entitlements Archive

The True Cost

By James Schaefer. There is an enormous cost to taxpayers -- and to the American economy, and to government -- by having the Social Security system structured and administered the way it currently is. Holding the Social Security Trust Fund in safe but low-yield U.S. Treasuries -- "backed by the full faith...
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Whence We Came

By James Schaefer.   The original colonists of America and Canada were risk-takers -- by definition, a self-selecting group of people -- willing to leave behind family and culture and language and all that stood for civilization to cross an ocean in search of a better life. No government handouts awaited them. That entrepreneurial spirit...
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Putting It in Perspective

By James Schaefer This snapshot of federal spending recently crossed my desk, and it is worth sharing.  It simply converts the federal numbers into an equivalent household budget.  The numbers are approximately correct for 2012, though they don't have to match exactly to make the point.   Why the U.S. was downgraded: • U.S....
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Contagion and Eurosclerosis

By John Lumbard. The debt of Portugal has fallen in value so much that a buyer can now get a yield of 16% on long term, ten year bonds.  Portugal won't have to actually pay 16% until it has to borrow again (most likely when an old bond issue matures and...
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Are We Like Greece?

By John Lumbard. The fear that Europe will drag the U.S. into a recession is ebbing, and it's about time.  It's likely that Europe is already in a recession, but we're not---and there's little reason why we should be, because our exports to the continent are only worth about 4% of our...
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So. There Really Was Enough Money After All . . .

By James Schaefer.   The existence of the Alternate Plan, which substitutes for Social Security in three Texas counties, is proof that Social Security has collected sufficient FICA revenue over the decades to keep the system solvent (Perry Is Right; There Is a Texas Model for Fixing Social Security, Wall Street Journal, September...
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The Truth about Entitlements

By James Schaefer.   In today’s Wall Street Journal, the lead editorial discusses the problems of government overspending (The Road to a Downgrade, July 28, 2011). Medicare, Social Security, and Medicaid prove Milton Friedman's thesis: we cannot get something for nothing.  There is no free lunch; and indeed, it is quite an...
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About That Trust Fund . . .

By James Schaefer Mr. Obama recently stated that he couldn't guarantee that Social Security checks would go out in August if America's debt ceiling weren't raised (Obama's Debt-Ceiling Scare Tactics).   America's taxpayers have paid $2.5 trillion in FICA taxes over the past several decades to create the Social Security trust fund.  It isn't enough...
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How to Fix the Health Care Mess

By John Lumbard.   Since 1994 Jeffrey Flier, MD, now Dean of the Harvard Medical School, has been offering a plan for health care reform that would rein in the galloping cost increases that threaten to bankrupt our government and make health care unaffordable to the middle class.  His concept---universal health care...
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The Most Predictable Economic Crisis In History

That's what Erskine Bowles, co-chair of the president's National Commission on Fiscal Responsibility, said about our government's ever-so-slowly-developing fiscal calamity in this Senate Budget Committee testimony. The President disavowed the findings of his commission, but it continued on in a scaled-down group of six members (all Senators) called the Gang of...
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