obligations to SS, then these funds likely dry up too, just like your Roth...there's no way to get out of it, all our money, including our savings is tied together in the financial markets...if part of it crashes, it all crashes...

[Aggie Hoopsfan]

Um, unless you work for the government, you can't opt out of social security. Therein lies the problem. I'd happily opt out and be 'on my own' for retirement, and I'm pretty confident I can do a better job of investing my money properly for retirement than the bullshit that is social security.

[Aggie Hoopsfan]

Rrright...which is why you posted and replied about these subjects in this very forum.

That was just something to do to kill some time while waiting for the meaty topics (like this one) to come out.

No one in D.C. wants to deal with this fucking problem, and that pisses me off. And I'm talking both sides of the aisle.

[Nbadan]

Actually, SS has been a very successful program, but the government doesn't like huge amounts of money sitting around doing nothing......

[Don Quixote]

I'd rather take my chances with the market, and invest my $$ myself, thank you. Thankfully, in my profession, most of us get that chance -- to opt out of SS.

If, on the other hand, you want the gummint to manage your SS and retirement for you, have at it.

[Nbadan]

...and if you want Bear Sterns and Citibank to manage your money, just like they have managed their own money, more power to you - but there would be no safety net...

[Don Quixote]

That was just something to do to kill some time while waiting for the meaty topics (like this one) to come out.

No one in D.C. wants to deal with this stinking problem, and that torks me off. And I'm talking both sides of the aisle.

Yes. GW tried to deal with it, and that went over like a fart in church. (Of course, I fart in church all the time ... but that's another thread.)

To put it in a very small nutshell, the bloated nature of SS, and how the feds have, time after time, raided the fund, is a big reason why the budget is the way it is right now. I am not sure of the exact numbers, but the biggest item in the fed budget, at close to 65%, is entitlement programs of all sorts. National defense isn't even close to the amount of money being transferred from rich to poor.

This kind of stinks to those of us who feel that gubmint ought to limit itself, or at least emphasize: (in no particular order) law & order, national defense, homeland security, building roads and sewers, schools, and so on. Instead, they are focused on the redistribution of wealth. And so the gummint has its priorities all screwed up. Government being run this way is one of the big reasons why conservatives reacted to it beginning in the 50's, and have become a viable political force.

[Nbadan]

The Oreo economy for Republican deniers...


http://www.truemajorityaction.org/oreos/

[2centsworth]

For Dan and his misinformation campaign.



It's not like all $53 trillion is due at once, so this article is misleading....

The $53 Trillion is a Present Value Figure so the figure is much larger in the future, so you're mileading, but we already knew that.


SS issues can be solved by increasing the maximum level of contributions per year, indexing future benefits based on assets, and not spending $3 trillion dollars on use-less wars... Medicare is what's going to bankrupt the country. That's just goverment run insurance for the old. What's going to happen when the government adds the young to that list?


Actually, SS has been a very successful program, but the government doesn't like huge amounts of money sitting around doing nothing......

since when is a ponzi scheme considered successful? That government earns less than 1% on that huge amount of money sitting around.


and if you want Bear Sterns and Citibank to manage your money, just like they have managed their own money, more power to you - but there would be no safety net... Have you ever heard of diversification? Btw, there are plenty of safety nets, especially better than the one on my SS statement that states SS will be out of money soon.

[George Gervin's Afro]

I have a great idea! let's end SSN and Mdeicare..We can build shanty towns and the let the old and poor die miserable deaths..!


Sincerely,

Compassionate Conservatives

[Extra Stout]

The average income tax rate will need to go up from 18% to around 30% to make these programs solvent.

[Extra Stout]

I have a great idea! let's end SSN and Mdeicare..We can build shanty towns and the let the old and poor die miserable deaths..!


Sincerely,

Compassionate Conservatives
It's much easier to shoot the messenger than to think about where $53 trillion is going to come from.

[Extra Stout]

Liberal: Let's just raise taxes on the rich!

The Rich: Oh, were you talking to me? Sorry, I gave up my U.S. citizenship. You're looking at a proud citizen of the UAE now. I don't owe U.S. income taxes. Seriously, the look on your face is priceless. Do you like my new Bentley?

[2centsworth]

I have a great idea! let's end SSN and Mdeicare..We can build shanty towns and the let the old and poor die miserable deaths..!


Sincerely,

Compassionate Conservatives
you're so simple minded. The $53 trillion is what we would owe today, but if you confiscated 100% of everyones money, assets, and investments you would still only come up with $50 trillion. Not even a 100% tax on income and assets would pay for your so called compassion.

