Wintery Knight

…integrating Christian faith and knowledge in the public square

Will the Social Security and Medicare programs be there for young Americans?

Of course not, and the voting in Democrats that they seem to like to do is making it worse.

Here’s an article from the Daily Signal to tell about it.

Chart first:

Social Security insolvent in 2024

Social Security insolvent in 2024

And now the story:

Social Security’s trustees projected in 1983 that the recently enacted Social Security reforms would keep the program active for at least the next 75 years, through 2058. However, according to research by Rachel Greszler, a senior policy analyst, and James M. Roberts, research fellow for economic freedom and growth at The Heritage Foundation, that approach date has accelerated.

“If the trend since 1983 continues, the program will become insolvent in 2024—34 years earlier than originally projected,” Roberts writes.

Now you might think that the way Democrats appeal to younger voters, that they are taking care of this problem for them.

Well, here’s an article from Investors Business Daily.

Excerpt:

The White House recently conceded that President Obama’s executive order effectively legalizing an estimated 5 million undocumented immigrants means that newly legalized workers will contribute to Social Security and Medicare and be eligible for benefits.

Does the president have any idea how much money his action could cost the country — i.e., taxpayers?

[…]The Social Security and Medicare Trust Fund trustees estimate the two program’s combined long-term unfunded liabilities — the estimated amount the government will have to pay in benefits above what it expects to receive — at about $49 trillion. Obama’s amnesty action greatly exacerbates the problem, because retirees get back far more than they pay in.

[…]Because the U.S. pays hundreds of thousands of dollars in retirement benefits, on average, for each new retiree, whether part of Obama’s amnesty program or not, the president has just vastly worsened the long-term financial condition of the country’s two primary retirement safety nets.

But Obama’s newly legalized workers will impose even heavier losses than Steuerle’s examples.

Most workers pay into the programs for their working careers, between 40 and 50 years. But millions of Obama’s newly legalized are working-age adults with children, so many could be in their 40s or older.

Thus they could pay FICA taxes for the next, say, 15 or 20 years — less than half the average American worker — and be eligible for the full array of Social Security and Medicare benefits.

In addition, most will be lower-income workers. The U.S. Bureau of Labor Statistics estimates that foreign-born, full-time workers earn about 80% of native-born Americans ($33,500 vs. $41,900).

Social Security is a social insurance program and is structured to provide disproportionately more benefits for lower-income workers. Medicare pays the same regardless of how much a worker pays in.

To be sure, these new workers’ entry will likely help the trust funds initially, because most will be paying in rather than taking out.

Under current rules, workers must pay FICA taxes for 40 quarters (10 years total) before being fully eligible for the programs. But within a few decades the oldest will start retiring.

Given the demographic unknowns, estimating the amnesty’s financial cost to our retirement programs — and so to U.S. taxpayers — can only be approximate.

But using a basic simulation model, we believe the government will receive about $500 billion in payroll tax revenue (including Part B and drug premiums), and expect it to pay out some $2 trillion in benefits over several decades.

Yeah, so they are actually making it worse. But hey, at least we have redefined marriage, right?

As if that were not enough, there’s this lovely story from CNS News.

Excerpt:

The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.

The only way the Treasury could handle the $942,103,000,000 in old debt that matured during the period plus finance the new deficit spending the government engaged in was to roll over the old debt into new debt and issue enough additional new debt to cover the new deficit spending.

This mode of financing the federal government resembles what the Securities and Exchange Commission calls a Ponzi scheme. “A Ponzi scheme,” says the Securities and Exchange Commission, “is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors,” says the Securities and Exchange Commission.

“With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue,” explains the SEC. “Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.”

Now you might ask yourself – are young people aware of these things? Of course not. What they learn in university is how to escape their repressive religious backgrounds by experimenting with risky, irresponsible sexual behavior. They are not aware of the situation, and when they vote, they vote like they were picking candidates on American Idol. I guess I can understand why young people act stupidly. They are concerned with what the culture tells them to be concerned about, and that’s legal baby-killing, redefining marriage to separate kids from their mom or dad, police shooting people who commit crimes, a nonexistent gender pay gap and global warming. What is appalling to me is when their parents vote Democrat… which is basically voting to have a higher standard of living for themselves, then passing the bill onto to their kids. It’s especially amazing when married women do this to their own kids. What are they thinking?

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Nancy Pelosi’s brother-in-law gets $737M of taxpayers’ money to build solar plant

From the UK Daily Mail.

Excerpt:

Nancy Pelosi is facing accusations of cronyism after a solar energy project, which her brother-in-law has a stake in, landed a $737 million loan guarantee from the Department of Energy, despite the growing Solyndra scandal.

The massive loan agreement is raising new concerns about the use of taxpayers’ money as vast sums are invested in technology similar to that of the doomed energy project.

The investment has intensified the debate over the effectiveness of solar energy as a major power source.

The SolarReserve project is backed by an energy investment fund where the Minority Leader’s brother-in-law Ronald Pelosi is second in command.

PCG Clean Energy & Technology Fund (East) LLC is listed as one of the investors in the project that has been given the staggering loan, which even dwarfs that given to failed company Solyndra.

Other investors include one of the major investors in Solyndra, which is run by one of the directors of Solyndra.

Steve Mitchell, who served on the board of directors at the bankrupt energy company, is also managing director of Argonaut Private Equity, which has invested in the latest project.

