Posts Tagged ‘Social Security’

Captain Rick: Walmart, the world’s largest corporation turns everything it touches into gold, whereas  the U.S. government has succeeded in breaking almost every good program created … and the U.S. economy.

I suggest we hire Walmart to fix the mess that our President and Legislature have demonstrated they are totally incapable of accomplishing.

My email to President Obama:

Mr. President,

I have concluded that you and the 535 members of our legislature are ineffective and incapable of fixing our economy and the many good programs that have been broken. I have a solution, but first I want to remind you of some facts which relate to the many failures of your administration and those that preceded:

a. The U.S. Postal Service was established in 1775. You have had 238 years to get it right and it is broke.

b. Social Security was established in 1935. You have had 78 years to get it right and it is broke.

c. Fannie Mae was established in 1938. You have had 75 years to get it right and it is broke.

d. War on Poverty started in 1964. You have had 49 years to get it right; $1 trillion of our money is confiscated each year and transferred to “the poor” and they only want more…and it is broke.

e. Medicare and Medicaid were established in 1965. You have had 48 years to get it right and they are broke.

f. Freddie Mac was established in 1970. You have had 43 years to get it right and it is broke.

g. The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 36 years to get it right and it is an abysmal failure…and it is broke.

You have failed to fix any of the many government service failures, while overspending our tax dollars to drive America $17 trillion into debt, an amount exceeding the combined debt of all other nations on earth.

AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM?

Lets pause and examine an American corporation that has a track record of turning everything it touches into gold.

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Photo above shows Walmart’s current logo used since 2008

Walmart was founded by Sam Walton in 1962…when I was in high school, just before the birth of Medicare and Medicaid. Since then the Walton family transformed it into the world’s largest corporation with $469 Billion in revenue, 8500 stores in 15 countries with 2,200,000 employees.

If Walmart were a country it would have the world’s 26th largest GDP…but more importantly, it would be the world’s most profitable country…unlike the U.S. which goes $1 Trillion farther into debt each year, with all of its programs on ‘death row’.

I love my country and hate to see you and our legislature destroying it. With all sincerity, I respectfully urge you to consider hiring Walmart to manage America’s failing economy and programs. But, I think that if that were to happen, the Walton’s would fire you and most of the legislature.

Captain Rick

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Associated ATRIDIM NEWS JOURNAL Report Categories:

Economy

U.S. Debt Crisis

Captain Rick’s Fiscal Cliff Course 101

President Obama

Obamacare

Entitlement Reform

Corporations

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Captain Rick: U.S. entitlement programs are going broke. Disability will be broke by 2016, followed by Medicare by 2024 and Social Security by 2035. These sobering projections were made by the U.S. Social Security Administration. This report presents an in-depth study of the U.S. Disability program.

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Disability recipients in jeopardy
Nearly 11 million people depend on federal disability payments.
Unless changes are made, beginning in 2016, the revenues coming in would not be sufficient to cover all of the disability payments.
Unless taxes are increased, disability benefits will have to be cut or the number of claimants reduced.

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Disability soared 27% since the beginning of the Great Recession
The number of people collecting federal disability has soared to nearly 11 million, up from 8.7 million in April 2007.
The federal government spent nearly $250 billion in 2011 paying more than 23 million Americans some type of disability claim. That’s about 7% of the overall population, and 16% of the workforce.

Causes for the Disability Program Increase
The Great Recession pushed many people into the disability program because it was a safety net to save them from economic disaster.
The aging of the baby boomer generation is one of the primary drivers. Workers typically enter the disability program in their 50s.
Disability claims among veterans are up 28% since 2008, according to the Department of Veterans Affairs.
With better surgical techniques and body armor, soldiers are ten times as likely to survive today’s wars, according to the Veterans Administration. But soldiers often come home with severe injuries. The recent decision to recognize post traumatic stress disorder as a disability has also lifted the number of benefits claims. The Veterans Administration noted that illnesses tied to the cancer-causing chemical defoliant Agent Orange used in Vietnam are also now viewed as a disability.  
More women have entered the workforce in recent decades, making them eligible for the program should they become disabled.

Americans are abusing the system because of the ease of entering the program. It’s morphed from a program that pays benefits to stroke victims and cancer patients to people with mental illness and chronic pain.

Prognosis for a Disability Program Solution
The disability program … the smallest of the three, will be the first that Congress has to deal with.
There is not much consensus about entitlement reform on Capitol Hill these days. Attempts to rein in Medicare spending have gone nowhere recently.