Do you want to talk solutions or act retarted?

[spurster]

Is this debate a way to deflect from BushCo's irresponsible spending that McCain apparently wants to continue? The GOP have simply refused any fix (unless you want to call their privatization a fix) that would further postpone the 2047 SSN date, and they worsened the health care problem with their Medicare prescription plan to enrich the pharmas. The Democrats' ideas on health care will further worsen the situation.

1. SSN is easy to fix. Just increase the threshold where your income is taxed, and slowly implement a partial, responsible privatization of SSN.

2. Health care is difficult to fix. There is not enough willpower from the people or any party or any industry to truly rein in costs.

[boutons_]

Why is healthcare going to bankrupt the US, while national health plans, including in countries where people live longer (there are whole bunch of such countries), are not bankrupting other countries?

All countries are struggling to manage their retirement/health systems. But the USA seems to be the only one that is not, at least according to the right wing scare mongers.

Why is the USA struggling so badly, doomsday scenarios, when other countries aren't?

Why does the USA pay almost double the %age of its GDP, and rising to 20% in a few years, in healthcare vs other countries and still not provide healthcare and health insurance for everyone?

Because BigPharma, health insurance companies, and all private players in health care are gouging and ripping off the country, having purchased enough politicians to protect the status quo.

What's Aggie's and scare-mongers solution? and can Aggie elect the people to fix it the way he wants it fixed? And is that a real fix?


McCain surely won't fix shit. He will offer more of dubya's bullshit and inaction, while enriching the corps even more, like dubya making it illegal for Medicare/Medicaid to negotiate drug prices down.

So what's your solution, oh Great Aggie Problem Solver?

I'm not sure any politician has the courage to even propose a plan, which will anyway be shot down by the politicians owned by the corps. We already saw that with Hillary's health plan in the 90s, totally independent of it its merit or merit.

ANY serious change, which MUST mandate cost reduction, will be violently opposed by the corps since those very costs are the corps' revenues. Note the politicians talk only about "how to pay" rather that "how to reduce costs".

The basic question is can the USA organize and govern itself for the Greater Good of the people, rather than for Greatest Good of the plutocracy?

[spurster]

I think any health care plan that keeps costs in line will have to include the following unpalatable steps:

1) Customers/patients have little information on who are the best doctors or hospitals or pharmacies. We need a public, online review system like any number of web sites have on products they sell. Of course, they will be a lot of chaff and cruft in such a system, but at least we would have some information and the doctors/hospitals would have an incentive to provide quality service.

2) Customers/patients have little information on what anything costs. We need a public, online system that lists the costs of services of all doctors and hospitals and drugs. When a doctor/hospital recommends any treatment, the patient gets an estimated cost including ALL costs and any change would require patient approval [not required for emergencies, of course]. Patients would then get a single clear estimate in advance rather than 5 impossible to understand accountings after the fact.

3) Insurance shields customers/patients too much from routine costs. Insurance should generally be applied only for medical and financial catastrophes. We need to have high deductables (up to a certain percentage of income), so that the relatively healthy, non-poor majority will, as matter of course, choose low-cost, effective care and make doctors and hospitals and pharmas compete for them. There are a few things that should be covered regardless of the deductable (e.g., vaccines, pregnancy care). Maybe many people will avoid going to the doctor until it's nearly too late, but that is their responsibility.

4) I would implement this first for government health care (from Medicare to our grand and glorious senators and representatives). Of course, all of us would reap the benefits of 1 and 2. I would not favor any national health care until the costs that the government currently covers were under control.

[Nbadan]

60 Minutes: Economic Disaster Ahead...


OS2fI2p9iVs

[Aggie Hoopsfan]

Actually, SS has been a very successful program, but the government doesn't like huge amounts of money sitting around doing nothing......

Yeah, it's so successful it's going to be insolvent in our lifetimes.

[Aggie Hoopsfan]

I have a great idea! let's end SSN and Mdeicare..We can build shanty towns and the let the old and poor die miserable deaths..!


Sincerely,

Compassionate Conservatives

Typical liberal. Attack the messenger in a lame ass attempt to gloss over the problem.

[Aggie Hoopsfan]

All countries are struggling to manage their retirement/health systems. But the USA seems to be the only one that is not, at least according to the right wing scare mongers.

I know you're an idiot, but $53 trillion isn't scare mongering, it's what our bill is RIGHT NOW.


