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Ignoring the Issues That Matter, Part 2

What are the most important challenges and issues facing America—and why do politicians and pundits ignore them? We  concludes our review this vital topic.

Consistently, the most important challenges facing the American people are covered inadequately  by most media sources. Yesterday, we examined inaccurate coverage of national defense. Today’s report looks at Social Security, Medicare, health care, education, and the problems facing the middle class. 

SOCIAL SECURITY AND MEDICARE. Social Security and Medicare are frequently and mistakenly called “entitlements,” lumping them in with a variety of assistance programs.  That is incorrect.  Working Americans pay for these benefits throughout their working lives, and depend on them when they reach their senior years. But all those dollars taken from paychecks are not put into an account with the workers name on them.  They are simply mingled with all other government income. And, both programs are going broke.

A Time Money report reports: “How worried should you be over Social Security’s future? According to the most recent Annual Report of the Board of the Social Security Trustees…After 2019, Treasury will start spending down the fund; its reserves are estimated to be depleted by 2035.”

Much the same can be said about Medicare. Modern Health Care reports that  “The Medicare trust fund will be insolvent by 2028, according to the 2016 Medicare trustees’ report released [in 2016].”

The fiscal health of both of those programs are vital, but far too many politicians are frightened of doing anything to remedy the problem.

MIDDLE CLASS DESPERATION. As the New York Analysis of Policy and Government recently reported, middle income Americans are losing ground. In December, 2015, Pew Social Trends reported “…middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.” Pew Social Trends also reported that “From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas examined in a new Pew Research Center analysis of government data. The decrease in the middle-class share was often substantial, measuring 6 percentage points or more in 53 metropolitan areas, compared with a 4-point drop nationally.”

THE HEALTH CARE CRISIS. America’s health care system was demonstrably superior to those of other nations, but it did have flaws. Obamacare, advertised as a means to address those flaws, actually made matters worse. Examples:

  1. Lost plans. Sen. Ben Sasse released a report about Obamacare’s effects on competition among insurers, concluding that outcomes have worsened for most Americans, in terms of choice of insurers and plans. Over the past year, the number of insurers offering plans in exchanges has dropped by nearly 6%.Many states have lost more than 80% of their insurers: Alabama went from 23 to 3, Arkansas went from 24 to 4, and Wyoming from 21 to 1, just to name a few. Only New York did not lose over half of its insurers, going from 28 to 15 insurers, a 46% decline.
  2. Higher premiums. report by the Kaiser Family Foundation and the Health Research & Educational Trust found that, since 2008, average employer family premiums have climbed a total of $4,865. From 2015 to 2016 the most popular exchange family plan, Family Silver, saw a 10% average increase in its premiums. In some states, premiums rose by nearly 40%.In 2015 the average annual family premium was $17,545 per year, and the average premium for a single policy was $6,251. Young men were particularly hard-hit. Average premiums rose by 49% from 2013 to 2014, the year Obamacare was supposed to go into effect.
  3. Higher deductibles. The New York Times, long a cheerleader for Obamacare, reported that many people can’t afford to use the health insurance that they have purchased because of the deductibles .New York Times reporter Robert Pear wrote that the median deductible in Miami was $5,000 in 2015. It was $5,500 in Jackson, Miss., and $4,000 in Phoenix. One Chicago family of four paid $1,200 monthly for coverage yet had an annual deductible of $12,700.
  4. High costs. The Office of the Actuary of the Center for Medicare and Medicaid Services has projected that Obamacare will result in an additional $274 billion in administrative costs alone over the period of 2014 through 2022.

Obamacare is collapsing in a whirlpool of skyrocketing premium costs, vanishing choices, and deductibles so high as to make the coverage more an illusion than a reality.

EDUCATION. Despite spending more pupil than just about every other nation, America’s students have fallen behind their international peers. U.S. employers find that far too many are ill-prepared for the job market. Their lack of knowledge in the basics of science, math, American history and civics bode ill for the future.  The nation stands to lose much if not all of its leadership in technology, economy, and the very essence of its being within just a few short years.  Yet there is little movement to address this fundamental threat to the nations’ future.

