Tag Archive | "entitlements"

The Choice is Yours

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On Monday, September 12, 2011, CNN hosted the Tea Party Republican Debate.  Hosted by Wolf Blitzer, the panel consisted of eight Republican candidates, contestants, if you will, for the 2012 Presidential race.


Each candidate was given one minute to respond to questions concerning his or her plans for remedying the broken government in Washington DC.  If the candidates came under fire, they were allowed 30 seconds for rebuttals.  The outcome, of course, was that more time was spent on rebuttals than questions.  With skeletons being dragged out of the candidates’ closets (the rattling bones of prior statements made by those hopefuls), it was a great day for the Democrats.  The only non-politician with no skeletons to rattle was Herman (Citizen) Cain.


Tea Party members from across the nation asked candidates what course of action they would take in certain scenarios.  Some answers drew applause, while others were booed.


One of the hotbed questions was how the candidates would address the ticklish issue of reforming entitlements, particularly Social Security, while still being accepted as runners in the Presidential race.  Some candidates viewed Social Security as a government-controlled Ponzi scheme.  Others spoke of fixing the problem by instituting age limits and “opt out” features.  Whatever the recommendations batted around on stage, it was clear that, going forward, Social Security would be a watered down version of the original system.  We cannot afford to pay out benefits at the rate we are currently doing.


President Roosevelt’s dream for a self-supported system of mandated retirement was based upon a pyramid payout system plan.   New American workers contributed to that plan in order to fund retiring American workers in an unending flow of revenue.  FDR’s plan worked beautifully until the advent of the global economy and the outsourcing of American jobs.  Once those jobs dried up, so did the revenue needed to sustain the plan. Although now considered an entitlement, it was really an annuity based upon the contributions of the workforce.  Social Security was, in essence, forced savings taken from workers’ paychecks, savings that enabled everyone — until now — to retire at the age of 65 and enjoy their Golden Years somewhat free of financial burdens.


Examined by other nations, Social Security was considered a model system because of the low administrative costs associated with providing pensions to American workers. Was candidate Rick Perry correct when he labeled Social Security a Ponzi scheme?  Or was Social Security the dream of an American President driven to improve the quality of life for the American people?


Right now, when all the chips are on the table, it looks as if Perry was right … but who should follow Bernie Madoff to jail?   Should it be our illustrious Statesmen in the Senate and the House — those who made Social Security a ghost of its former self?   Is not grand theft considered a crime, and are the people who commit such acts not considered criminals?  Under our justice system, are criminals not be tried and punished if found guilty?  And if this is an indication of the New World Order, is this the American spring?  If so, God help us all summer, fall, and winter come along!


Maybe the Tea Party should have asked how, if the nation’s coffers are so depleted, we can still afford to pay out Congressional pensions without benefit of scrutiny.  As they say in the provolone factory, “Something sure does stink here.”


Ben Franklin postulated that, when heads of State gather to debate an issue, “Neither a fortress or a maidenhead will hold out, once they begin to parlay.”  Ben’s is about the best advice we’ll get when it comes to reforming anything in this government.  As my old friend Al Nagle would say, “It looks like we’re done boys, done crisp!”


What will befall hardworking taxpayers who once looked forward to what they’d paid into and were promised?   At heart, the question is, “Who can we, the people, trust?”  Who indeed?  I guess we’ll find out when the 2012 election is over. 


Entitlements Plus: Congressional Pensions at the Expense of Social Security

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The very word “entitlements” has plunged our nation into controversy fraught with fear, shame, and righteous anger.  With respect to their entitlements, both retirees and current contributors now live with a feeling of unease with respect to Social Security pensions, or the impending lack of those pensions.


Mandated by President Franklin Delano Roosevelt as a safety net for American workers, Social Security was conceived as a sort of savings/pension plan, to which those workers contributed.  Upon the retirement age of 65, workers were compelled to leave the workforce to enjoy the Golden Years, living — in many cases, primarily — off the funds paid into their Social Security accounts.  Retirement at the age of 65 had an additional benefit: once the retiring workers had left the workforce, new workers would be hired.  Those younger counterparts would, in turn, continue the flow of revenue into the Social Security system.