Since Solyndra has filed for bankruptcy has been asked to testify about the goings on at the firm by two members of the House and ‘asked to provide documents to Congress’.

[…]The project approval came as part of $1 billion in new loans to green energy companies yesterday.

Did they learn anything from Solyndra? No:

‘The administration’s flagship project Solyndra is bankrupt and being investigated by the FBI, the promised jobs never materialised, and now the Department of Energy is preparing to rush out nearly $5 billion in loans in the final 48 hours before stimulus funds expire — that’s nearly $105 million every hour that must be finalised until the deadline,’ said Florida representative Cliff Stearns, who is chairman of the investigations subcommittee of the House Committee on Energy and Commerce.

Since Nancy Pelosi took over federal spending in January 2007, the national debt has increased from $8.5 trillion to about $17.5 trillion. That’s NINE TRILLION dollars in new spending. And much of it just handed off to the people and groups who got the Democrats elected 2008 and 2012.

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Socialism in France: economy contracts by largest amount in four years

Here’s the BBC with some bad news for Europe.

Excerpt:

Germany’s economy slowed to “near stagnation” last month, while France’s recorded its biggest contraction for four years, according to a closely watched survey.

The Markit composite purchasing managers’ index (PMI), which measures both the manufacturing and services sectors, declined to 50.6 in Germany last month, from 53.3 in February.

Any figure above 50 indicates growth.

France’s reading fell to 41.9 points, its worst since March 2009.

For the eurozone as a whole, the index fell to 46.5 from 47.9 in February.

Chris Williamson, chief economist at Markit, said the latest data painted a gloomy picture.

“The [eurozone] recession is deepening once again as businesses report that they have become increasingly worried about the region’s debt crisis and political instability,” he said.

“The unresolved election in Italy was commonly cited as a key factor clouding the economic outlook in March, and the botched bail-out of Cyprus could well filter through to a further worsening of business sentiment across the region in April.”

Mr Williamson added that the weak showing from Germany “suggests that the only source of bright light in an otherwise gloomy region has once again begun to fade”.

Germany’s index reading was the worst in the country for three months.

The French socialist government has also been rocked by a scandal:

It is hard to think of a worse scandal for the Socialist government in France. As “President Normal” and “Mr Fair”, François Hollande’s whole being and essence was to crack down on tax evasion and financial corruption, making the wealthy pay their share in dragging France out of its economic woes. Riding his scooter, living in his modest flat and taking a salary cut, Hollande had promised that, unlike Nicolas Sarkozy before him, his presidency would be “exemplary”, squeaky clean, and totally just.

But now Jerome Cahuzac, the trusted tax tsar and budget minister who had vigorously led Hollande’s crusade against fraudsters and tax-dodging millionaires, has made a shock confession of his own monumental fraud. With investigators and journalists closing in on the truth, he admitted hiding €600,000 (£509,000) from the taxman in a secret foreign account for 20 years. Not only that; Cahuzac had spent the past four months repeatedly lying on TV and to parliament, where he insisted from the government benches: “I do not have, I have never had, an account abroad, not now, not ever.”

Last year, France decided to elect a socialist prime minister named Francois Hollande, and then the people of France voted to give him a socialist majority in Parliament. And now we are seeing the results of that decision. Hollande’s priorities are things like a 75% income tax rate, hiring 60,000 new unionized teachers, lowering the retirement age back to 60, and massive spending on government-owned housing. It doesn’t look like his plan is working to grow the French economy.

Filed under: News, , , , , , , , , , , , , , , , ,

New housing bubble: Obama proposes lowering mortgage-lending requirements

I must have blogged a million times about how the Democrats caused the recession by forcing banks to make bad loans to people who couldn’t pay them back. Although the Republicans got blamed for the crisis, they were the ones who tried to regulate Fannie Mae and Freddie Mac, but they were shut down by Democrats. Well, guess what? The Democrats didn’t learn their lesson the first time, and they want to start another housing bubble, just like the first one that gave us the recession.

Take a look at this article in the leftist Washington Post. (H/T ECM)

Excerpt:

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

[…][A]dministration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.

“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.

And if that was not enough,the Democrats also have another bubble being inflated. They nationalized the student loan industry, and now taxpayers are going to have to bail out those risky unpaid student loans as well.

Excerpt:

America’s now-nationalized student loan industry just reached a value of $1 trillion, according to Citigroup, growing at a 20 percent-per-year pace. Since President Obama nationalized the industry (a tacked-on provision of the Obamacare bill), tuition has gone up 25 percent and the three-year default rate is at a record 13.4 percent.

[…]With many young people unable to pay their loans (average graduating debt is about $29,000), Citigroup and others are speculating that this industry might be ripe for a bailout.

To pay off all the current defaults, Citigroup says it would cost taxpayers $74 billion. However, this number doesn’t include those who will default in the coming years, and, when the government rewards the defaulters, it will encourage more borrowers not to pay their debts.

And liberals in Congress have proposed forgiving all student loans via “The Student Loan Forgiveness Act 2012,” costing taxpayers $1 trillion.

Adding another $1 trillion dollars to the national debt isn’t exactly “forgiveness” for young people—it’s prolonging the payoff. In fact, student loan bailouts are a catch-22 for young people because they’re going to be held accountable for paying off the national debt and interest payments.

At least the young people who voted for Obama are going to be the ones to get the bill for his socialist economic policies.

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