The sad truth about Social Security

Please hide this particular article from any young hopenchangers who suffer from the delusion that Social Security will be around when they're ready to retire.

Social security is not earned retirement income, an entitlement nor a benefit.

Many people believe that Social Security is an “earned right.” That is, they think that because they have paid Social Security taxes, they are entitled to receive Social Security benefits. The government encourages that belief by referring to Social Security taxes as “contributions,” as in the Federal Insurance Contribution Act...

...However, in the 1960 case of Fleming v. Nestor, the U.S. Supreme Court ruled that workers have no legally binding contractual rights to their Social Security benefits, and that those benefits can be cut or even eliminated at any time.

Nestor sued, claiming that because he had paid Social Security taxes, he had a right to Social Security benefits.

The Supreme Court disagreed, saying “To engraft upon the Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands.” The Court went on to say, “It is apparent that the non-contractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.”

The Court’s decision was not surprising. In an earlier case, Helvering v. Davis (1937), the Court had ruled that Social Security was not a contributory insurance program, saying, “The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.”

In other words, Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other. Your Social Security benefits are always subject to the whim of 535 politicians in Washington. Congress has cut Social Security benefits in the past and is likely to do so in the future...

Unfortunately for the drones (i.e., the Obama Cultists), the math always defeats the political rhetoric. Always. And the fuse on the fiscal time-bomb is fizzling away, without any of our leaders making the slightest effort to douse it.


Hat tip: R.F.

The 10 Stats You Should Never Show a Baby Boomer

ECB has 35 stats you may want to hide from any baby boomers you know. You may ask: Doug, of those 35, which are... the... 10... most... terrifying entertaining?

10. Right now, there are somewhere around 40 million senior citizens in the United States. By 2050 that number is projected to skyrocket to 89 million.

9. 25 percent of all Americans in the 46 to 64-year-old age bracket have no retirement savings at all.

8. 46 percent of them have less than $10,000 saved for retirement.

7. Elderly Americans tend to carry much higher balances on their credit cards than younger Americans do.

6. Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.

5. In 1945, there were 42 workers for every retiree receiving Social Security benefits. Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

4. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

3. Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for each and every household in the United States.

2. State and local government bodies in the state of California have 325 billion dollars in combined unfunded pension liabilities.

1. The total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

Bottoms up!

Good News: More and More Seniors Face Reduced Social Security Payments Because They're Late on... Student Loans

Seniors are rightfully concerned about the horrific damage that Obamacare does to Medicare.

Well, the hits just keep on coming.

It turns out that the government's incessant meddling with the student loan business has not only spiked college tuition prices, but those loans are now slamming seniors in addition to kids.

According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds. That’s nearly double the pace of the department’s enforcement in 2011; it’s up from around 60,000 cases in all of 2007 and just 6 cases in 2000.

Many of these retirees aren’t even in hock for their own educations. Consumer advocates say that in the majority of the cases they’ve seen, the borrowers went into debt later in life to help defray education costs for their children or other dependents.

...Roughly 2.2 million student-loan debtors were 60 and older during the first quarter of 2012, and nearly 10% of their loans were 90 days or more past due, up from 6% during the first quarter of 2005, according to the Federal Reserve Bank of New York. “It’s really a unique problem we haven’t had to face before, and it’s only going to grow,” said Robert Applebaum, founder of Student Debt Crisis, a nonprofit advocacy group in Staten Island, N.Y.

The threat of Social Security cuts adds to the overall financial woes faced by the aging baby boomer generation. Almost 45% of people aged 48 to 64 won’t save enough money to cover basic needs and uninsured health care costs in retirement, according to the Employee Benefit Research Institute. Experts say reducing Social Security benefits could set them back even more.

...Compared to present-day retirees, younger generations are in deeper debt, which means stories of Social Security garnishment could become more commonplace when they enter retirement. Borrowers in their 20s and 30s owe roughly $600 billion, according to the New York Fed. They’re also leaving college with more debt than their predecessors: 66% graduated this spring with debt, and their student loans averaging $28,720, up from $9,320 in 1993, according to FinAid.org.

Th-th-th-th-th-th-at's Obamanomics, folks!


Hat tip: BadBlue.com/Money.

Pass this along to a teenager: this is 'one sick labor market'

Some brutal facts from David Rosenberg as relayed by Tyler Durden.

• The share of long-term unemployment is at its highest level since the Great Depression (42%).

• Fully 54% of college degree graduates under the age of 25 are either unemployed or underemployed.

• 45 million Americans are on food stamps — one in seven residents.