The amount that each retiree would receive was based upon the number of Quarters he or she had worked, with a maximum monthly payout of $1,000.  If the employee had to leave his or her job early (for reasons other than retirement at the age of 65), payouts from Social Security would represent a reduced amount of money.  In a sense, Social Security was an annuity paid for by the contributor.  Instituted in response to the Great Depression of the 1930s that left many Americans jobless and penniless, Social Security was a brilliant, self-fulfilling plan based in logic and compassion.


And, it worked!


Since the inception of Social Security, the cumulative monies collected and held in escrow grew to a vast amount.  And here’s where the system was corrupted, for apparently, the amount was too vast for a greedy and/or inept government (take your pick) not to misappropriate.  We now hear that the system needs to be reformed because our government cannot continue payouts as more people reach retirement age.   Although many wars and natural causes have resulted in a loss of contributors, these reasons cannot have been enough to empty the coffers.  Avaricious and incompetent hands did that!


To the average American literally banking on Social Security on which to survive during his or her retirement, government killed the goose that laid the golden egg.  The rhetoric now spewed by Washington, DC as to why the plan is foundering includes the following yammerings:


1.       The plan was not designed to handle longer life expectancies.

2.       Social Security is considered an entitlement we can no longer afford.


And the list of drivel goes on.


What our legislators failed to mention was the global economy that has created havoc in the American workforce, stranding millions without jobs and now, without hope of the respite via Social Security. Cheaper foreign labor and governmental regulation have outsourced jobs to foreign soil, through American corporations seeking higher profits and an avoidance of taxes.


Social Security contributions came from the American workforce.  It also stemmed from the employers who’d hired and used that workforce to create fat profit margins for themselves.  But as long as cheap labor exists elsewhere in the world, we can expect more of the same in the future.  All of these elements sound the death knoll for a mandated government pension plan for the American people.


With the unemployment rate hovering around 9%, the latest government forecast has predicted that it will drop to about 5% in 2017 or later.  Gee, that’s only six years from now!  And if history teaches us anything, the dip in unemployment during the Great Depression did not occur until the Japanese had bombed Pearl Harbor, for The War Machine creates jobs.


Although the recovery looks glum, there still remain some industries that cannot outsource their labor overseas.  These include mining, transportation, energy, and farming.  However, regulation and a fixed minimum wage have hampered the ability of these industries to hire new employees.  So I guess these things will be the next to achieve reform.


However, all is not lost.  There are yet bright stars on the American horizon with respect to employment.  These, of course, are governmental jobs, beginning with:


1.       The President of the United States

2.       All members of Congress

3.       Employees of governmental agencies, bureaus, and departments


All of the above enjoy Entitlements Plus — entitlements not relegated to the scrap heap in resolving our financial problems.  The entitlements include Congressional pensions.  In January 1942, members of Congress voted to extend pensions benefits to the legislative branch under the provisions of P.L. 77-411.  P.L. 77-411 was formerly limited to the Executive Branch alone.  Two months later, the bill was repealed due to public outcry.  After the end of World War II, and again in 1946, P.L. 79-601 extended pensions to the legislative branch, under CSRS.   The justification was that a pension plan would attract younger members to the legislative branch and encourage older members to retire.  But this, of course, never happened.  Why would anyone wish to retire from a job with such great perks?  Most of our lawmakers die in office!


Nevertheless, hope sprang eternal for those in Congress.  The Social Security Amendment of 1983 required all members of Congress to participate in Social Security, beginning January 1, 1984.  As Social Security and CSRS benefits sometimes overlapped, Congress called for a new, Federal employee retirement plan to compliment the former plan.  Enacted in 1986 and named FERS, it placed all new members under its plan, while older members were free to remain in CSRS or enroll in FERS.


The amount received by retiring Congress members is calculated in a formula that considers:


1.       The number of years served

2.       The average pay for the top three years in term


For example, a member of Congress with a three, top-year average salary of $153,000, with 22 years served, would be eligible for an annual pension of $84,645.  Not bad compared to Social Security!


