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The entitlement crisis in America


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#1 Happy Panther

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Posted 25 January 2013 - 10:26 AM

Wall street Journal:
http://online.wsj.co...Opinion_LEADTop

Quote isn't working for this text. Som of these stats are pretty shocking. Compare them to Peggy Noonan's comments:



There is no sign, absolutely none, that any of this is on Mr. Obama's mind. His emphasis is always on what one abstract group owes another in the service of a larger concept. "You didn't build that" are the defining words of his presidency.






•Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income. Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960.

• According to the BEA, America's myriad social-welfare programs (the federal bureaucracy apparently cannot determine exactly how many of these there are) currently dispense entitlement benefits of more than $2.3 trillion annually. Since those entitlements must be paid for—either through taxes or borrowing—the burden of entitlement spending now amounts to over $7,400 per American man, woman and child.

• In 1960, according to the Office of Management and Budget, social-welfare programs accounted for less than a third of all federal spending. Today, entitlement programs account for nearly two-thirds of federal spending. In other words, welfare spending is nearly twice as much as defense, justice and everything else Washington does—combined. In effect, the federal government has become an entitlements machine.

• According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits. That percentage is up almost 20 points from the early 1980s. And contrary to what the Obama White House team suggested during the election campaign, this leap is not due to the aging of the population. In fact, only about one-tenth of the increase is due to upticks in old-age pensions and health-care programs for seniors.

• According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits. That percentage is up almost 20 points from the early 1980s. And contrary to what the Obama White House team suggested during the election campaign, this leap is not due to the aging of the population. In fact, only about one-tenth of the increase is due to upticks in old-age pensions and health-care programs for seniors.

Instead, the country has seen a long-term expansion in public reliance on "means-tested" programs—that is, benefits intended for the poor, such as Medicaid and food stamps. At this writing, about 35% of Americans (well over 100 million people) are accepting money, goods or services from "means-tested" government programs. This percentage is twice as high as in the early 1980s. Today, the overwhelming majority of Americans on entitlement programs are taking "means-tested" benefits. Only a third of all Americans receiving government entitlement transfers are seniors on Social Security and Medicare.

• As entitlement outlays have risen, there has been flight of men from the work force. According to the Bureau of Labor Statistics, the proportion of adult men 20 and older working or seeking work dropped by 13 percentage points between 1948 and 2008.

The American male flight from work is so acute that more than 7% of men in their late 30s (the prime working age-group) had totally checked out of the workforce, even before the recent recession. This workforce opt-out, incidentally, was more than twice that of contemporary Greece, the poster child for modern welfare-state dysfunction. The share of 30-somethings neither working nor looking for work appears to be higher in America than in practically any Western European economy.

• Arithmetically speaking, the recent American flight from work has largely been a flight to government disability programs. According to the Social Security Administration, the number of working-age Americans relying on Social Security's disability programs has increased dramatically over the past two generations.

In December 2012, more than 8.8 million working-age men and women took such disability payments from the government—nearly three times as many as in December 1990. For every 17 people in the labor force, there is now one recipient of Social Security disability program payments.

But the pool of working-age government disability recipients may be even larger than those getting funds just from the Social Security disability programs alone. The Department of Health and Human Services reports that more than 12.4 million working-age Americans obtained disability income support from all government programs in 2011. That's more than the total number of employees in the manufacturing sector of the economy.

• In recent years, the biggest increases in disability claims have been for "musculoskeletal" problems and mental disorders (including mood disorders). But as a practical matter, it is impossible for a health professional to ascertain conclusively whether or not a patient is suffering from back pains or sad feelings. The government's disability-insurance programs were intended to address genuine need. On the current trajectory, the Social Security disability fund is projected to run out of money during Mr. Obama's second term.

• The president and others describe Social Security and Medicare as "social insurance" programs rather than transfer schemes. True, the eventual beneficiaries of these programs contribute payroll taxes to the Social Security and Medicare trust funds during their working lives. But "insurance" programs are meant to pay for themselves; Social Security and Medicare cannot do so.

#2 Niner National

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Posted 25 January 2013 - 10:36 AM

Yeah its a bad situation.

I'm all for evaluating programs, making cuts, and making reforms. I think many of these programs need to exist, but there need to be changes.

I would also like to see us cut the child tax credit and other write-offs for having children (like being able to write-off daycare costs).

#3 Floppin

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Posted 25 January 2013 - 10:45 AM


• The president and others describe Social Security and Medicare as "social insurance" programs rather than transfer schemes. True, the eventual beneficiaries of these programs contribute payroll taxes to the Social Security and Medicare trust funds during their working lives. But "insurance" programs are meant to pay for themselves; Social Security and Medicare cannot do so.


Well, I haven't read all of these point, but I did happen to notice this one. Which is complete horseshit. If they are all as rooted in bullshit as this one, then it's likely a bullshit fluff article.

The fact is that Social Security is solvent, and would continue to be solvent for another 24 years without any restructuring. Social Security has a 2.6 trillion dollar reserve for payments that don't add to the national debt, theoretically.

But here's the catch, our government has USED (or borrowed, however you want to phrase it, it's not there) that money rather than keeping it truly in reserve, so now when the public has to collect money from the program it does actually add to our debt because the government has to borrow more money in order to pay it since, you know, they have already stolen all the money out of the program.