Disability Program Solution Possibilities

Solution 1
Congress could authorize increasing the amount of payroll tax supporting the disability program from its current 1.8%. An increase paid by workers and employers by 0.2% each would keep the program solvent for 75 years. But there’s little appetite among lawmakers to raise taxes these days.

Solution 2
Congress could authorize increasing the share of Social Security payroll tax going toward disability, instead of Social Security. Currently, the combined rate paid by employers and workers is 12.4%. The disability program’s rate is 1.8%, while the retirement system’s rate is 10.6%. Congress could authorize increasing the share going toward disability payments to 2.6% for two years and then slowly cut it back to 1.8% by 2030. This would keep the disability fund solvent until 2033, but it would shorten the retirement system’s predicted lifespan by two years, to 2033.

Solution 3
Congress could take the most controversial approach by raising the bar for eligibility for disability benefits.

Captain Rick’s Disability Solution Preference: I believe Solution 3 is the most intelligent solution … but considering how welfare-oriented the U.S. Congress is becoming, I do not hold much hope for this solution. I believe Congress will take the most cowardly path … Solution 2 … and rob money from Social Security to pay the rapidly expanding crowd who are abusing Disability. Do you agree/disagree? I welcome you to comment below.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Associated ATRIDIM NEWS JOURNAL Report Categories:

Entitlement Reform: https://atridim.wordpress.com/category/entitlement-reform/

Medicare: https://atridim.wordpress.com/category/medicare/

Social Security: https://atridim.wordpress.com/category/social-security/

Medicaid: https://atridim.wordpress.com/category/medicaid/

Tax Reform: https://atridim.wordpress.com/category/tax-reform/

Captain Rick: Federal grants are a good thing when they are funded by real money … but the fact is many of America’s federal grants come from money that does not exist and adds directly to the U.S. national debt. Many federal grants are robbing the future of our children and grandchildren by burdening them with monumental debt.

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U.S. Budget Facts

U.S. Tax Revenue: $2.5 trillion
U.S. Spending: $3.6 trillion
U.S. Deficit: $1.1 trillion

U.S. Budget Details

Obligated expenses (backed by U.S. law)
Social Security: $781 billion (dedicated funded from the Social Security 6.2% payroll tax)
Medicare: $419 billion (dedicated funding from the Medicare 1.45% payroll tax)
Medicaid: $400 billion (a social welfare program, using money from the federal general fund)
Interest on National Debt: $223 billion (mandatory debt payment to prevent U.S. default)
Federal Pensions: $216 billion (includes civilian and military retirement benefits and veteran benefits)
Sub total: $2 trillion (this leaves only $500 billion for all other expenses before consuming all U.S. tax revenue)

Discretionary expenses:
Defense/Wars: $664 billon
Income Security: $352 billion (incudes unemployment compensation, various welfare programs such as family support and nutrition programs and earned income credits)
Other (including Federal Grants): $500 billion
Grand total: $3.6 trillion (a deficit of $1.1 trillion)

Conclusion: it is obvious that unless America wants to totally eliminate all money spent on defense, wars, unemployment, family welfare, etc. there is no tax revenue left to spend on any federal grant of any kind.

U.S. National Debt

America’s debt is now at a staggering $16.8 trillion and rising at a high rate of speed.
America’s debt represents a debt of $53,277 for every person in America…$148,265 for every tax payer.

Its time for everyone in America realize the seriousness of America’s debt crisis … including local and state politicians who love to accept those federal grant dollars that come from the ‘black hole’ and add directly to the U.S. National Debt.

Federal Grants 101

In the United States, federal grants are economic aid issued by the United States government out of the general federal revenue. A federal grant is an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States.

Some federal grants like those from the U.S. Department of Transportation for roads and transportation projects are partially funded by dedicated fuel and tire taxes, however the balance (about 1/3) comes from the general fund which is supported primarily by federal income taxes via tax returns. On the other hand, federal grants like community development block grants (CDBG) from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Homeland Security (DHS), have little or no dedicated tax funding and are mostly paid for by money in the general fund. Because the U.S. general fund runs a negative balance of $1.1 trillion each year…in essence, all federal grants not specifically funded by special taxes are adding directly to the U.S. national debt.

Federal grants are defined and governed by the Federal Grant and Cooperative Agreement Act of 1977, as incorporated in Title 31 Section 6304 of the U.S. Code.