There are solutions

None of these issues are insolvable.  In fact, some are readily correctable.

  • The nation’s electrical grid can be protected for less than $10 billion.
  • President Reagan faced a similar defense challenge when he took office. His increased spending on national defense actually discouraged America’s main adversary at the time, the Soviet Union, and commenced several decades of relative peace and prosperity between superpowers. The same can be done again.
  • The policies that have slashed middle class jobs, including favorable treatment for China, tax policies that encouraged corporations to take jobs overseas, and Obamacare policies that actually reward companies for replacing full time jobs with part-time positions are solvable through legislation.
  • Federal spending on anti-poverty programs that have failed to reduce poverty could be redirected to Social Security and Medicare.
  • The authority to determine school curriculum can be removed from the self-interested government bureaucrats, teachers’ unions, and the educational hierarchy and put back to where it belongs—in the hands of parents, organized into appropriate formats.

Ignoring the Issues That Matter

What are the most important challenges and issues facing America—and why do politicians and pundits ignore them? The New York Analysis of Policy & Government reviews this vital topic in this two-part review.

The nation needs to distinguish between issues that count, and those of far lesser importance. Inevitably, this will produce rage in advocates of those causes deemed comparatively inconsequential.

The United States faces numerous challenges. Many of the fundamental underpinnings of America’s economy, national security, health, preparation for future generations, and even the very existence of the country’s cultural and ideological underpinnings are threatened as never before.

During recent years, The U.S. endured an armed force weakened by years of disinvestment, wishful thinking replaced blunt realism in foreign affairs, an attempt to improve the nation’s health insurance system failed, the middle class was deeply wounded, public education deteriorated, and the population became more divided than at any time since the Civil War.

Serious attempts to address any of these crises are substantially hampered by the national debt of about $20 trillion, (half of which was accumulated in just the past eight years) the influence of special interests which ignore the harm they have wrought, and a determined effort by many educational, media and political figures to, as Barack Obama promised, “fundamentally change” America.

The former president was never seriously questioned as to what he sought to change America into.  Those agreeing with his political views fail to explain how the government-dominated economic system he sought to bring about, and in the case of health care, actually did establish, would succeed in the U.S. after failing in almost every other nation in which it has been tried.  Countries as diverse as the former Soviet Union and modern-day Venezuela have tried and failed.  Some point to Europe, but the nations of that continent essentially established their government-heavy economic systems by relying on Washington to take over most of their defense spending. Even China, ostensibly a Communist regime, employs a form of capitalism, and, not incidentally, relies heavily on the American consumer to keep its economy moving.

As profound and existential threats to America remain unaddressed, much of our national conversation pretends they don’t exist and focuses instead on issues of, at best, secondary importance—or no importance at all. Much of the blame for the failure to successfully confront, or even acknowledge, the nation’s real challenges falls on the traditional media. In its fevered attempt to assist progressive candidates, America’s premiere news sources have chosen to gloss over the extraordinary problems that plague the nation.

These are the under-emphasized issues that should be the centerpiece of national attention:

NATIONAL SECURITY AND FOREIGN AFFAIRS. The national discussion about foreign affairs and defense planning has borne little relation to reality, probably because the actual facts are sufficiently distressing to make pundits and politicians alike worry that an honest narrative, and an accurate description of the costs that need to be afforded to ensure America’s safety, are sufficiently unpleasant that audiences and constituents alike would turn away.

Bluntly: Russia, China, and Iran constitute a singular and unified threat against the west.  Their geographical size and population make them the largest foe the United States has ever encountered. Russia, for the first time in history, has a greater nuclear arsenal than the U.S. China will soon have a larger navy. As a unit, they are America’s equal in technology, conventional and strategic military strength, and industrial capacity.

Their belligerent goals are manifestly clear through their actions in Ukraine, the South China Sea, the Middle East, and their dramatic armaments buildup. As America slashed its defense budget, these nations hiked theirs.  Washington, over the past eight years, gave peace a chance; it didn’t work.