This plan was not passed without contention from a few lawmakers who still clung to old-fashioned values and plain old logic.  Longtime Congressman Ron Paul would not participate in the plan, publicly decrying it as “immoral and hypothetical”.  North Carolina Congressman Howard Coble did not participate in the plan and actively campaigned against it.


And the controversy continued.  In 2003, when James Traficant was expelled from Congress, several members tried to pass a bill that would prevent their expelled brothers from receiving their pensions.  But the bill was stalled.  It was later dropped altogether, after being sent to the House Administration and Reforms Committee.


This action led to the passage of the Federal Pension Forfeiture Act, also known as The Duke Cunningham Act.  Introduced by Senators John Kerry and Ken Salazar, this law stated that members of Congress must forfeit their pensions as a result of one of more of the following crimes:


1.       Bribery of public officials or witnesses

2.       Conspiracy to commit an offense or to defraud the United States

3.       Committing perjury while denying the commission of bribery or conspiracy

4.       Subornation of perjury committed in connection with false denial or testimony of another


Provided the legislators toed the line with respect to bribery, perjury, and conspiracy, their Congressional pensions remained intact.  These pensions featured tasty fringe benefits, not limited to healthcare and junkets, all at the taxpayers’ expense.  They probably termed worldwide excursions “junkets” after the colloquial phrase, “Junk it,” which means that when it’s all used up, you junk it!  Despite our founding fathers’ visions for a government devoid of royalty, our greedy lawmakers had other plans for taxpayer monies.


So, when it comes to Entitlement Reform, you can bet your bottom dollar … and it may very well be your bottom dollar — that CSRS or FERS will escape reform.  Just plain old Social Security will be the scapegoat, as will the people who paid into the plan and were relying upon it to literally feed, clothe, and house them in their retirement years.  Once again, it looks as if we’re going to bend over and take it.  Doesn’t it? 


 

To What Are You Entitled and From Whom?

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Once again, the word “entitlements” crops up in the quest to save the American economy.  The hew and cry of our elected officials is, “We cannot afford Social Security, Medicare, and Medicaid for the underprivileged citizens of America.”  Our officials throw words like “unsustainable” and their ilk around, to describe the situation of the richest country on this planet.  Yet, other countries of the world can afford the same entitlements for their citizens!


In most local and State governments across America, comptrollers oversee the fiscal responsibility of the government they represent.  Comptrollers are the ones who control spending. I didn’t know if an Office of the Comptroller existed at the Federal level, because I’d never heard anyone from the Federal government mention it.  So, I wondered, who does oversee and control the spending by our Federal government?


In pursuit of the truth, I typed this question into an Internet search engine, which yielded this result: “The House of Representatives (Congress).”


This is no one, individual Comptroller.  Instead, the House Ways and Means Committee has jurisdiction over all taxes, tariffs, and other revenue raising measures, including:


  • Social Security
  • Unemployment benefits
  • Medicare
  • Enforcement of child support laws
  • Temporary assistance for needy families (the Federal Welfare Program)
  • Foster care and adoption programs


The Constitution of the United States requires that all bills regarding taxation must originate in the House of Representatives, a mandate that makes the House Ways and Means Committee very influential.  Its counterpart is the U.S. Senate Finance Committee.


Chairman Charles Rangel of the 111th Congress came under the investigation of the House Ethics Committee and had to step down until his case was resolved. However, Rangel’s leave of absence was considered a resignation.  When his pro tempis successor, Acting Chairman Pete Stark resigned, Sander Levin stepped in until the Republicans won the House.  Upon that victory, Dave Camp became the new Chairman.


Now that we’ve gotten that straightened out, who is watching the store?  With these two committees overseeing all revenues, how on Earth are we in debt?  If one person — say, Tim Geithner — were making the decisions, we could understand it.  But with two committees, it’s hard to swallow.  Sounds like trouble, right here in River City, with more problems for the House Ethics Committee.


There is an old Biblical quote, “The Lord giveth and the Lord taketh away.”   But our lawmakers in Washington are far from Godly.  As human beings, they are subject to all temptations.  So, how can we, as a nation, trust them?