What's Aggie's and scare-mongers solution? and can Aggie elect the people to fix it the way he wants it fixed? And is that a real fix?


I would flush every bureaucrat in D.C. and start over, for one thing. No one up there has a fucking clue or gives a damn about anyone but themselves and staying in office so they can get more money put in their pockets by lobbyists.



So what's your solution, oh Great Aggie Problem Solver?

Well golly gee croutons, I guess we should all just stick our head in the sand and ride this thing to the bottom, that seems to be the politicians' solution (and that of liberal idiots such as yourself).

What's your solution? And that doesn't mean blame it on Bush or Cheney, let's hear what the liberal wunderchild on the forum has to say about it all.

The fix to this is pretty lengthy and involved, and right now no one in this country has the balls to face it head on (well, not anyone in power, anyway).

[Nbadan]

Because BigPharma, health insurance companies, and all private players in health care are gouging and ripping off the country, having purchased enough politicians to protect the status quo.

Yep, the Health-care industry is ripe with corruption....that's why people's insurance premiums keep going up 3-10%/year.....the insurance companies don't want to help you cause they want to turn a profit, no moral contradiction there, and hospitals and private Doctor's routinely over-charged government programs like Medicare-Medicad because, well, at least they know they'll pay...

[Nbadan]

The average income tax rate will need to go up from 18% to around 30% to make these programs solvent.


Are you saying we shouldn't pay our debts? SS is solvent till 2047, unless the government defaults on it's loans, then you know what happens? The Dollar fails and we all switch to the Euro, the Swiss frank, or the Amero....

[MannyIsGod]

Argue against SS if you want. Don't paint it as a liberal program though. Bush did some lawmaking in this regards, didn't he?

[Aggie Hoopsfan]

Yep, the Health-care industry is ripe with corruption....that's why people's insurance premiums keep going up 3-10%/year.....the insurance companies don't want to help you cause they want to turn a profit, no moral contradiction there, and hospitals and private Doctor's routinely over-charged government programs like Medicare-Medicad because, well, at least they know they'll pay...

I realize this is a specific case, but our work premiums actually went down this year and we got more coverage to boot. Not sure how that worked out, but I agree with you in general, it's bullshit.


Are you saying we shouldn't pay our debts? SS is solvent till 2047, unless the government defaults on it's loans, then you know what happens? The Dollar fails and we all switch to the Euro, the Swiss frank, or the Amero....

We should pay our debts. Our political leaders need to start working on an alternative plan for the future (like coming up with a plan that slowly phases out SS and lets us all plan our own retirements and withdraw from the SS program.


Argue against SS if you want. Don't paint it as a liberal program though. Bush did some lawmaking in this regards, didn't he?

Just to be clear, I'm just calling out boutons and Dan for being stupid fucks who don't see any problem with us continuing the status quo until the US of A is freakin' broke.

I admitted voted for Bush twice (in part because the Democratic candidates were even worse) but he has done a suck ass job as president.

Our economy and our nation's financial future is a fucking mess at the moment, in part because all Bush did was continue the status quo in D.C.

I'm seriously debating running for office in two years, our country needs some leadership and it isn't getting jack shit from any of the idiots in D.C.

Of course, my sister is there now (military) and from the stories she tells me anyone with any morals would be the proverbial drop in the ocean there, so I'm not sure how much good it would do anyway.

On second thought, fuck running for office. The better idea may be to move to a different country and renounce my citizenship.

We're headed to a USA where our dollar is worth the equivalent to a peso, and no one in that shithole we call our nation's Capitol wants to do shit about it, just take more money from me and you to hand out to get a couple of votes.

The best thing that could happen to this country would to wipe out Congress and start the fuck over.

[Nbadan]

We should pay our debts. Our political leaders need to start working on an alternative plan for the future (like coming up with a plan that slowly phases out SS and lets us all plan our own retirements and withdraw from the SS program.


In a perfect world, yes, people should have control of their own money, but we don't live in a perfect world, not everyone knows how to invest, what strategies are safer than others, or how to calculate safe rates of appreciation and balanced risk...so there always has to be some social safety net....It would be a perfect world again if we all gave enough to the poor so that this safety net didn't need to exist, but even with all the giving we all do at church and other social organizations, that's still not enough...

[Nbadan]

I realize this is a specific case, but our work premiums actually went down this year and we got more coverage to boot. Not sure how that worked out, but I agree with you in general, it's bullshit.