Rather than confront the facts and take the necessary steps to protect the nation, politicians see more benefit on spending for more popular domestic programs. Reporters and analysts allow that irresponsibility to continue, citing irrelevant statistics such as comparisons of how much larger Washington’s budget is than Moscow, China, and Tehran.  But that comparison is inaccurate. Those axis powers don’t have to worry about paying a profit to private companies to the extent the U.S. does, nor do they disclose all their spending, or include many personnel costs. Since they constitute a contiguous land mass, they also don’t have to worry about extensive lines of supply, as the Pentagon does.

A related issue:  America’s electrical grid is very vulnerable to attack by an electromagnetic pulse (EMP) that could be triggered by a single well-placed nuclear blast, (North Korea has implied its ability and willingness to do this) or even a naturally occurring solar event, such as that which occurred in the 1850’s.

The Report concludes tomorrow with a look at Social Security, Medicare, Public Education, and Healthcare.

Economic Statistics Indicate U.S. Financial Crisis

There should be little doubt that the U.S. economy is in significant trouble. Indeed, objective criteria, as well as spokespersons from both sides of the political spectrum, indicate an economy approaching crisis levels. A survey of views illustrates the challenge:

The latest report from the Bureau of Labor Statistics  reveals that “Real hourly compensation decreased 0.4 percent…”

The Bloomberg news service reports that “One in seven U.S. households has a negative net worth, as student loans and credit cards plunge a diverse group of people—including those with good jobs—into the red…Almost 15 percent of Americans, or 47 million people, live below the poverty line, according to the U.S. Census Bureau. Then there are the people loaded up with debt. Even people with good jobs can owe so much on credit cards, student loans, or mortgages that, on paper, they’re worth less than zero. About 14 percent of U.S. households fall into this category, with a negative net worth, according to an analysis this month by the New York Federal Reserve. Add up all their possessions—cash, property, retirement accounts—and subtract all their debts, and one in seven Americans ends up in the red. Overall, U.S. households have $12.3 trillion in debt, according to another New York Fedreport, released this week.”

Liberal-oriented truth-out.org  notes that: “…the evidence shows that living-wage, family-sustaining positions are quickly being replaced by lower-wage and less secure forms of employment. These plentiful low-level jobs have padded the unemployment figures, leaving much of America believing in an overhyped recovery… New research is beginning to confirm the permanent nature of middle-income job loss. Based on analysis that one reviewer calls ‘some of the most important work done by economists in the last twenty years,’ a National Bureau of Economic Research study found that national employment levels have fallen in U.S. industries that are vulnerable to import competition, without offsetting job gains in other industries. Even the Wall Street Journal admits that ‘many middle-wage occupations, those with average earnings between $32,000 and $53,000, have collapsed.”

The financial source Profitconfidential  notes that Washington is “hiding” inflationary statistics.

“According to government statistics, inflation was held to just 0.6% during the first seven months of 2015. Unfortunately, that data disregards the most basic items that everyone uses, including food and energy costs… (Alternative non-government measures of inflation tell a completely different story. The Chapwood Index is an alternative inflation indicator that looks at the unadjusted costs and price fluctuation of the top 500 items that Americans spend their money on in the 50 largest cities in the country. (Source: chapwoodindex.com, last accessed September 22, 2015.) The index looks at the fluctuations in the cost of items such as Advil, Starbucks coffee, insurance, gasoline, tolls, fast food restaurants, toothpaste, oil changes, car washes, cable TV and Internet service, cellphone service, dry cleaning, movie tickets, cosmetics, gym memberships, home repairs, piano lessons, laundry detergent, light bulbs, school supplies, parking meters, pet food, and People magazine.For example, in 2014, the [official consumer price index] CPI rose 0.8%. But according to the Chapwood Index, major cities like New York, Los Angeles, Chicago, San Diego, and Boston saw inflation for the trailing 12 months (through to June of this year) run over 10%.”

Ignoring real inflationary numbers has a dire effect on senior citizens, who have suffered through more years without a cost of living increase in their social security checks than at any other time in living memory.