The same people that bestowed the entitlements upon us now want to revoke them, because the two committees did not have the foresight to create an exit strategy.  Before they’d decided to reform programs that affect the welfare of the American people, you would think that they might have considered attacking wasteful spending.  Under the category of “wasteful spending” falls the following:


  • Constructing the Bridge To Nowhere
  • Saving marsh mice in San Francisco
  • Saving tiny fish drying up in the San Joachim Valley
  • Sending military and financial Aid to 148 of the 192 countries in this world (see the video clip in the article “Who’s Getting Hosed” on our site).
  • Last but not least: The self-proposed endowments of our elected leaders, which make their future rosy even as the rest of the country gets flushed down the toilet.   I think they took a page out of Emperor Nero’s book.  As you may recall, he fiddled while Rome burned.


The answer to the question of how we tax and spend should be “by the will of the American people.”  Maybe it’s time to elect an ad hoc group to oversee the guys who hold our nation’s purse strings.


Before I leave you to cogitate on this, I’d like to sum up with a quote posted in a little mom and pop store during the Great Depression.  It read, “In God we trust; all others pay cash.” 


The Coming Storm

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In the James Hilton novel, Lost Horizon, the High Lama reveals to his predecessor that a great storm is coming to engulf the world.  At the storm’s conclusion, the treasures of Shangri-La (heaven-on-Earth) were promised to emerge, thereby restoring a ravaged world.  In his prognostications, the spiritual leader also echoed Jesus Christ in predicting that the meek would inherit the Earth.


Unfortunately, Lost Horizon is a work of pure fiction.  The truth of the matter is, it will not be a happy ending after the great storm in America subsides.  The storm in question is, of course, the collapse of our financial institutions and, fittingly, the government that allowed it to happen. Although our present administration pontificates that our “recovery” in the wake of the $710 billion bailout is working and the future looks brighter, this storm has been brewing for quite a while now, and no hurricane hunter’s device tossed into its eye is going to deflate it.


California’s Governor has announced that his State can no longer fund itself, and has requested that the Federal government bail it out.  If the former mighty “Conan the Barbarian” can be felled by such a storm, what shelter exists for the common man and woman?  And, California is just the tip of the iceberg, as more States totter on the edge of financial ruin.  How many bailouts can the taxpayers afford?


Despite the rape and pillage of our economy by big business buying off elected officials, there has been no fiscal restraint in Washington or even at the State level. Borrowing from Peter to pay Paul is a strategy that does not work when our President asks citizens to tighten the belt even further as he uses that belt to strangle taxpayers with the costs linked to a proposed national healthcare system.


Oh, how the mighty have fallen! Americans had enjoyed an increasingly prosperous economy from the time that World War II ended, until President Bush, Senior, marched us into Saudi Arabia, thus sending interest rates skyrocketing.  The post-WWII boom began with an exploding housing industry, the advent of technology, and the race to space, which we won.  Considering that a relative blink of an eye earlier, our people were hurling themselves out of buildings due to the Stock Market crash, our fiscal rebound was an amazing accomplishment on a national level!  We pulled ourselves up by our bootstraps following the Great Depression, thanks largely to the institution of FDR’s social programs (including Social Security and Medicare).  Once the war ended, peace and prosperity reigned.


Now deeming these programs “entitlements,” our government claims that their wells of funding are running dry and cannot be sustained. I don’t know about you, but when I hear our Congressmen and media reps talk about “entitlements,” as if it is a dirty world, it makes my blood boil.  If the perks given to our so-called leaders of industry and government are not entitlements, then what is?


The difference between their entitlements and ours is that we average, law abiding, hard-working slobs actually contributed to our programs with our hard-earned dollars, the same as we do when we buy any insurance policy!  There is no doubt in my mind that the program funds were mismanaged, misappropriated, and (oh, why don’t I just come out and say it?) stolen, period, for purposes other than their original intent, which was to support the common workingman and woman!


When the government decides that it is time to take fiscal responsibility and make the first cut in spending, what will be cut?  Will we as a nation reduce aid to foreign countries (a calculated ploy to buy their friendship)?  Will we cut future bailouts to institutions whose CEO’s still crisscross the country in private jets and give immense bonuses to their higher-ups, even as they plead for the handouts?  Will we continue to reward corporations who export American jobs?  My guess is, we will, and thereby will escalate the screwing over of the taxpayers!