A Federal grant is a
legal instrument reflecting the relationship between the United States Government and a State, a local government, or other entity when
1) the principal purpose of the relationship is to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government; and
2) substantial involvement is not expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.”

Types of grants
Block grants are large grants provided from the federal government to state or local governments for use in a general purpose.
Project grants are grants given by the government to fund research projects, such as a research project for medical purposes.
Formula grants provide funds as dictated by a law. Categorical grants may be spent only for narrowly defined purposes and recipients often must match a portion of the federal funds.
33% of categorical grants are considered to be formula grants. About 90% of federal aid dollars are spent for categorical grants.
Earmark grants are explicitly specified in appropriations of the U.S. Congress.
They are not competitively awarded and have become highly controversial because of the heavy involvement of paid political lobbyists used in securing them.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

Federal Grants: https://atridim.wordpress.com/category/federal-grants/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Fiscal Cliff 101: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

Captain Rick: The U.S. managed to crawl out of the GDP recession zone in its ‘final’ report for Q4 2012 to post a dismal 0.4% GDP, second worst since the end of the Great Recession in 2009. The first estimate in January reported –0.1% GDP, in the recession zone. 

GDP (Gross National Product) is the broadest means of quantifying the health of an economy.

In my previous GDP report, I stated: “If Congress gets tough and addresses the debt crisis head on, I suspect it will present a deeper, temporary plunge into negative growth territory. If Congress continues to ‘kick the can down the road’, I suspect we will see less of a dive in GDP early on…but will set the stage for a much deeper dive in a year or two…possibly as deep or deeper than the ‘Great Recession’ of 2008-2009”.

The U.S. Congress passed and President Obama signed legislation to “kick the debt can down the road” AGAIN as reported in my previous post. While these actions have no effect on GDP for Q4 2012, they will effect GDP for Q1 2013 and beyond.

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The red line in the chart above indicates the 3% level that the U.S. GDP must maintain to keep up with population growth. GDP has been far short of that for many years. In spite of the positive hype we are hearing in the mainstream news media, America is traversing extremely dangerous economic waters. Hype does not fix problems… credible action does. Unfortunately the world is seeing ‘zero’ credible action out of the politicians who represent the citizens of the United States of America.

Prognosis for the future…where are we headed?

I see several troubling economic factors that parallel the times leading up to the ‘Great Recession’. The world stock markets have reached a new high, passing those reached just prior to the stock market crash of 2008. Like then, I see no justifiable reason for the market rise. Today’s market reminds me of a bunch of gamblers in Vegas looking for a place to throw all of their dollars to bet it all. The market is again inflating into a balloon ripe for explosion. Real estate prices have been climbing at a fast pace, as is real estate speculation…similar to that witnessed prior to the bursting of the real estate bubble, prior to the Great Recession. I can not predict how much farther things can go before a repeat of 2008 occurs…or perhaps worse, but I feel that a down slide is coming soon. Much will have to do with congress’s handling of the debt crisis (very dismal at this point). It will be further complicated by the multi-trillion dollar cost of Obamacare (the worlds greatest socialized, welfare medical program). In addition, we must remember that multi millions of baby boomers are beginning to collect Social Security from a trust fund that has been totally robbed of funds to finance the U.S. Government and its politician’s thirst for deficit spending. It will all play out in a very ugly scene before the world’s eyes during the next few years.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/

Captain Rick: If the U.S. Federal Government was in control of your household budget, you would be in serious financial trouble!  I have prepared this simple comparison to show you why:

Annual Financial Statement of the United States of America:

U.S. Tax revenue: $ 2,170,000,000,000

Federal budget: $ 3,820,000,000,000

New debt: $ 1,650,000,000,000

National debt: $ 16,571,000,000,000

Interest on the National debt: $ 222,800,000,000

Recent budget cuts: $ 38,500,000,000

Let’s now remove 8 zeros and pretend it’s an annual household budget:

Annual family income: $ 21,700

Money the family spent: $ 38,200

New debt on the credit card: $ 16,500

Outstanding balance on the credit card: $ 165,710

Interest on the credit card: $ 2,228

Total budget cuts so far: $ 385

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What would happen if the bank froze your credit card, preventing more debt?

Can you imagine how bad your budget would be if you were spending $16,500 more each year than you received in income? The interest on your credit card balance would be $2,228 this year and would be added to your massive balance of $165,710. Each year your debt is growing larger at a rapid rate.