Republicans have been sharply critical of the President’s economic policies. GOP candidate Donald Trump uses the worrisome economic statistics as a bludgeon against opponent Hillary Clinton, who has pledged to continue the Obama legacy. His web site states:

“… let’s look at what the Obama-Clinton policies have done nationally.Their policies produced 1.2% growth, the weakest so-called recovery since the Great Depression, and a doubling of the national debt.

“There are now 94.3 million Americans outside the labor force. It was 80.5 million when President Obama took office, an increase of nearly 14 million people. Home ownership is at its lowest rate in 51 years…

“Nearly 12 million have been added to the food stamp rolls since President Obama took office. Another nearly 7 million Americans were added to the ranks of those in poverty.

“We have the lowest labor force participation rates in four decades. 58 percent of African-American youth are either outside the labor force or not employed. 1 in 5 American households do not have a single member in the labor force…Meanwhile, American households are earning more than $4,000 less today than they were sixteen years ago.”

While substantial disagreement exists about the remedies that should be applied to America’s broken economy, the reality that a crisis exists is one which has fairly widespread support.

Seniors Adversely Affected as Federal Funds are Diverted

America’s seniors are suffering as federal funds are diverted to questionable uses.

As America’s national debt rapidly soars to the $20 trillion mark (it currently stands at over $19 trillion) key needs are facing a lack of funds, and Americans relying on Social Security and Medicare are the most directly affected.  The problems are not just the future insolvency of those programs. The impact has already been felt.

The Social Security Administration (SSA) projects that “Social Security’s Disability Insurance (DI) Trust Fund now faces an urgent threat of reserve depletion, requiring prompt corrective action by lawmakers if sudden reductions or interruptions in benefit payments are to be avoided. Beyond DI, Social Security as a whole as well as Medicare cannot sustain projected long-run program costs under currently scheduled financing.”

Social Security will face virtual bankruptcy by 2034. Medicare will endure the same fate by 2030.

But those future dates are not the extent of the problem. During the Obama Administration, seniors have been subjected to an unprecedented lack of cost of living increases.

Since the regular program of Cost of Living increases began in 1975, (prior to that increases were provided by legislation) there has never been a period when such adjustments were lower than they have been under President Obama’s term. Not once had there been a year in which there was no increase at all. Since 2009, two consecutive years, 2009 and 2010, provided no adjustments, and there was also no adjustment in 2015.  Before 2009, the average annual increase was 4.4%; during the Obama presidency, it was 1.7%.

Social Security Cost-Of-Living Adjustments

(Chart provided by the Social Security Administration

Year COLA
1975 8.0
1976 6.4
1977 5.9
1978 6.5
1979 9.9
1980 14.3
1981 11.2
1982 7.4
1983 3.5
1984 3.5
1985 3.1
1986 1.3
1987 4.2
1988 4.0
1989 4.7
Year COLA
1990 5.4
1991 3.7
1992 3.0
1993 2.6
1994 2.8
1995 2.6
1996 2.9
1997 2.1
1998 1.3
1999  a 2.5
2000 3.5
2001 2.6
2002 1.4
2003 2.1
2004 2.7
Year COLA
2005 4.1
2006 3.3
2007 2.3
2008 5.8
2009 0.0
2010 0.0
2011 3.6
2012 1.7
2013 1.5
2014 1.7
2015 0.0

It’s not just Social Security problems that are affecting America’s seniors. Medicare has taken a hit, and the problem has been accelerated and worsened due to Obamacare.  Three examples of how Obamacare hurts seniors are provided by The Daily Signal:

 1) Huge payment reductions that reduce access to care. According to the Congressional Budget Office (CBO), Obamacare will reduce Medicare reimbursements by $716 billion over 10 years. These cuts will hit Part A providers such as hospitals, nursing homes, skilled nursing facilities, and hospices, along with Medicare Advantage plans. The trustees predict that if Congress allows these cuts to go into effect, 15 percent of Medicare providers would go in the red by 2019, 25 percent by 2030, and 40 percent by 2050…

2) Medicare “savings” are spent on other parts of Obamacare. As CBO plainly states, “CBO has been asked whether the reductions in projected Part A outlays and increases in projected [hospital insurance] revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.”