• 47% of Americans are on some form of government assistance.

• The employment-to-population ratio for 25-54 year olds is now 75.7%, lower than it was when the recession supposedly ended in June 2009.

• The number of people not in the labour force has swelled eight million since the recession ended; absent that effect, the unemployment rate would be 12% right now (about the same as President Obama's election chances would be).

• The number of people confident enough to leave their jobs fell 11% in May for the second month in a row to 891k, the lowest since November 2010.

• The ranks of the unemployed who have been looking fruitlessly for work for at least 27 weeks jumped 310,000 in May, the sharpest increase since May 2011.

• The unemployment rate for males aged 16-19 is 27% and for males between 20 and 24 it is 13%. Draw your own conclusions from a social (in)stability standpoint.

• One in seven Americans are either unemployed or underemployed...

...A mere 16% of the 2009-2011 graduating class has found full-time work, while 22% are working part-time. Even those hired from 2006-08, just 23% are working full-time.

According to a poll cited in the NYT, just 14% of high-school grads today believe they will have a more successful financial future than their parents Line of the day, as depressing as it is, comes from an 18-year old: "Thank God I had a buddy at Burger King who could help me out".

According to Rasmussen, Obama's approval rating has dipped to only 24 percent.

In spite all of this, America's young people -- who have been hammered by Obama's destructive economic policies -- still overwhelmingly support the SCOAMF. So you and I have a lot of education to do between now and the election.

America's youth are literally having their future earning power plundered by the reckless, record deficit spending of Obama and his sycophants.

Ephemeral dreams of an ideal society

Can Americans trust the claims of temporary politicians who promise that their grand dreams and intricate plans will solve humanity's most vexing issues?

Consider their track record...

Social Security

THEN: President Franklin Delano Roosevelt, 14 August 1935, Washington, D.C.:

Today, a hope of many years' standing is in large part fulfilled. The civilization of the past hundred years, with its startling industrial changes, had tended more and more to make life insecure. Young people have come to wonder what will be their lot when they came to old age. The man with a job has wondered how long the job would last...

...This social security measure gives at least some protection to 50 millions of our citizens who will reap direct benefits through unemployment compensation, through old-age pensions, and through increased services for the protection of children and the prevention of ill health...

...It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness...

NOW: Social Security Is Failing Even Faster Than We Thought:

In last year's Trustees Report, the Social Security Administration warned that the program's trust fund was likely to run out of money in 2036, leading to deep cuts in benefits. If that weren't bad enough for anyone expecting to be alive then, a more recent projection from the Congressional Budget Office paints a much worse picture.

This year's CBO report forecasts that by the end of this decade, the combined Social Security Old Age and Disability Trust Funds will be about $800 billion smaller than last year's SSA projections. That's a very substantial drop -- and a sign that this year's Trustees Report will likely bring another downward revision to the year it expects those Trust Funds to dry up and benefits to be cut.

Medicare

THEN: President Lyndon Baines Johnson, 30 July 1965, Washington, D.C.

...No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years... And no longer will this Nation refuse the hand of justice to those who have given a lifetime of service and wisdom and labor to the progress of this progressive country...

...During your working years, the people of America--you--will contribute ... a small amount each payday for hospital insurance protection. For example, the average worker in 1966 will contribute about $1.50 per month. The employer will contribute a similar amount. And this will provide the funds to pay up to 90 days of hospital care for each illness, plus diagnostic care, and up to 100 home health visits after you are 65. And beginning in 1967, you will also be covered for up to 100 days of care in a skilled nursing home after a period of hospital care.

NOW: Medicare’s Worsening Finances: The Other Shoe Drops:

A week ago, the Medicare Trustees issued their annual report, which showed that the program is on the fact track to insolvency. The 2011 analysis projected that the Hospital Insurance Trust Fund (which funds Medicare Part A) will be insolvent in 2024, and the program’s long-term unfunded obligations—promised benefits that are not paid for—amount to $24.6 trillion...

...[new] across-the-board cuts would cause 15 percent of hospitals, skilled nursing facilities, and home health agencies to become unprofitable by 2019. This number would climb to 25 percent in 2030 and 40 percent by 2050.

Obamacare

THEN: President Barack Hussein Obama, 23 March 2010, Washington, D.C.:

...And we have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care...

...I said this once or twice, but it bears repeating: If you like your current insurance, you will keep your current insurance. No government takeover; nobody is changing what you’ve got if you’re happy with it. If you like your doctor, you will be able to keep your doctor. In fact, more people will keep their doctors because your coverage will be more secure and more stable than it was before I signed this legislation.

