Let's expose presidential prevarication. Earlier this year, President Barack Obama warned that Social Security checks will be delayed if Congress fails to increase the government's borrowing authority by raising the debt ceiling. However, there's an issue with this warning. According to the 2012 Social Security trustees report, assets in Social Security's trust funds totaled $2.7 trillion, and Social Security expenditures totaled $773 billion. Therefore, regardless of what Congress does about the debt limit, Social Security recipients are guaranteed their checks. Just take the money from the $2.7 trillion assets held in trust.
Which is the lie, Social Security checks must be delayed if the debt ceiling is not raised or there's $2.7 trillion in the Social Security trust funds? The fact of the matter is that they are both lies. The Social Security trust funds contain nothing more than IOUs, bonds that have absolutely no market value. In other words, they are worthless bookkeeping entries. Social Security is a pay-as-you-go system, meaning that the taxes paid by today's workers are immediately sent out as payment to today's retirees. Social Security is just another federal program funded out of general revenues.
If the congressional Republicans had one ounce of brains, they could easily thwart the president and his leftist allies' attempt to frighten older Americans about not receiving their Social Security checks and thwart their attempt to frighten other Americans by saying "we are not a deadbeat nation" and suggesting the possibility of default if the debt ceiling is not raised. In 2012, monthly federal tax revenue was about $200 billion. Monthly Social Security expenditures were about $65 billion per month, and the monthly interest payment on our $16 trillion national debt was about $30 billion. The House could simply enact a bill prioritizing how federal tax revenues will be spent. It could mandate that Social Security recipients and interest payments on the national debt be the first priorities and then send the measure to the Senate and the president for concurrence.
It might not be a matter of brains as to why the Republican House wouldn't enact such a measure; it likes spending just as the Democrats.
I believe our nation is rapidly approaching our last chance to do something about runaway government before we face the type of economic turmoil seen in Greece and other European nations. Tax revenue has remained constant for the past 50 years, averaging about 18 percent of gross domestic product. During that interval, federal spending has risen from less than 20 percent to more than 25 percent of GDP. What accounts for this growth in federal spending? The liberals like to blame national defense, but in 1962, national defense expenditures were 50 percent of the federal budget; today they are 19 percent. What accounts for most federal spending is the set of programs euphemistically called entitlements. In 1962, entitlement spending was 31 percent of the federal budget; today it is 62 percent. Medicare, Medicaid and Social Security alone take up 44 percent of the federal budget, and worse than that, it's those expenditures that are the most rapidly growing spending areas.
Our federal debt and deficits are unsustainable and are driven by programs under which Congress takes the earnings of one American to give to another, or entitlements. How long can Congress take in $200 billion in revenue per month and spend $360 billion per month? That means roughly 40 cents of every federal dollar spent has to be borrowed. The undeniable fact of business is that a greater number of people are living off government welfare programs than are paying taxes. That's what's driving Europe's economic problems, and it's what's driving ours. The true tragedy is that just to acknowledge that fact is political suicide, as presidential contender Mitt Romney found out. We can't blame politicians. It's the American people who will crucify a politician who even talks about cutting their favorite handout.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
Sir;... Handouts are common to failing republics, and go back as far as the Roman empire... They are not the problem, but short term, they are the solution, the treatment that allows the disease to grow on while the patient slowly dies of the injustice that kills all societies...Essentially, when the Romans emperors realized that they needed only the Army to survive, they quit troubling themselves over the nicety of democracy... When their army was crushed, and the people had no good reason to fight, the poor cut off their thumbs rather than die for a society that offered them no future...You have to realize that the rich cannot defend themselves, and that the poor cannot survive without their commonwealth... All are inclined to accept the situation they have grown up with because they know no other; but commonwealths, republics depend upon the common people in control of their land and destiny, and while that situation can grow up where they are dispossessed, first of the land and then of their rights in the land, those who do so, even if it is made legal, can never make it just or wise...