3) The ominous and looming power of IPAB.  When Medicare spending surpasses the target, IPAB will have to make recommendations to lower Medicare spending.

While America’s seniors, who have earned their Social Security and Medicare benefits through a lifetime of work, face cuts, questions arise about the diversion of federal funds to pay for benefits for illegal immigrants.

The Federation for Immigration Reform has estimated the cost of illegal immigration to U.S. taxpayers:

  • Illegal immigration costs U.S. taxpayers about $113 billion a year at the federal, state and local level. The bulk of the costs — some $84 billion — are absorbed by state and local governments.
  • The annual outlay that illegal aliens cost U.S. taxpayers is an average amount per native-headed household of $1,117. The fiscal impact per household varies considerably because the greatest share of the burden falls on state and local taxpayers whose burden depends on the size of the illegal alien population in that locality
  • Education for the children of illegal aliens constitutes the single largest cost to taxpayers, at an annual price tag of nearly $52 billion. Nearly all of those costs are absorbed by state and local governments.
  • At the federal level, about one-third of outlays are matched by tax collections from illegal aliens. At the state and local level, an average of less than 5 percent of the public costs associated with illegal immigration is recouped through taxes collected from illegal aliens.
  • Most illegal aliens do not pay income taxes. Among those who do, much of the revenues collected are refunded to the illegal aliens when they file tax returns. Many are also claiming tax credits resulting in payments from the U.S. Treasury.

The lack of priority the Obama Administration has given to the needs of seniors, while turning a blind eye towards the growing financial impact of illegal aliens, is a cause of deep concern.

(Note: We originally published this article on March 18. However, we were informed that many subscribers were not able to view it due to technical issues arising from a website update.) 

A candid discussion on American socialism

Do progressive policies actually accomplish solid results?

As several presidential candidates ask Americans to seriously consider an openly progressive agenda, it is appropriate to examine how that concept has fared in actual practice. The goals of the hard left are in line with President Obama’s desire to “fundamentally transform” America.

Throughout most of its history, the United States has experienced unprecedented economic growth and mobility though an essentially capitalist philosophy. Market conditions which encouraged growth and entrepreneurship allowed vast numbers of Americans to advance economically into the middle class and beyond.

As a possible reaction to the poor results of the Obama presidency, free-market advocates or conservatives have, according to the Gallup polling organization, outnumbered both moderates and liberals since 2009.

However, as presidential candidate Senator Bernie Sanders has openly identified himself as a socialist, and his Democrat opponents Hillary Clinton and Martin O’Malley have for the most part agreed with his policies in an attempt to solidify their support with the left wing of their party, the question of “fundamentally transforming” America from a free market to a progressive/socialist economy has risen to the forefront.

The progressive concept, which is essentially been the mantra of the currently ascendant left wing of the Democrat party.

Progressive policies can be distinguished from other programs such as Social Security and Medicare, which are essentially funds taken from individual paychecks then returned to the taxpayers at a later date when eligibility sets in. Progressive policies center on the concept of “redistributing” wealth from those who have earned or produced it to those who have not.

The late British Prime Minister Margaret Thatcher once remarked that ““The problem with socialism is that you eventually run out of other people’s money.”

As Geroge Will “America’s national character will have to be changed if progressives are going to implement their agenda…consider the data Nicholas Eberstadt deploys in National Affairs quarterly: America’s welfare state transfers more than 14 percent of GDP to recipients, with more than a third of Americans taking ‘need-based’ payments. In our wealthy society, the government officially treats an unprecedented portion of the population as ‘needy.’ Transfers of benefits to individuals through social-welfare programs have increased from less than one federal dollar in four (24 percent) in 1963 to almost three out of five (59 percent) in 2013. In that half-century, entitlement payments were, Eberstadt says, America’s ‘fastest growing source of personal income,’ growing twice as fast as all other real per-capita personal income. It is probable that this year, a majority of Americans will seek and receive payments. This is not primarily because of Social Security and Medicare transfers to an aging population. Rather, the growth is overwhelmingly in means-tested entitlements. More than twice as many households receive ‘anti-poverty’ benefits than receive Social Security or Medicare.”

