Saturday, July 7, 2012
Entitlements. Payback, or free stuff?
The largest part of the us budget are the entitlements. Those contribute more to the deficit than any other discretionary spending or the defense budget. Many of these entitlements were supposed to be self supporting. You paid into them, & when the time came, you collected. So why are they in trouble? If they are set up like an insurance program, you have actuarial numbers, statistics, & can determine what the premium needs to be to collect a certain amount. Insurance actuaries have done this for centuries, and made a profit. Why cannot the govt make simple mathematical calculations even with no profit?
The problem is that the govt has changed the program from a simple actuarial calculation to a pyramid scheme. They began to pay out more than was warranted by the amount paid in. These entitlement programs morphed into redistribution programs.. taking from the working class, & distributing to the takers, with plenty of corruption, fraud, & mismanagment built in.
This primarily concerns social security & medicare, since they are allegedly self funded. But with the astronomical growth of disability & medicaid, the programs are over stressed. They are no longer financially solvent. They are going bankrupt. To fix them, the amount that people pay in would need to be raised above what most people would find acceptable. Politicians do not want to raise taxes on people, but still want to promise the free stuff. They won't address the corruption & fraud, nor adjust the payout, so now we are in the current dilemma.
Those on disability have grown over 10 times over the last 10 yrs. Why? The workplace is no more dangerous. No, it has become the new welfare. A new market of lawyers who can get you on disability for a fee has arisen. People with a hangnail or hurt feelings apply for & get disability.
This illustrates why govt is not good at anything where money management is required. They only waste the taxpayers money, & let con men & fraudsters run rampant in the system.
What are the solutions? Here are a few options.
1. Let it ride. Let entitlements run rampant, throw more money at them, & let them bankrupt & collapse the system. Some who advocate the Cloward–Piven strategy actually support this option.
2. Audit it & tighten up the qualifications. Raise the age for retirement & medicare, & reduce the payouts so the numbers work.
3. Scrap the system. Get the govt out of the insurance business. They are fond of mandating things to us, so they can mandate that we invest in ira's or some other retirement plan. It seems they are already mandating insurance, so that should render medicare & medicaid obsolete.
Even if obamacare is rescinded, i'm certain we could come up with a better managed system than anything the govt manages. They are a magnet for corruption, inefficiency, & fraud. Let the private sector supply these commodities. The govt can provide fair regulations & competition, but they should not be running things. Healthcare & old age security are not divine rights in the constitution. They are market driven commodities.. things you can buy at your discretion. When you give away free stuff.. food, housing, or other commodities, there will always be people lined up to take it. It is not the function of govt to provide a life for everyone. If they secure our freedoms it is enough. We can build our own lives.
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on the majority always votes for the candidates promising the most benefits from the Public Treasury with a result that a democracy always collapses over loose fiscal policy always followed by dictatorship. The average age of the world's greatest civilizations has been 200 years." ~Sir Alexander Fraser Tyler
"No country can sustain in idleness more than a small percentage of its numbers. The great majority must labor at something productive." ~Abraham Lincoln