If the rich have loaned the government money rather than paying taxes, the government should just keep the money and call it good... If the government has borrowed money from the Chinese to allow our rich to buy debt around the world that cannot possibly be paid back, the government ought to tell the Chinese and the rich to go fish...This people has been made poor and hard by taxation -every day- more without representation... Let the government try to get blood out of this stone to keep outlaw capitalism alive... I want to see nothing more or better in order to see the cypher board wiped clean, and all accounts settled for once and all... With entitlement the government is only giving a fraction of what is due to this people, because we have the title to all...With entitlements the government is buying peace and business as usual though it means the ruin of the place and people...
I will not tell the people to refuse to take what is theirs... I will tell them that much is theirs, and all the rest too...The last revolution will not be complete in this land until we are half ways through with the next revolution... I do not mean to be cruel... I am simply stating the fact, that they cannot collect from us what we do not have and do not owe; and it is easier for us to be rid of the government and the rich, that the government defends, than to live with either group....
No one can point to the society that died from too few parasite... All societies die from too many parasites...This is no vacation from reality... This is when our choice to survive or become a farce of fictive history is laid before us... I choose survival...
Posted by: James A, Sweeney
Tue Jan 29, 2013 5:34 AM
Sir;... You are smart to recognize that the congressional republicans haven't an ounce of brains, but they have a ton of principals which they take to be a fair substitute...
Next; you must know that the social security trust fund has been leveraged against the national debt, and has been for a long time when if it had paid even 3% of interest, it would be in great shape right now...It is all pie in the sky and cake tomorrow... It was only meant to buy off the working class with promises to allow the defeat of international communism... Mission accomplished, and back to business as usual...
Posted by: James A, Sweeney
Tue Jan 29, 2013 8:09 AM
There's been a massive cultural shift ever since Johnson's Great Society, and it's resulted in the current generation's sense of entitlement and belief that the federal government should provide for them from cradle to grave. People used to take pride in working, providing for themselves, and avoiding taking welfare. Now, accepting welfare, food stamps, longterm unemployments benefits, giveaway housing, etc., they take as their due, and this diminishes any pride and the incentive to find jobs. There's no mystery why so many have dropped out of the labor force -- they do better being supported by the government than taking jobs. Obama has made this respectable, and the HHS has become the 47 percent's piggy bank. Meanwhile, government bureaucracy has ballooned to administer all this and is paid out of proportion to the value of their work in the private sector. In short, I think we are in a downhill death spiral from which I see no hope of recovery.
Posted by: Derel Schrock
Wed Jan 30, 2013 8:50 AM
The "worthless bonds" referred to by the Mr. Williams are interest bearing Treasury Notes, considered by most people to be one of the safest places available to put funds. Where else would we have Social Security Trust Fund monies put? These notes would be worthless only if the United Sates government were forced to default on its obligations by failing to raise the debt ceiling.
The "debt ceiling" crisis is a manufactured event designed to allow one political party to take our economy hostage to its view of the future instead of negotiating in good faith for what is best for our country. The "debt ceiling" has nothing to do with the frightening size and growth of the national debt. It simply is a necessary step in paying the bills for luxuries already purchased by our government. Failing to raise the "debt ceiling" would be akin to not paying your January credit card bill for Christmas presents you bought in December. We know what not paying our bills would do to our personal credit reputation. It would have the same disasterous effect on our nations economy. Some people don't seem to care, but most of us do.
In recent years the national debt has been driven up by paying for two hugely expensive unauthorized wars, adoption of a major underfunded social program, significant unecessary unfunded tax cuts, and the worst recession since the Great Depression. Put a timeline to these events to help decide how they came to be. This is the same crowd screaming for reform.
In order to preserve our nations credit we must not only pay our current bills, but we must reverse the growth of the national debt by forging realistic budgets going forward. The solution will need to include some combination of serious cuts in spending, realistic tax reform, and perhaps most importantly job growth to grow the pool of taxpaying members of the society. The only way to acheive this is for our elected representatives to sit down and negotiate for what is best for our country rather than what is best for their political parties. Failing to pay bills for things already purchased will not lead us to a long term solution.