NOW: Obamacare's Broken Promises:

Hard times continue for the Affordable Care Act (aka Obamacare). The administration has scrapped the law's long-term care insurance program, covering nursing homes and home health care. The program was deemed unrealistic. This is a harbinger...

...Writing in The New York Review of Books, [Arnold Relman, the former editor of The New England Journal of Medicine] says that "the law does very little or nothing to address some of the most important causes of the high cost of care and its rapid inflation.” Note: Relman isn't a conservative crank. He's a critic of insurance companies and advocates a single-payer, government-run health-care system.

The ACA, Relman writes, doesn't alter fee-for-service reimbursement... [he is also] unimpressed with the ACA provisions intended to control costs: for example, the Independent Payment Advisory Board (IPAB). It's a group of 15 experts who would recommend changes if government health spending rose too rapidly... Relman also dismisses "accountable care organizations” (ACOs) that supposedly save money through coordinated care by doctors and hospitals. The regulations governing ACOs will be so complicated that there won't be many of them, he writes.

...Many of [the ACA's] promises rest, like CLASS, on unrealistic assumptions. Disappointments loom, and the needed debate is deferred.

We are living in Ameritopia

Mark Levin explains:

The reason I say that liberalism is the philosophy of the stupid is because we can look at what's going around in the country today. If, in your own lives, you were pursuing policies that were destroying your own home ownership, that were destroying your own job, that were creating a massive, impossible debt for your family and your children in particular, you'd stop it. You wouldn't keep doing it!

And yet for the liberal, if it's imposed on you -- and they feel that they can be immune from it -- they're for it. They wouldn't do to themselves and their own family what they're doing to you, and your family, and the whole nation! Take Barack Obama. Does Barack Obama conduct himself in his own, personal affairs, in his family's affairs, as recklessly as he conducts the affairs of the nation? No. Would he run up the kind of relative personal debt that he's running up for the nation? No way.

...So they do to us -- and they do to our society -- what they would never do to their own families. They do not live in their own lives as they seek to have the rest of us live. Or as they seek to have our society conduct itself.

The only question that remains is whether the country can be saved. 2012 may be our last, best chance to save this Republic from the Utopian Statists, whose pursuit of impossible, narcissistic dreams have set the country on a course for national fiscal suicide.

Social Security Administration Misplaces Car Keys Plus One Trillion Dollars, But Mostly One Trillion Dollars

How disconnected from reality do you have to be to believe that an enormous federal bureaucracy -- that can't fire anybody, has no competition, and operates like the DMV -- can effectively run the entire health care system?

Answer: You have to be a Democrat.

The outlook for Social Security's trust fund has deteriorated to an astonishing degree over the past year, new Congressional Budget Office projections show... [The] CBO expects the trust fund to peak in 2018 and decline to $2.7 trillion in 2022 — a full $1 trillion less than Social Security's own actuaries predicted last year.

...Under current law, once the trust fund is gone, Social Security could only pay 78% of benefits. Since older retirees and the disabled would be protected, new retirees would face much deeper cuts to a benefit that is not especially generous to begin with... The average retired worker received a $1,200 monthly benefit last year before Medicare premiums were subtracted.

...Assuming a 22% automatic cut, average earners (about $43,000 in 2012) halfway into a 40-year career would have to set aside more than 5% of annual wages, or $2,150 a year, to replace [the] lost benefits.

Already, the next president will have to address a near-term crisis in Social Security's disability insurance program that CBO expects to hit in 2016 — resulting in immediate cuts for many of the neediest beneficiaries.

...Social Security already is cash-flow negative, taking less in revenue than it pays out in current benefits. CBO sees the program's $48 billion cash gap in 2011 rising above $100 billion by 2019... And depressed Treasury rates mean smaller interest payments on the trust fund's official balances.

Like night follows day, bankruptcy awaits each and every one of these Democrat-created programs, all operating outside the Constitution (not to mention the laws of arithmetic and common sense).

Obama Reelection Campaign Thinks You Can Be Bribed For $2.85 a day...

...while robbing the Social Security Trust Fund. Because that's what "the Payroll Tax Cut" is: it's reducing the funds available to Social Security, which is already speeding toward insolvency.

I just received this email from the White House, marketing the president's raid on the Social Security Trust Fund:

The email includes touching stories of families that really, really need that $2.85 a day.

Curious how Democrats never consider the next generation of Americans who will have to repay these debts -- this money borrowed from the future -- that were used to pursue a reelection campaign for a temporary politician.