Now, suppose your bank lost faith in your ability to pay your balance. Its easy to guess that your bank will freeze your credit card, allowing no further debt. How will you pay the $16,500 in expenditures that were beyond your budget?  How will you make your loan payments, or even pay the $2,228 in interest on your credit balance? You would probably be left with one choice…declare bankruptcy. Luckily, you would have the U.S. Federal Government (Uncle Sam) to excuse your debt and allow you a new financial start.

What would happen if the bank froze Uncle Sam’s credit card, preventing more debt?

The situation with Uncle Sam’s budget is identical to yours, only exponentially larger. However, there is a large difference in who controls the credit. Uncle Sam’s debt is not held by a bank. It is held by a large number of investors, investing firms and countries all around the world. Japan and China hold a large portion of America’s debt. It is highly unlikely that all of the creditors would freeze Uncle Sam’s credit all at once. But, supposing one day China or Japan lost faith in Uncle Sam’s ability to repay their investment…or even the interest on it? Its easy to guess that they would stop further investments in the U.S. federal government.

When a large enough source of new investment is stopped, how will Uncle Sam finance America’s programs which count on $1.65 trillion of borrowed money each year? How will it repay its debt to investors…or even pay the $223 billion in interest on the balance? Unfortunately bankruptcy is not an alternative for Uncle Sam. There is no bigger entity to bail it out or give it a fresh financial start. Its only remaining option will be to reduce payments to various programs so that it stays within the limits of new debt which can be sourced. It could also mean that the U.S. would have to default on its debt owed. This in return would most certainly stop most, if not all of America’s creditors from making further investments. This would worsen the situation and virtually force America to live within its budget, drastically slashing its programs by $1.65 trillion per year. Programs like Social Security, Medicare, Medicaid and Defense would most certainly be significantly affected, as they are the largest budget items. Such massive cuts would most certainly cast America into a deep recession, probably far worse than the Great Recession a few years ago.

Captain Rick’s Solution Scenarios

Maintain Current Course of Deficit Spending with only small, token reductions:

This is not an acceptable solution. It will lead to failure of America’s financial system within a few years. The cost of America’s entitlement programs like Social Security, Medicare and Medicaid are growing in size at an astronomical rate. In a very short time these three programs will consume 100% of all Federal Tax Income, leaving nothing to support the entire balance of the government without deficit spending. With this course, its not a matter of IF the world’s creditors will cut off America’s credit…but WHEN.

Balance the U.S. budget within 10 years:

This is the course America must take if it is to survive. The Fiscal Cliff had a goal of cutting half of the deficit spending 10 years. That was a good start, but congress cant even achieve it. Congress continues kicking America’s debt can down the road, agreeing on allowing only token spending reductions and tax increases. America must do better…soon!

It will require major spending reductions affecting all programs and tax revenue increases across the board. It will also require significant entitlement and grant program reform. The days of Uncle Sam handing out money with a blindfold on must end soon.

Does America have the ‘guts’ to make these sacrifices? Time will tell…but time is running out quickly. I hope for our children’s sake that America gets its act together soon or our kids will likely find themselves living one day in a third world country.

I welcome your comment and hope you will share this with your friends via one of the means I have provided. Together, our voice can make a difference.

More Info:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Captain Rick: 2012 is drawing to a close with no congressional deal in sight, which means the ‘Fiscal Cliff’ will happen automatically, by law, on January 1, 2013. The ‘Fiscal Cliff’ is a combination of the expiration of temporary tax cuts and spending extensions and other spending cuts from laws passed previously. In total, it reduces half of Americas deficit ($600 billion per year…approximately $7 trillion over the next 10 years). Previous laws allowed America’s staggering national debt to be raised to keep the U.S Government running in exchange for the ‘Fiscal Cliff’ if the congressional appointed ‘super committee’ did not produce a better solution. No agreeable alternative solution was found, as appears likely with current negotiations…so America will most likely witness the ‘Fiscal Cliff’, by law, on January 1, 2013.

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‘Fiscal Cliff’ Solution Scenarios:

Scenario of Congress agreeing to stop, postpone or ‘water down’ (lower) the ‘Fiscal Cliff’

Captain Rick’s chances of this happening: Near 0%

Captain Rick’s rating for such action: “F” (FLUNK)

Captain Rick’s prognosis: While this is what is being portrayed by the news media as the best solution, it is mathematically impossible and fiscally irresponsible…because America’s National Debt Clock continues to tick. Its just a short time before America will need to raise the debt ceiling again, because it spends $1.2 trillion more per year than it receives in revenue. That will foster ‘Fiscal Cliff 2’…perhaps twice as high as ‘Fiscal Cliff 1’. Keep in mind that even if America were to balance its budget (a far off dream), it would be left with its staggering debt of $16.2 trillion and its annual interest of $258 billion, the 5th largest U.S. expenditure of tax revenue. This money is paid to America’s debt holders…the largest being Japan and China.