The point is that Social Security, in itself, is a solid program and isn't a drain on government funds, the problem is that the government stole from the Social Security fund in order to fund it's other overzealous spending.

#4 Happy Panther

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Posted 25 January 2013 - 10:47 AM

My worry is what will the country look like if the trend continues.

#5 Floppin

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Posted 25 January 2013 - 10:49 AM

For a better explanation of the Social Security point that I was making.



For most of the past 30 years, since the reforms designed by the 1982 Greenspan Commission to extend Social Security’s solvency, the system has collected more in revenue from Social Security taxes on workers than it has paid out in benefits to retirees, widows, orphans, and the disabled.
The excess revenues did not go into “an ironclad lockbox where the politicians can't touch them,” as Al Gore proposed as a presidential candidate back in 2000.
As a Congressional Research Service (CRS) report explained in 2000, “Contrary to popular belief, Social Security taxes are not deposited into the Social Security trust funds ... Along with many other forms of revenues, these Social Security taxes become part of the government’s operating cash pool, or what is more commonly referred to as the U.S. treasury. In effect, once these taxes are received, they become indistinguishable from other monies the government takes in.”
But the Social Security revenues are “accounted for separately through the issuance of federal securities to the Social Security trust funds … but the trust funds themselves do not receive or hold money. They are simply accounts.”
By the end of last year, those securities, or bonds, amounted to $2.6 trillion, the number Becerra used.
The bonds earn interest. That interest — essentially paid by the federal government to itself and amounting to $117 billion last year — helps pay for the benefits.
Last year — partly due to high unemployment and the aging of the population — Social Security taxes collected (nearly $640 billion) were less than the benefits paid out (more than $701 billion). The system had a “negative net cash flow.”


http://www.msnbc.msn...y/#.UQKnUL_C0wA

#6 Kurb

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Posted 25 January 2013 - 11:05 AM

Yeah its a bad situation.

I'm all for evaluating programs, making cuts, and making reforms. I think many of these programs need to exist, but there need to be changes.

I would also like to see us cut the child tax credit and other write-offs for having children (like being able to write-off daycare costs).


I agree! In 6 yrs no more daycare write offs !

#7 Delhommey

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Posted 25 January 2013 - 12:08 PM

Life will be so much easier once we grow up and realize we can't legislate our way back to being the only superpower in the world...

#8 Toolbox

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Posted 25 January 2013 - 12:36 PM

I am on disability and even I agree something must change with the welfare system.

#9 Cary Kollins

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Posted 25 January 2013 - 01:42 PM

Cherry-picked stats from a conservative commentator. Not to mention he is entirely ignorant about how Social Security works or funds itself.

There needs to be entitlement reform...but the sky is not falling as many on the far right would have you believe.

#10 MadHatter

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Posted 25 January 2013 - 01:52 PM

Cherry-picked stats from a conservative commentator. Not to mention she is entirely ignorant about how Social Security works or funds itself.

There needs to be entitlement reform...but the sky is not falling as many on the far right would have you believe.


Predictable response from the liberal idiots....disregard statistics and claim there is no issue.

With the number of people in this country paying no federal income taxes and the % of people in this country on government entitlement programs (49% of people pay no federal income tax and 35% of people are on means tested entitlment programs)....not to mention the astounding growth in people on these programs....only a complete and utter moron could make a statement that there is not a SERIOUS problem.

The programs were originally designed as temporary assistance programs to help people get back on their feet. However, they have turned into a means of generational support for MILLIONS of people in this country.

Keep offering the handouts and people will continue to accept them.

#11 thatlookseasy

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Posted 25 January 2013 - 02:01 PM

Are the issues with entitlement programs the sole cause of the problem or a symptom of rising income inequality over the past 20 years?

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#12 cookinwithgas

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Posted 25 January 2013 - 02:04 PM

You mean when we had a lot more evenly distributed resources in the US, we generally had our best economic times? And when there was a giant gap between the rich and the rest of us' access to resources, we had bad times?

That can't be true, as we all know, thanks to the Great Reagan, that making the rich richer makes us all richer!

#13 Cary Kollins

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Posted 25 January 2013 - 02:05 PM

^^Exactly. Old timer nimrods don't have the critical thinking necessary to understand why there are so many poor people that need assistance to me daily needs as opposed to living out on the street.

It's easier to hate the "takers" as opposed to assesing why there are so damn many poor people to begin with.

#14 mmmbeans

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Posted 25 January 2013 - 02:08 PM

Predictable response from the liberal idiots....disregard statistics and claim there is no issue.

With the number of people in this country paying no federal income taxes and the % of people in this country on government entitlement programs (49% of people pay no federal income tax and 35% of people are on means tested entitlment programs)....


with what... 100% crossover? wanna draw up that venn diagram?


jesus... talk about statistics.

#15 mmmbeans

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Posted 25 January 2013 - 02:12 PM

But the pool of working-age government disability recipients may be even larger than those getting funds just from the Social Security disability programs alone. The Department of Health and Human Services reports that more than 12.4 million working-age Americans obtained disability income support from all government programs in 2011. That's more than the total number of employees in the manufacturing sector of the economy.


i have no idea how i'm supposed to contextualize this. Is there some sort of ratio of disability workers to manufacturing jobs that needs to be met or time-space rips in two?


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