And notice President Obama's cynical use of official White House email infrastructure to wage his reelection campaign.

Pretty sneaky, eh?

Well, I have news for the president: $40 for two weeks is a "big deal", especially for the next-generation -- which will have to repay this borrowed money with interest.

Barack Obama, Emperor of Insolvency

The lede in today's coverage of the U.S. deficit struggle ("Obama reopens debate on US stimulus") at the Financial Times is troubling on two fronts.

Barack Obama sought to reignite the debate over an ­economic stimulus package on Tuesday, demanding that a bitterly divided Congress pass an extension of payroll tax cuts before the end of the year.

“We still have to give the economy the jolt that it needs,” the US president said on the campaign trail in New Hampshire, a day after a bipartisan committee failed to agree on a $1,200bn deficit reduction package. He added he would do “everything in his power, with or without Congress”.

Consider:

• Fact: the "payroll tax cuts" simply accelerate the collapse of the Social Security system

• And what kind of president talks about operating "without Congress"?

Our beloved Dictator-in-Chief knows that America is insolvent, that Social Security is headed for collapse, and that Obamacare simply hastens the implosion.

But, some believe that was the plan all along.

Obama’s Demagoguery Another Loser in NY-9 [Dan from New York]

Dan from New York:

Overlooked, or at least given short shrift, in the analysis of the Democrat’s stunning defeat in NY 9 has been the age of the average voter. It’s relatively high and the elderly make up an usually large percentage of the electorate in the district.

The losing Democrat, David Weprin, tried to turn that to his advantage by incessantly “warning” that Republican ogres wanted to gut Social Security/Medicare benefits.

Judging by the results, the tactic "flopped in spectacular fashion." And if it won’t work there, it won’t work anywhere. That’s is more bad news for a floundering president who is using “Mediscare” as one pillar of his reelection strategy. It should also send a message to Republicans that there is a lot to be gained by doing what’s right, as long as they take the time to explain their policies to the American people.

Mark Levin: Obama's Hypocrisy Is Off the Charts @MarkLevinShow

Mark Levin:

The president, by God, he's got resolve on one thing: he's going to Martha's Vineyard whether you like it or not!



Nine days! He "wants to be with his children."



Really? Aren't they in the White House? Listen to these idiotic arguments.



No, he wants to be on Martha's Vineyard with the beautiful people; the millionaires and the billionaires. And the private jets and the yachts! This is what kills me: the hypocrisy of how this man lives!



He lives a life of luxury, which you and I subsidize... while he attacks a life of luxury by people who pay for themselves!



He takes the biggest corporate jet in the world -- in terms of its cost, operation and construction -- Air Force One, there's gonna be yachts, millionaires, billionaires. They're going to be eating all kinds of food with salt, fat and all the rest of it, wonderful desserts, cheesecake, chocolate, mousse -- you and I, were supposed to act like we're living in hovels.

The children on the Left enjoy screeching about corporations, "the wealthy" and the high-achievers who have made something of themselves.



What they fail to understand is that the biggest, most powerful, most corrupt and lawless "corporations" in the world are governments.



Case in point: Democrats have constructed the most gigantic Ponzi schemes in world history: Social Security and Medicare, to name but two. Had they done this in the private sector, they'd be serving life sentences in a cell, sharing a bunk with Jethro.



But somehow it's noble if they're in government and they're bankrupting your children and grandchildren with lawless, unconstitutional and mathematically impossible schemes!



No, they're not noble. They're all hypocrites. Every last Democrat.




Linked by: Ace o' Spades. Thanks!

Hanson: the Collapse of Our Failed Welfare State Will Purify Us

Historian Victor Davis Hanson is far more optimistic than I regarding the aftereffects of the impending debt implosion here in the U.S. We are approaching $15 trillion in national debt, which does not even take into account the $60+ trillion entitlement programs that will soon overtake our ability to pay. In that light, Hanson asks:

• "Should those on welfare who have more than three children still qualify for increased assistance for each additional offspring?"

• "Does the affluent class deserve mortgage-interest deductions on second and third homes?"

• "Should U.S. troops subsidize the defense of an allied and rich Germany or Japan 66 years after World War II?"

Hanson observes that the aberration of deficit spending will soon result in a return to rationality:

...the dogma that a teenager with dyslexia or a mature man with a bum knee will receive years of Social Security disability benefits will be assessed as an historical aberration of the last twenty years. A decision by an insurance company or government agency that a 62-year old must settle for arthroscopic surgery on a chronically torn meniscus rather than a complete knee replacement will not be interpreted as social cruelty.

