Merv's Politically Incorrect Audio Blog

Notice the recent debate (and probably tonight's will) speak nothing of government debt and looming social security insolvency?

It's because both parties are socialist.

This scares me:



I curse you FDR for your ponzi scheme!

 

You are both wrong. Actually, these stats reflect of the aging population and more people collecting Social Security (and Medicare). A secondary factor may be the loss of jobs, e.g. manufacturing. Food stamps, aid, for the poor (wealth inequality argument) are actually a very small part of the government aid in the USA. There's a huge misconception that the US government hands out a lot to poor and needy people (because Elon Musk, Facebook guy, and Amazon guy are taking most of the pie). It actually doesn't. Uncle Sam gives jack shit to poor people and only takes from middle class working people.



Wealth inequality, which I have pointed out in prior posts, is certainly disturbing, but really is a totally different matter. Economists have many ideas on how to properly address this while keeping the economy chugging along.

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The immediate question is how does the USA continue to pay out entitlements when both candidates are afraid to reduce payouts and only speak of reducing taxes (corporate taxes, taxes on tips and social security income, etc.)? Yes, there was a time when only the GOP was willing to discuss, but those times are gone. The GOP doesn't want to lose the votes from @YMO neighbors in Florida.

The Social Security Trust fund is already paying out more than it takes in.


And the shit is projected to hit the fan in 10 years, which is not far away.


It’s disturbing this isn’t discussed during the debates. It’s as if there is some conspiracy to avoid the issue. Unlike addressing wealth inequality which would be complex, addressing Social Security funding can be fairly straightforward with quite a few options (one or more of the below):

1. Push retirement age (yet again), so @YMO can collect his social security at 75 or maybe 93.
2. Reduce benefits.
3. Increase earnings limit on the Social Security and Medicare taxes (currently capped at $168,000) of income.
4. Increase Social Security / Medicare tax rate (currently 15.3% shared between employee and employer)

The problem is that none of the above will be popular. Everyone seems to want social security, but no one wants to pay for it. Both presidential candidates don't want to talk about it. The media really doesn't want to bring it up (well except the WSJ at times) and both parties are more than happy that this issue is buried.

@Pancakes: I know you find it offensive the corporations and big banks get special treatment. I do too. I've written about the too big-to-fail thing only resulting in a handful of big banks and the destruction of community banks (thanks Dodd-Frank).

However, I find it offensive that young people are being taxed so that their money can go to older people who bought into the ponzi scheme before them. I doubt most of the SBAF demographic, including myself, is ever going to get the same benefit ratio as those before them. I know my dad who is 80 something is doing great with the social security payments.

Philosophically, I dislike the idea of young people supporting old people. It should be the other way around. Back in the 80s, my parents would be shocked when they heard of kids having to work full time to pay for college, muttering: what the f**k is wrong with their parents - what the f**k is wrong with Americans.

Now as far as the TARP money. You don't know what you are talking about. There was a decent chance that at dozen major banks would have failed (the only big one that was healthy I think was Wells Fargo). If this happened, welcome to the World War Z in the USA (and the rest world) because the world runs on credit. Companies and small businesses not able to get loans. People not able to get car loans or home mortgages. The world as we knew it could have ended.

The TARP money was used to purchase equity of the banks to give them time to ride it out. The government made a few billion after they cashed out. Hardly corporate socialism or "bail-out". Think of it as a emergency payday loan from Uncle Sam - it's just the way banks work and how they need to keep a reserve. I was a banker (compliance and audit) from 2002 to 2013.

Now how the small banks got screwed from TBTF and Dodd-Frank, that's another story. I actually met Senator Dodd. He apologized after he found out I lost my job in community banking (I suspect his aids may have briefed him). "Sorry about Dodd-Frank, but we're doin' something about it now." he said in a folksy way. (Gawd, I hate politicians).

P.S. We could have topped off the Social Security trust fund if we didn't spend trillions over two decades to try to convert the Taliban into Western democracy people. Trying to convert hardcore Sharia law Islamists into Western democracy people is like trying to make gay people straight. I don't know why we thought we could have done this. I blame American Exceptionalism.

 

Reagan was the portent of things to come but not the cause of the decline of unions. Union membership was already on a massive decline since the 50s, well before Reagan fired all the air traffic controllers in 1981*.

Yes, there was a sharp decline in union membership in the 80s, but union membership declined not because of Raygun. The professional class / white collar class rose while blue collar employment decreased. Think yuppies of the 80s, MBAs, managers, engineers, budding computer scientists, etc. The USA basically had a monopoly on so many things during the 50s and 60s: cars, mainframes, airplane, trains, appliances, etc. However by the 70s, the rest of the world started to catch up and the globalization thing slowly started**.

Heck, there wasn't even much of a decline in union membership from when China joined the WTO and we started offshoring our manufacturing. Unions were basically dead before the end of the Clinton era. FWIW, I'd also put Clinton along with Raygun on socialism for the rich and trickle-down. Clinton got elected partially because he co-opted part of the GOP platform and this pissed the GOP off. Hey, at least Clinton / Newt balanced the budget - a surplus even. The wars in the 90s we got in were limited in scope with goals accomplished, e.g. Serbia / Kosovo.

*I believe it is actually law that Federal employees cannot strike as it would interfere with the operation of a federal agency (can't have this happening for obvious reasons). Just hat no one believed Raygun would do it, fire them, which he did. The ATCs were just asking for it.

** This is why the actors and writers who "won" the strike actually lost. I made a joke that there would be an NCIS Southampton (UK) because this would be a UK union show (less bitchy, more reasonable asks, better attitude). Turns out there is a NCIS Sydney. I laughed so hard when I found out. 100% non-union production. Making shows is a global endeavor. Also there's the aftermath. I just get the sense that big Hollywood studios and streamers are so sick of the union members (El Lay attitude) that they are moving production to New Mexico and Atlanta, possibly with non-union productions. I post production company is in shitter. Many El Lay lots are ghost towns, but Pinewood in Atlanta and UK are super busy. We've been closing offices. I expect to lose my job at the post company after the downsize is complete. We are not General Motors with union workers and influence, so I don't expect a government bailout.