If we all manage to survive somehow until 2012, the results of the Presidential election will herald the path that America will take. I portend that fiscal responsibility will not come without pain to America’s citizens.  Cutting spending is akin to attempting to break a bad habit, without being armed with the necessary resources.  Hopefully, wise men and women will step forward to suggest a solution that will ease the suffering while we go through an even bigger withdrawal: the separation from our earnings and the social programs into which we have paid.


Perhaps, in the end, the meek will not inherit the earth.  Perhaps, in the end, only those robust taxpaying souls strong enough and resilient enough will survive yet another national crisis.

America, Your Expiration Date May Have Arrived

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Expiration-Date1

Nothing – in the history of the world – conceived, engineered, built, or otherwise created by Man has any real permanence.  All of Mankind’s towering achievements are subject to inevitable decay and destruction.  Whether a structure, philosophy, society, or form of government, each is inherently flawed by the limited thinking and understanding of its creator(s); thereby, containing within itself the ultimate cause of its own demise.

 

In the world of consumable food products, we know that even those products that have been preserved in one fashion or another will spoil after a period of time or lose their nutritional value. Thus, we affix an expiration date beyond which that item may not be sold, even though it may still be edible for some time beyond its determined expiration.

 

In 1787, at the time that the Constitution was adopted by the Constitutional Convention in Philadelphia and shortly thereafter ratified by conventions in the original thirteen states, Alexander Fraser Tytler (also known as Lord Woodhouselee), a Scottish history professor at the University of Edinburgh, analyzed the history of democracy and expressed the following:

 

“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. [It] will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.  From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.  The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years.  During those 200 years, those nations always progressed through the following sequence:  from bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to complacency; from complacency to apathy; from apathy to dependence; and from dependence back into bondage.”

 

Sadly, if Lord Woodhouselee’s analysis is accurate, America is well past its prime.  Perhaps, its expiration date has already lapsed, and we, its people, are living through that confusing period between point of no return and actual, recognized demise.

 

With $3 trillion in federal bailouts over the past 18 months, it appears that an apathetic America is evolving into a state of dependency on the federal government that would have appalled our Founding Fathers.  Insurance and financial giants AIG, Citigroup, and Goldman Sachs owe their continued existence to the American taxpayer via our growing federal government, as do automakers Chrysler and General Motors.  What our economy would look like today absent these bailouts is uncertain.  What is certain, however, is that our record levels of indebtedness will be a drag on economic growth for years, if not decades to come and the bane of the existence of future generations.

 

Prior to the Great Depression, American citizenry and enterprise possessed a self-reliance and spiritual faith that propelled this Nation to heights unseen in the history of our planet.  Since that time, the quest for security has eroded personal liberties and created dependency on governmental largesse, even by many of our most self-reliant citizens and well-known companies.  The growth of entitlement programs such as Social Security, Medicare, Medicaid, and AFDC among others, while giving a helping hand to some, has had a narcotic effect upon many with estimates of up to 40% of the current population receiving payment monthly from some form of government entitlement program.    In commerce and industry, lucrative government contracts and protectionist trade legislation can spell the difference between profitability and failure.

 

The desire for security is both seductive and compelling.  It works at odds to the “eternal vigilance” required to maintain a free society.  Our Founders possessed an abundance of the self-reliance and spiritual faith of which Lord Woodhouselee spoke.  Self-reliance and spiritual faith are really, in the final analysis, the flip sides of the same coin.  With spiritual faith comes knowledge of the Truth of our Being – that our Creator is the source of all good and the only source upon which we can always depend.  Armed with the Truth, our Founding Fathers and their descendants depended not upon government programs but upon their expression of that Truth to confidently build a nation that became a beacon of hope to the rest of the world.

 

Today, that beacon has dimmed, shrouded by the burden of big government and the concomitant taxation and governmental intrusion into virtually every phase of the lives of our citizens.  Yet, many in the world still covet what we have.  Perhaps, we can save our country and the world by returning to the spiritual faith, knowledge of the Truth, and self-reliance that have built a great nation.  The Truth knows no limits and has no expiration.  If we embrace It, neither do we. 

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