Almost everything that can be said has been said about illegal immigration — and about the sustainability and morality of millions of Mexican and Latin American nationals crossing the U.S. border unlawfully and plugging into the American entitlement system. But an insolvent state like California, despite the liberal protestations, cannot continue to house 50,000 Mexican nationals in its penal system at a per capita cost of nearly $35,000 a year, or to extend free tuition in its broke university system to those without legal residence, or to provide social services to illegal aliens that may well cost the state nearly $10 billion a year. Even to suggest such limits was once considered illiberal. Now, not to state the obvious — that those without education, English, and legality have been expecting far more than what they could contribute in return — will be considered derelict.

Do the almost 50 million people now on "food stamps" all truly need them? Are they all starving to death? Is the program fraud-free and used only to buy bare necessities?

Is 99 weeks of unemployment (or more) reasonable?

Can someone who owns an iPhone, a big-screen television, a laptop computer, and a comfy leather couch really be called "poor"?

We can no longer afford the liberal philosophy of redistribution. Hanson concludes that there "...is a certain brutal honesty about this debt crisis. It is slowly beginning to force us to see the world in the tragic way it is, rather than in the therapeutic way we dream it must be."

But as Greece showed us -- and the public sector battle in Wisconsin hinted at -- civil unrest could be on the horizon rather than a becalmed expiation of liberals' sins.

Hope for the best. Prepare for the worst.


Hat tip: Pundit & Pundette.

Well, THESE look like good investments for the Social Security Trust Fund™, or Lockbox, or whatever the Democrats call their Ponzi scheme now

It would appear that the shell game known as the European Union is nearing an end. Please consider: "Greek Two-Year Note Yield Surges 213 Bps to Record 35.19%, More Italy Stock Suspensions".

It's getting very scary out there. First there has been an unsubstantiated rumor that Spanish PM has resigned based on an El Pais editorial, and then we have the fact that Greek 2 year bonds have just collapsed by another 2% to an all time record 35.19%. The cherry on top are reports that Intesa Sanpaolo and some other volatile bank shares are suspended after continuing their last week plunge. One day soon the entire European stock market will just shut down and not reopen (which will naturally simply be an excuse for the US HFT lobby, which now feels unfairly attacked for being a malicious parasite, to levitate the Russell 2000 to unseen levels).

As usual, this is worth a thousand words:

In short, the market believes that Greece's promises to pay its immense debts are worth roughly the value of the Zimbabwean trillion-dollar note.

Kind of like Social Security's promises to pay. Which reminds me:

How is it that Bernie Madoff is in prison for life, but the enablers of a Ponzi scheme three orders of magnitude larger -- Barney Frank, Nancy Pelosi, Harry Reid and Chuck Schumer among them -- are not only free as birds, but still grasping onto the reins of power with white-knuckled death grips?

Destroyer-in-Chief Gets Testy

The GOP has President Obama's shoulders pinned against the wall. He will have to make a choice between making Social Security payments to seniors... or funding his bloated legions of $150,000/year paper-pushers. And because he realizes that his back is against the wall, tempers are running high:

• President Obama abruptly walks out of talks: "President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations, according to GOP sources... 'He shoved back and said ‘I’ll see you tomorrow’ and walked out,' House Majority Leader Eric Cantor (R-Va.) told reporters... On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies."

• Much Needed Straight Talk from Rep. Walsh: Quit Lying, Mr. President: "Congressman Joe Walsh (R-IL)... reminds Obama and fellow Republicans why people like himself were elected to Congress. While everyone is focused on the fight over tax increases, many Republicans are forgetting that the $2, $3, or even $4 trillion in supposed spending cuts are nothing but unverifiable accounting gimmicks that are based upon some contrived baseline. Even if they would represent real cuts, the $4 trillion in deficit reduction would only extirpate $400 billion annually from a $1.4-1.6 trillion yearly deficit."

• DNC chairwoman: Republicans acting almost like 'spoiled children' on debt ceiling: "The chairwoman of the Democratic National Committee said Republicans have been acting like 'spoiled children' in negotiations to raise the debt ceiling... 'We demonstrated that we're willing to put all our sacred cows on the table and the Republicans are simply not willing to do anything but sit on their hands and cross their arms like spoiled children almost. That's just not responsible,' Rep. Debbie Wasserman Schultz (D-Fla.) said Wednesday on MSNBC... [she] also rejected the idea that some Democrats were 'rebelling' against President Obama for wanting to include cuts to Social Security and Medicare as part of a possible debt ceiling increase deal."

