Are entitlements real culprit in our deficits?
As a retiree and a senior citizen I am tired of politicians coming on television and repeatedly creating the myth that the biggest culprits of budget deficits and national debt are the entitlement programs like Social Security and Medicare when the truth is that the wars in Iraq and Afghanistan are two of the major culprits in this context.
These two wars have been expensive. According to estimates by well-known economists Joseph Stiglitz and Linda Bilmes, when all costs are counted the Iraq invasion cost U.S. taxpayers $3 trillion. Ditto for the Afghan war. In other words, the two gratuitous wars doubled the U.S. public debt. This is the reason there is no money for Social Security, Medicare, Medicaid, food stamps, the environment, and the social safety net.
What did America get from these wars? But as the war debt will never be paid off, citizens and their descendants will have to pay interest on $6,000 billion of war debt in perpetuity.
Furthermore, thousands of Americans lost their lives and hundreds of thousand Americans were physically and emotionally maimed.
Post 2008-09 financial crisis, our government bailed out big banks. Now the Federal Reserve has interest rates so low that retirees and others living on their savings can earn nothing on their money. The interest rates paid on bank CDs and government and corporate bonds are lower than the rate of inflation.
To live on interest income, a person has to purchase Greek, Spanish, or Italian bonds and run the risk of capital loss. The Federal Reserve’s policy of negative interest rates forces retirees to spend down their capital in order to live. In other words, the Fed’s policy is destroying personal savings as people are forced to spend their capital in order to cover living expenses.
In the meantime, the super rich got richer (0.01 per cent) saw their income rise faster than the merely rich. In 2010, about 15,000 households with average income of $23.8 million saw their income rise by 21.5 per cent. The top 1 percent, whose average income is $1,019,089, had an 11.6 percent increase in income. The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation.
Retirees are not getting Social Security benefits for free. They and their employers paid into the system throughout their working lives. The same is true for Medicare. Retirees not only paid into Medicare funds for their working lives but they also pay a monthly premium into the system after retirement and the benefits after the deductibles are met and are paid only at 80 percent. In other words, they again have to pay 20 percent of the balance out of their pockets.
Those of us who contributed to these so-called entitlement programs for more than three decades could have seen that money easily quadruple or more (with benefits of compounding interest) during those years if invested in fixed-income instruments. Their benefits are, therefore, neither for free nor are they out of proportion.
— Khwaja A. Hasan
Formerly of Terre Haute
Wadsworth, Ill.
Politics of envy prevails today
In a Nov. 25 editorial, this newspaper scolds Mitt Romney for citing “extraordinary financial gifts from government” as the reason President Obama was re-elected. But I think Mitt’s merely stating the obvious. And his tardiness on this point is understandable. The problem for today’s politicians is that speaking the truth in a campaign gets you slaughtered; just ask Ron Paul.
The editorial urges us to “give the ’takers’ talk a rest.” Apparently this newspaper believes that political correctness should trump the facts. Consider: Not counting those receiving Medicare and SS, over 100 million people in the U.S. receive some form of federal welfare. America has become a takers’ paradise.
“A president of the United States just ran a re-election campaign based on the promise of government largess, exploitation of class division, the demonization of success, the glorification of identity politics, and the presumption that women are a helpless interest group; and he did so while steadfastly refusing to acknowledge the looming — potentially fatal — {fiscal} crisis that the country faces. And it worked,” notes Charles Cooke.
In a single paragraph Cooke captures the stark reality we face. A reality suggestive of a cultural disconnect from the founding principles that were bequeathed to us. We have reached a tipping point in this country in which a majority of voters want “free” stuff from the government and they see President Obama as their Santa Claus.
The fierce independence and splendid work ethic that built this country have been replaced by a generation of petulant parasites manifesting an infantile sense of self-entitlement that would have disgusted previous generations. Their politics is the politics of envy. They have in essence authorized the government to seize the wealth of successful people and redistribute it to the “needy.” European-style socialism is their model and Obama intends to give it to them.
One imagines the anger that a modern day JFK would arouse in today’s progressives were he to deliver his famous “Ask not what your country can do for you” speech. There was a time, not long ago, when Americans did not envy — they aspired. They aspired to give their children a better life than had been given to them. But baby boomers will be the first generation in American history to bequeath a lower standard of living to their children.
Disdaining the free enterprise model, many voters covet a womb-to-tomb socialist safety net for their many wants. This stunted vision of America suggests that our gravest problems are cultural, not political, and are not susceptible of political solutions.
As a 60-year-old conservative I realize that my views and attitudes have become a bit anachronistic insofar as today’s politicians are concerned. And that is why I left the GOP years ago. Republicans merely represent Democrat-lite.
Gov. Romney demonstrated that he’s nearly as comfortable with big government as President Obama; thus my amusement at the Democrats’ demonization of him. Principles are dead in Washington, so debates ultimately boil down to the question of which party is going to run our welfare system more efficiently.
The weakness in all democracies is that one group learns to vote itself a free ride at the expense of another. Just keep the federal goodies coming and stick the grandkids with the bill! Americans are witnessing the most egregious example of generational theft in history and no one appears concerned about this fiscal outrage.
Columnist Joseph Sobran suggests that the next time you pass a playground you consider all those little nonvoters, oblivious to the crippling tax burden that’s being transferred onto their shoulders and reflect on how dishonest it is to teach them that they too will one day grow up to enjoy self-government. In what sense are they governing themselves if before they ever enter a voting booth for the first time they are shackled with insurmountable debts they had no part in incurring and no way of escaping? Is that what the framers meant by self-government or is it more akin to what they termed “involuntary servitude?”
So what’s next? Prepare for trillion-dollar budget deficits in perpetuity and a percentage of GDP to government spending resembling that of Greece, as you become painfully aware that “free” health care does not mean timely (access) to health care. In a democracy people usually get the government they deserve.
— Reggie McConnell
Terre Haute
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