This whole idea of saving on health care costs is even self defeating....yes, you saved some on monthly premiums but what did you lose? A safer more reliable provider, less coverage, more deductibles, less choices....really, for the money we all pay, everything should be covered...

[BradLohaus]

unless the government defaults on it's loans, then you know what happens? The Dollar fails and we all switch to the Euro, the Swiss frank, or the Amero....

And there's our contingency plan, folks.

[xrayzebra]

Are you saying we shouldn't pay our debts? ....

I just wished we did pay our debts on a
yearly basis. That is you get a tax bill,
just like we get a tax bill on our homes and you had to sit down and write a check for the full amount. And then
maybe some of you bleeding hearts
would learn just what it cost for all these programs. But it will never
happen, never!

[xrayzebra]

This whole idea of saving on health care costs is even self defeating....yes, you saved some on monthly premiums but what did you lose? A safer more reliable provider, less coverage, more deductibles, less choices....really, for the money we all pay, everything should be covered...

No problem for me, just step up and
write the insurance carrier or Uncle
Sugar a check every month for the
true cost for paying for "everything".

[Extra Stout]

Are you saying we shouldn't pay our debts? SS is solvent till 2047, unless the government defaults on it's loans, then you know what happens? The Dollar fails and we all switch to the Euro, the Swiss frank, or the Amero....
Yeah, that's what I'm saying. You are consistent about one thing, and that's idiocy.

And notice, once again, how you don't want to talk about Medicare. You just stick your head in the sand and start making accusations. You coward.

Who here thinks that the American people, rather than just pretending the train isn't going off the tracks and proceeding as normal, are going to vote themselves a 70% tax increase? Anyone?

[DarkReign]

On second thought, fuck running for office. The better idea may be to move to a different country and renounce my citizenship.

We're headed to a USA where our dollar is worth the equivalent to a peso, and no one in that shithole we call our nation's Capitol wants to do shit about it, just take more money from me and you to hand out to get a couple of votes.

The best thing that could happen to this country would to wipe out Congress and start the fuck over.

Quitter.

[smeagol]

AHF, Argentina awaits you with open arms . . .

[Don Quixote]

Argentina awaits you with open arms . . .

I'm there!

I understand the country is beautiful and the food is good.

But what do the women look like? Will they await me with open arms?

[smeagol]

I'm there!

I understand the country is beautiful and the food is good.

But what do the women look like? Will they await me with open arms?

Amigo, women here are beautiful . . .

[jochhejaam]

Life expectancy increases roughly 2 years per decade <since 1840> so the retirement age should be increased (I realize that it has over the years, but perhaps not enough). Life expectancy was 70 years in 1967 and 78 years in 2006.

I currently pay 10% into PERS, which is the maximum allowed by law (nothing to SS or Medicare). SS and Medicare take 7.65 percent, with a ceiling of $97,500. What's the problem with raising it to 10% (other than taxpayer revolt)?
Also, the $97,500 ceiling could be raised to parallel the cost of living increases. I think I've heard talk of raising the ceiling to 125 thousand.



Problem's solved. We now have a only a 52 trillion dollar asteroid.

Now let us move on to the next order of business...


Worth commenting on 2centsworth? <if it's not, notify me via PM :lol >

[Don Quixote]

Amigo, women here are beautiful . . .

Okay ... but how do they compare with the fine women in Brasil? And will any of them go for a politically conservative evangelical? I do have multiple degrees, but am not rich. Nor am I handsome ... or strong ... or particularly charming ...

[Nbadan]

Seems like something about Social Security in the news every month. There seems to be general agreement that SS has a "problem," perhaps it's even in "crisis."

We're told we'll need to start dipping into the Trust Fund in 2017. By 2041 the Trust Fund will be exhausted, & SS won't be able to pay the benefits they promised.

Maybe we won't even have enough money in the general budget to repay the Trust Fund! Both Bush & Cheney have implied as much.

So people argue about solutions. Private accounts? Increase payroll taxes? Lift the cap & get the high earners to pay more? Everyone has their favorite fix, & sometimes the discussions get quite involved - into the minutia of stock returns, management fees, interest on Treasury Bonds, & so on. Gives you the feeling you have to be a financial whiz to understand what's going on.

I'll save you all this trouble. The solution is - do nothing. Absolutely nothing. "Do nothing" is the best solution to a problem that doesn't exist.

"What?" you say. "Doesn't exist? Of course it exists, everyone agrees it exists! They talk about it on TV, in the paper, Dems talk about it, Pugs talk about it - how could it not exist?"

These are Orwellian times. The first thing you should do, when people try to sell you economic predictions, is to check their figures.