• Obama warns Cantor: 'Don't call my bluff' in debt-limit talks: "Republicans said tense negotiations over raising the $14.3 trillion debt limit at the White House ended when President Obama stormed out of the meeting with a stern warning to House Majority Leader Eric Cantor (R-Va.): 'Don’t call my bluff.'"

Call his bluff.

After all: how do you negotiate with a charismatic demagogue who simply can't tell the truth?

Answer: you can't.

Don't fold, Republicans. Let Obama make the choice. Everyone knows that if he willfully stiffs Social Security recipients it will be to keep his public sector union bureaucrats fat and happy.

Let's see how the electorate reacts to that maneuver.


Hat tip: Memeorandum.

Pass the popcorn, Nahanni: Democrats explode in rage that they weren't consulted on Obama's planned cuts to Social Security

And hold the butter.

Senate Democrats reacted angrily Thursday to a report that President Obama has proposed significant cuts to Medicare and Social Security in closed-door talks with GOP leaders.

Democratic lawmakers said they were dismayed to read about Obama’s offer in the press rather than hearing it from the president himself. Their frustration is exacerbated by Obama’s snub of their invitation to speak to the Senate Democratic caucus Wednesday...

...“We would have preferred to hear it from the president instead of from the press,” said Sen. Barbara Mikulski (Md.), a senior member of the Senate Democratic conference. “We first have to go after tax earmarks.” [Ed: WTF?]...

* * * * * * * * *
The debt-ceiling talks seem to be occurring in “a parallel universe,” Mikulski said. “The base is quite cheerless right now,” she added.

The White House appears to be gambling that Democrats, even if they gripe, will ultimately rally around the deal the president cuts, as they did last year on a tax package and this year on a continuing resolution funding the government through October... But any deal will still need votes from Senate Democrats and likely some House Democrats. And Democrats worked Thursday to suggest limits to what they will accept.

...But Democrats signaled they may not accept a deal that pairs immediate entitlement cuts with the prospect of future revenue increases.

In a statement, David Krone, Reid’s chief of staff, said spending and revenue should be balanced “in terms of timing, specificity and dollars.”

Balanced. Kind of like how the Democrats crammed Obamacare down the throats of the American people. And the Frank-Dodd "financial reform" bill. And the "Stimulus", which was -- of course -- "shovel-ready".

Republicans: hold the line. No hiking the debt ceiling without a balanced budget amendment.

Sign the pledge -- and tell your representatives to sign it too
As an aside, that Barbara Mikulski is quite the hottie.

Reuters: 'Capitalism is failing the middle class'

Someone at Reuters named 'Chrystia Freeland' -- if that is her real name -- wasted thousands of bytes of valuable web real estate the other day relaying a study that found 'Capitalism is failing the middle class'. It's as if she believes our economic system really is capitalism:

Global capitalism isn’t working for the American middle class. That isn’t a headline from the left-leaning Huffington Post, or a comment on Glenn Beck’s right-wing populist blackboard. It is, instead, the conclusion of a rigorous analysis bearing the imprimatur of the U.S. establishment: the paper’s lead author is Michael Spence, recipient of the Nobel Prize in economic sciences, and it was published by the Council on Foreign Relations...

...Spence and his co-author, Sandile Hlatshwayo, examined the changes in the structure of the U.S. economy, particularly employment trends, over the past 20 years. They found that value added per U.S. worker increased sharply during that period – 21 per cent for the economy as a whole, and 44 per cent in the “tradable” sector, which is geek-speak for those businesses integrated into the global economy. But even as productivity soared, wages and job opportunities stagnated.

Put yourself back in time 20 years. Take away your cellphone, your flat-screen, your car that does 0-60 in under 8 seconds, your Internet connection, your incredible selection of foods at the local grocery store, and every other innovation of our magnificent (capitalist) free market system.

Is the average worker really worse off now than 20 years ago? Could their quality of life truly be characterized as "stagnant"?

Of course not.

The headline should read 'Crony Capitalism is Failing the Middle Class'.

We've seen decade after decade of bigger, more centralized, government in the United States. The federal government has become so unmoored from the Constitution that it would be well nigh unrecognizable to our nation's founders.

Consider the tentacles that intertwine Goldman Sachs and the U.S. Treasury Department. Or General Electric and the Department of Health and Human Services.

The free market hasn't failed "the middle class" (whoever that is - and, by the way, that phrasing is prototypical Marx-Alinsky class warfare rhetoric).

