The High Cost of Good Intentions
John Cogan’s latest book, “The High Cost of Good Intentions” forced me to conclude that our politicians are either innumerate or cynical. They’ve ignored (or pushed off telling us) what deficit spending will mean to our children and the security of the nation.
For example, Social Security and Medicare are about to drive federal spending to unprecedented peacetime levels. If nothing is done to restrain their growth, in a dozen years taxes levied on all income groups will have to be increased by 50%. Middle class households will face a combined income and payroll tax rate of 45%; tax rates on capital formation will be increased to 50%; and U.S. businesses will pay a 40% tax rate on their earnings.
Furthermore, Social Security is heading to certain bankruptcy. In a dozen years, the program will be unable to pay its promised benefits. The time to act is now to slow the growth in benefits promised to future retirees. Higher taxes are not the answer. By the time there are only 2 workers for each Social Security recipient (in 10 years), the financial burden on workers will already be too high.
The solution to the fiscal challenge presented by Social Security and Medicare is to limit the growth in their future benefits per recipient to the growth in overall consumer prices and medical inflation, respectively. Achieving this straightforward policy goal will eliminate the need for sharply higher taxes.
As we edge closer to a train wreck, I find myself thinking of Harry Truman who once said, “I never did give them hell. I just told the truth, and they thought it was hell.” It’s not too late to adjust runaway entitlement programs, otherwise there soon will be “hell to pay.” We are running out of time. We need to stop electing politicians who can’t run numbers and who won’t just tell us the truth.
Construction Surveillance Technician
6 年Joel, You Note highest deficit in “peacetime”... when in fact as we draw troops down, particularly in Afghanistan, we draw an increase in US government civilians and contractors. Might these expenses far exceed “entitlements”? Perhaps we are led down the wrong alley to waste, redundancy, bloated contracts, bloated salaries for ill-prepared workers jumping on the gravy train, particularly in the area of IT?
EDI Specialist at Intecc
6 年“Social Security is heading to certain bankruptcy. In a dozen years, the program will be unable to pay its promised benefits. The time to act is now to slow the growth in benefits promised to future retirees. Higher taxes are not the answer. By the time there are only 2 workers for each Social Security recipient (in 10 years), the financial burden on workers will already be too high. The solution to the fiscal challenge presented by Social Security and Medicare is to limit the growth in their future benefits per recipient to the growth in overall consumer prices and medical inflation, respectively. Achieving this straightforward policy goal will eliminate the need for sharply higher taxes.” Has anyone considered cutting the defense budget, or bringing our troops home from the Middle East, or stop giving tax breaks to the top 10% of the wealthiest members of our society? Are there any plans to force the Pharmaceutical companies to either lower their prices or cut their subsidies? Social Security and Medicare assist the retired and physical handicap who are not necessarily earning a living. And these are programs I will pay into all my working years. These are not government handouts. In fact I will still pay Medicare premiums once I retire. There is a lot of pork in our federal budget that should be cut that would more than cover Social Security and Medicare costs. Let’s tackle those first.
Dream to live, live to dream
6 年No good deed goes unpunished
Transformation executive
6 年You should run for office!!!
"Don’t partake of the spirit of our times. Look for the good and build on it." - Gordon B. Hinckley -
6 年There’s no arguing with math for those capable of rational thought. If we eat our seed corn, we will have nothing to plant or harvest.