In the case of SS, it's easy to do. All the figures under discussion come from one place - the SS Administration's yearly Trustees' report, & they very helpfully post their reports on the web.

Each year the Trustees make 3 forecasts charting the predicted state of SS financing out 75 years into the future. These forecasts are based on assumptions about future population, longevity, productivity, GDP & so on.

There's the "Low-Cost Forecast". This is the best-case scenario - the best they expect the economy to be able to do.

There's the "Intermediate Forecast." This is supposedly what's most LIKELY to happen, & all the numbers you hear in the media come from this forecast.

Finally, there's the "High-Cost Forecast." This is the worst-case scenario; the worst the economy could do.

So, three forecasts, & the intermediate forecast is used for all public pronouncements on SS. This is where the numbers predicting SS shortfall come from.

OK, so what?

Bruce Webb has been monitoring the Trustees' forecasts for 10 years, & he's discovered a startling fact. Nearly every year, the real numbers hit the LOW-COST FORECAST. That's right. Real economic performance most closely matches the Trustees' BEST-CASE scenario.

And what result does the low-cost forecast give us?

Seventy-five years of fully-funded SS plus a Trust Fund surplus in the trillions.

The table on his web page isn't formatted well, so I'll reproduce the essence here: The Trustees' growth forecasts for the next year under the Intermediate & Low-cost assumptions, then the actual percentage growth of that year:

1997

Int-Cost Forecst 2.5%
Low-cost Forecst 3.2%*
Actual 3.8% (+.6 better than low-cost)

1998

Int-Cost Forecst 2.5
Low-cost Forecst 3.1*
Actual 3.9 (+.8)

1999

Int-Cost Forecst 2.6
Low-cost Forecst 3.4*
Actual 4.0 (+.6)

2000

Int-Cost Forecst 3.5
Low-cost Forecst 3.9*
Actual 5.1 (+1.2)

2001

Int-Cost Forecst 3.1*
Low-cost Forecst 3.5
Actual 1.0 (-2.0 worse than int-cost)

2002

Int-Cost Forecst .7
Low-cost Forecst 1.6*
Actual 2.4 (+.9)

2003

Int-Cost Forecst 2.9*
Low-cost Forecst 3.8
Actual 3.1 (+.2)

2004

Int-Cost Forecst 4.4*
Low-cost Forecst 4.9
Actual 4.4 ()

2005

Int-Cost Forecst 3.6*
Low-cost Forecst 3.9
Actual 3.6 ()

2006

Int-Cost Forecst 3.4
Low-cost Forecst 3.8*
Actual 4.7 (+.4)

2007

Int-Cost Forecst 2.6*
Low-cost Forecst 3.4
Actual 2.2 (Prelim) (-.4)

Average Int-Cost 2.89
Average Low-cost 3.5*
Average Actual 3.47


There you have it. In 6/11 years, the real numbers come in BETTER THAN the low-cost forecast (the supposedly "optimistic" one).

In 1/11 years, the real numbers come in lower than the optimistic forecast, but better than the intermediate forecast.

In 2/11 years, the real numbers match the intermediate forecast.

In 2/11 years, the real numbers are lower than the intermediate forecast (one of these years being the anomalous year of 9/11).

On average, the real numbers essentially match the optimistic forecast.

This means fully funded SS 75 years out, & trillions of surplus in the Trust Fund.

The implication being, we may be paying TOO MUCH payroll tax.

So forget the private accounts v. increased payroll tax debate. Instead, ask yourself -

Why isn't the media analyzing the Trustees' reports & bringing you this information? Why do all the news accounts discuss the "shortfall" as if it were set-in-stone gospel, certain to occur?

Why don't they even tell you that these are 75-year economic forecasts, & discuss the likely accuracy of 75-year economic forecasts?

Why hasn't anyone in Congress noticed that the Trustees, on average, can't accurately forecast the NEXT year, let alone the next 75? Don't our reps have staffers whose job it is to follow these things? Why aren't they minding our shop? Why do they all seem to take the existence of the "problem" for granted?

I'll tell you what I think. Eleven years of economic data comes in too suspiciously close to the low-cost forecast. I think the low-cost forecast represents the real forecast, and the intermediate forecast is ratcheted under that to produce the crisis scenario certain actors wish to sell us.

I believe we're being conned, & that some in the media & in Congress know we're being conned.

The Bruce Web (has links to all the Trustees Reports & other data). (http://bruceweb.blogspot.com/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=5)