Monstrous government programs have failed Americans: from disastrous housing debacles like Fannie Mae and Freddie Mac; the control of more and more elements of the energy sector in the name of a "global warming" fraud; "financial reform" authored by the likes of Barney Frank and Chris Dodd; further centralization of the health care industry; the failing welfare state; open borders; Social Security, Medicare, and dozens of other programs that are little more than legalized Ponzi schemes.

If Americans can ever restrain the government to its constitutional duties, we might truly unleash the "middle class".

What we have today is an out-of-control leviathan of a federal government, mandating our light bulbs, electric cars, low-flow shower heads, what kinds of insurance we must buy, and controlling literally every aspect of our lives.

It's not capitalism that's at fault. It's a bloated federal government and its pal, crony capitalism.

Did you know that a bill was introduced this week that would begin to save Social Security from financial collapse? Neither did I.

That's the genius of our legacy media: they don't tell us stuff that we don't need to know.

Consider, if you will, Lummis Bill Tackles Entitlement Reform.

U.S. Representative Cynthia Lummis (R-Wyo.) has introduced H.R. 867, Alex’s Law. Alex’s Law, named after a four-year-old child of a member of Representative Lummis’ staff, helps ensure Social Security remains viable for all generations of Americans by slowly raising the retirement age starting in 2024.

...America’s debt has surpassed an astounding $14 trillion – and [f]or the first time since its reform in 1980, the Congressional Budget Office announced in January that [Social Security] is now permanently in the red. The Social Security trust fund goes broke in 2037, which means Americans will see a 22 percent cut in benefits, and the cuts will get worse if Washington continues to look the other way.

... In 2010, payroll taxes fell $37 billion short of what was required to pay out benefits. The Congressional Budget Office projects permanent Social Security deficits until the Social Security trust fund is exhausted in 2037. At that point, the Social Security Administration trustees estimate that Social Security payroll tax revenues will only be able to support 78 percent of benefits, leading to a 22 percent cut in benefits for all retirees.

Under H.R. 867, the retirement age increase would phase-in slowly over time:

• Today’s 50-year-olds and those older: NO CHANGE FROM CURRENT LAW

• Today’s 49-year-olds – Retirement age increase: 1 month

• Today’s 35-year-olds – Retirement age increase: 1 year

• Today’s 19-year-olds – Retirement age increase: 2 years

• Today’s 4-year-olds – Retirement age increase: 3 years

Let me guess: if the media bothers to cover this, Democrats will demagogue these trivial but important changes.

Because that's what they do.

Poll Finds Lack of Support for Arithmetic, Logic and Reason

Perhaps the questions used in this poll were crafted 'inartfully'. Otherwise this news is discouraging, to put it mildly.

Less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the country's mounting deficit, according to a new Wall Street Journal/NBC News poll, illustrating the challenge facing lawmakers who want voter buy-in to alter entitlement programs.

In the poll, Americans across all age groups and ideologies said by large margins that it was "unacceptable'' to make significant cuts in entitlement programs in order to reduce the federal deficit. Even tea party supporters, by a nearly 2-to-1 margin, declared significant cuts to Social Security "unacceptable."

The mathematical formulae are unassailable, no more easily defeated than the law of gravity.

Someone told me this evening that when FDR initiated Social Security, full payments began at age 65 -- but the average life expectancy was actually a bit below that age.

This is why America needs an eloquent, conservative leader rather than an ideological sibling of Frances Fox Piven. Americans can understand and emphasize with a leader who speaks clearly and honestly about the problem. Failure to do so is simply criminal.


Hat tip: Memeorandum.

Liberals: Democrat Party will split if Obama tries to prevent the collapse of the entitlement Ponzi schemes

The Soros-controlled, far left wing of the Democrat Party is warning President Obama against trying to save Social Security.

The battle lines are forming within the Democratic Party over the charged question of reforming Social Security in the days leading up to President Obama’s State of the Union address.

Liberals, such as Sen. Bernie Sanders (I-Vt.), and labor unions, such as the AFL-CIO, AFSCME and SEIU, have taken a firm stand against cutting Social Security benefits... They are still reeling over the deal Obama struck with Senate Republican Leader Mitch McConnell (R-Ky.) in December to extend almost all of the Bush tax cuts and chop the Social Security payroll tax for one year by 2 percentage points.

Back in the little land we like to call Reality, a Mish reader created several sobering graphs that represent the impending collapse of the Social Democrat schemes that would make Bernard Madoff blush.

Here is a chart I created using budget projections from the CBO. The main point is from now until 2020, we could eliminate 100% of all federal non-defense discretionary expenditures and still run a deficit.