It is appropriate to note that as those entitlement programs have soared, including a 41% in the supplemental nutrition assistance program (food stamps) social security benefits for seniors have suffered, enduring the lowest amount of cost of living increases on record. Indeed, the social security program itself is facing bankruptcy, since funds that should have gone to insure its solvency have been diverted to progressive programs.

A study of American cities and states where progressive concepts have been used provides an important glimpse into what results the growing trend towards socialist government can be expected to yield.

The Brookings Institute examined large U.S. Cities, and found that 90% of the most unequal cities have Democrat mayors, and have had them for extended periods of time.

Newt Gingrich, quoted in Front Page , has noted that “Every major city which is a center of poverty is run by Democrats. Every major city. Their policies have failed, they’re not willing to admit and the fact is it’s the poor who suffer from bad government.” Since 2013, of the large American cities with significant poverty rates, only Miami has had any experience with non-Democrats hands.

A study by United Way, “Struggling to Get By,” takes a hard look at how progressive policies have fared in California.  Among the key findings:

“One in three California families lacks income adequate to meet their basic needs.  One in three California households (31%) do not have sufficient income to meet their basic costs of living. This is nearly three times the number officially considered poor according to the Federal Poverty Level. Families falling below the Real Cost Measure reflect California’s diversity. One in five (20%) struggling households are white, so while poverty is often portrayed in our media and culture as primarily a problem for minorities, the reality is that families of all ethnicities struggle.”

By contrast, notes the American Legislative Exchange Council, (ALEC) “States that have adopted pro-growth policies have generally witnessed their economies grow, offering greater wage growth and more opportunities for citizens. Yet, despite years of empirical evidence supporting free market policies, some states choose a different path. …

“The empirical evidence and analysis … makes clear which policies lead to greater levels of opportunity and which policies are obstacles to growth. … This … concludes that pro-growth tax policy, that avoids picking winners and losers, provides a fair and competitive environment for all hardworking taxpayers. There are many policy obstacles that lawmakers face when trying to create a competitive economic environment… tools include lowering or eliminating the corporate and personal income taxes, reducing overall tax burdens, reducing or eliminating state death taxes, simplifying tax codes and supporting worker freedom. State policymakers [must] fix their budgets and address long-term pension liabilities.

“Generally, [ALEC’s latest] rankings show that [free market-oriented states]Utah, Wyoming, North Carolina, Florida and Texas are economic hotspots for growth. Furthermore, many of the no income tax states such as Nevada and South Dakota are also economically promising. On the other hand, most states in the Northeast and some states in the Rust Belt are facing economic decline. In the Rust Belt, Michigan, Indiana and Wisconsin deserve major credit for positive pro-growth reforms they have recently enacted after decades of poor policy choices. Additionally, Minnesota and Illinois both face significant fiscal challenges. the Northeast are even worse.”

Internationally, socialism has harmed the prosperity of the nations and peoples who have adopted it. The Foundation for Economic Freedom (FEE) notes: “Socialism is the Big Lie of the twentieth century. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny. Equality was achieved only in the sense that everyone was equal in his or her misery.”

The latest example is Greece. Jake Novak, writing for CNBC  eports “while Greece’s epic debt problems have dominated the news, I haven’t heard very much about who is to blame for what’s happened in that country. When any bank or other capitalist entity fails, the news media and the general public seem to name their favorite specific villains almost instantly. The word “profit” becomes dirty somehow and public figures start pining away for a more giving society that never was. But where is the condemnation of socialism and the failed politicians who peddled a proven failure of a system not only to the Greeks but to the half billion people who live in the E.U.? Where is the recognition that when the Greeks recently elected an even more leftist and socialist government, it sped up the path to collapse?”

The problems are not limited to the Old World.  In contrast to the largely capitalist USA, Latin America economies have been far more government-centered. Despite the inherent wealth of resources, many nations in Latin America fail to prosper. Daniel Wagner and CJ Post, writing in Huffington point out that “Even when times have been good, Latin America’s socialist countries have still failed to deliver meaningful political and economic reforms or effective public spending programs.”