Scenario of America going over the ‘Fiscal Cliff’

Captain Rick’s chances of this happening: Near 100%

Captain Rick’s rating for such action: “B” (Best possible current solution, but America can and must do much better in the future)

Captain Rick’s prognosis: As horrible as the news media has made the ‘Fiscal Cliff’ sound, it is Americas best hope to get ‘back on track’ to prosperity. Yes, it might mean a small drop in GDP and small rise in unemployment…but that is far better than a large drop in GDP and large increase in unemployment and possible recession or even depression a few years from now if America does not confront its extremely serious debt problem ‘head on’ NOW.

Captain Rick’s hope for the future of America

Once we go over the ‘Fiscal Cliff’ and begin to realize the shock of it all, our Congress needs to ‘come to bat’ for America and produce constructive legislation to fix a few urgent, very serious problems like the Medicare ‘Doc Fix’. Historically congress provides for a periodic ‘cost of living’ adjustment for reimbursement to Medicare doctors. This years adjustment has been stopped by the ‘Fiscal Cliff’. If this is not fixed, eventually many doctors might stop seeing Medicare patients, leaving them without a doctor. Congress will also need to begin serious reform to its entitlement programs…Medicare, Medicaid, Social Security and federal pensions, which have expenditures growing at astronomical speed in comparison to tax revenue. The U.S. fiscal problem is monumental and deserves our immediate attention now, in an effort to ward off significant fiscal failure of the U.S. with a ripple effect to the entire world in years to come.

View Captain Rick’s entire FISCAL CLIFF Course 101: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

Captain Rick: The ‘Fiscal Cliff’ is a monumental financial challenge that faces the U.S. and all Americans on January 1, 2013. $7 Trillion in tax increases and spending cuts will begin. The only thing that can stop them from taking affect is for congress and the president to come to an agreement before January 1, 2013. That is not likely with America’s current slate who are in gridlock. A change of faces in D.C. as a result of the November election could improve matters.

Short of a miracle to break Washington D.C. gridlock, on January 1, 2013 the $7 Trillion ‘Fiscal Cliff’ will take place. This is what I anticipate:

Defense will be cut $55 billion in 2013, 10%. I believe our defense department is overloaded with inefficiency and waste beyond 10%. Perhaps this will help our defense department to become more efficient in the expenditure of tax payer funds.

Non-defense will be cut $55 billion in 2013, 10%. Non-defense includes education, Medicaid, food inspections and air travel safety and Medicare. Perhaps this will help all of these departments to become more efficient in the expenditure of tax payer funds.

Bush era tax cuts will end. These tax cuts were stupid and reckless and should never have been implemented. In view of the poor state of the American economy, they should end.

Obama’s Payroll tax holiday will end. The Social Security tax rate reverts to 6.2%, up2%. This tax cut was stupid and reckless and should never have been implemented. It has robbed the Social Security trust fund and shortens the time before the fund become insolvent. This reduction was stealing promised receipts from Social Security trust fund of all elderly Americans. This tax holiday must end.

Unemployment benefits will revert back to the old norm of 26 weeks, down form the current 99. It worked for the better part of the last century. It can work again. The solution to put America back to work will not be accomplished by providing long term unemployment benefits. We need a plan to grow our economy, which will create new jobs.

Medicare Doc Fix expires. Payment to care providers will drop 2%. This is not a problem for people on original Medicare…only those that subscribe to the plans offered by the insurance companies…ones I think should be put out of commission or figure out a way to provide Medicare for the same price the government pays for original Medicare…without the 20% subsidy the insurance companies are receiving now.

The bottom line is that America has been floating on so much fat for so many years. We can and should give up the fat. The ‘Fiscal Cliff’ will have a large impact on those who abuse tax dollars. It will have a minimal effect on honest, hard-working Americans.

It is no secret that America has been living ‘high on the hog’ … well beyond its means for many years. The time has come to pay the price. We either do it now in a constructive manor or pay a much steeper price later…one that could convert the United States of America to a third world country in the not to distant future.