US Federal Revenues and Expenditures 2000-2020
I went back to the data after getting into one too many arguments with people who claim that we can solve our budgetary problems by eliminating government "waste" - the programs that study the sex lives of jellyfish and that sort of thing - without real cuts in entitlement programs.

Entitlement Spending Growth
Unless the Budget Fairy waves her magic wand, it's not going to happen.

The Democrats' Utopian schemes are imploding as we speak -- in California, Illinois and New York. And, soon, coming to a Social Security and Medicare recipient near you.

All over the world, the Fabian Socialist welfare states are collapsing.

And despite all this, despite history, facts, logic and reason all aligned against their agenda, the Obama Democrats press on, hastening the collapse of an economic system they view as 'unfair'.

Bernie Sanders has nothing to worry about.

Kellogg School of Business: Prepare for War Between Taxpayers and Public Sector Unions Because State Pension Plans Are Only 35% Funded

Public sector union bosses and Democrat politicians have engaged in decades of incestuous deal-making. In doing so, they have led taxpayers to a crisis of epic proportions. So says the University of Chicago Northwestern's* Kellogg School of Business, not exactly a fount of right-wing propaganda.

Kellogg has published a study by two academics which outlines the scope of the public sector pension funding crisis (PDF). I can summarize it in one word: pain.

Using proper actuarial calculations, the study determined that states' defined-benefit pension plans are 65% underfunded. Not 65% funded (that would be bad enough)--but 65% underfunded. As of mid-2009, the plans held $1.8 trillion in assets and had $5.2 trillion in liabilities. Even dramatic plan reductions -- like excising cost-of-living-allowances (COLA) -- won't make significant dents in the plans' shortfalls.

Even under the most conservative measures, public pension liabilities are currently over $1 trillion larger than plan assets. Using discount rates that actually reflect the promise reveals shortfalls of $2.5 billion for accumulated benefits only and over $3 trillion for broader measures. This shortfall has to be borne by some party: taxpayers or public employees, be they past, current, or future.

In essence, then, the debate over the solution is over transfers. The current situation is one in which beneficiaries view their benefits as secure promises and taxpayers do not perceive that they will be held accountable for guaranteeing those promises.

In short, the stage is set for a war between taxpayers and public sector retirees.

Memo to the drones: the era of big government, socialist Ponzi schemes is drawing to a close. And the crash will be painful.

Oh, and be sure to thank ex-SEIU head Andy Stern and the other Democrat Socialists when you see them around town. Their insane, Utopian vision of central planning has failed us, just as it failed the Soviet Union, Cuba, North Korea, and every other damn place it's ever been tried.

Say, I've got an idea: since they've done such a great job with these pensions, Social Security, Medicare, Medicaid, the Post Office, Amtrak, and such, let's let the Democrats run the entire health care system!


Hat tip: The Foundry.
*Thanks to Jeff for the correct university.

Record Number of 401(k) Hardship Withdrawals Reported; Retirement No Longer a Concern Given Vaunted Stability of Social Security Per President Obama

Durden explains the latest grim Obama record. In truth, these economic records are wearing a little thin.

...according to a new study by Fidelity, a record number of workers tapped their retirement funds and made hardship withdrawals from their accounts in the second quarter. In other words, just like the country they live in, Americans no longer give a rat's ass about the retirement years in a narrow sense, and the future in a broader one, and since real unemployment is about 20%, wage deflation is everywhere, even as Solitaire time is down to 0 (except for SEC employees), and nobody has any money left, the only logical recourse is to borrow from the self-funded pension fund...

... According to the Fidelity study, "Among the 11 million workers whose 401(k) plans are run by Fidelity, 11 percent [Ed: 1.2 million people!] took out a loan from their plan during the 12 months ended June 30, the company said, up from 9 percent at the same point a year earlier. By the end of the second quarter, plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier."

The likelihood that these loans will ever be repaid are roughly equivalent to the odds that Jean Claude Van-Damme will pull down a lifetime achievement Oscar.

And funding your retirement won't be much of a problem. Well, at least according to President Obama:

President Obama said Social Security is not in crisis and only modest changes are needed to keep it solvent...

"I have been adamant that Social Security should not be privatized, and it will not be privatized as long as I am president," he added.

Obama also said his bipartisan fiscal commission could come up with proposals to extend the life of the program.

"I am absolutely convinced it can be done," he said.

My primary concern is whether we should call Social Security "History's Greatest Ponzi Scheme" -- or just the "United States' Fiscal Death Panel".