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?

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

Obama’s debt: federal debt up over 7 TRILLION dollars since January 2009

CNS News has the story.

Excerpt:

The total federal debt of the U.S. government has now increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president.

That is more than the debt increased under all U.S. presidents from George Washington through Bill Clinton combined, and it is more debt than was accumulated in the first 227 years of this nation’s existence–from 1776 through 2003.

The total federal debt first passed the $7-trillion mark on Jan. 15, 2004, after President George W. Bush had been in office almost three years.

[…]The $7,060,259,674,497.51 in new debt that the federal government has taken on during Obama’s presidency equals $61,341.82 per household.

The median household income in the United States in 2012 (the latest year estimated) was $51,017. Thus, President Obama has increased the federal debt by more than the typical household’s annual income.

I sometimes get annoyed by the fact that the stock market hasn’t tanked under Obama in the last 6 years, but there is a reason why. The reason is that he has borrowed and spent SEVEN TRILLION dollars. This makes the lack of economic growth caused by his anti-business policies, e.g. – Obamacare, look less harmful than they are. If you were in debt 30,000 and borrowed another 20,000 and started buying cars and taking vacations, you’d look pretty good. That’s basically what this President did. We look OK, but only because he borrowed $7 trillion from the next generation of Americans.

Filed under: News, , , , , ,

New study: Half of children born last year will see their parents split by age 15

Dina tweeted this post from the UK Daily Mail.

Excerpt:

Children born last year are more likely than any previous generation to see their parents split up, research suggests.

Nearly half will experience family breakdown, according to a report by the Marriage Foundation think tank.

Its researchers estimate that 354,000 out of the 729,674 children born in England and Wales in 2012 will have parents who are separated by the time they reach the age of 15.

The report also suggests that married couples are much more likely to stay together than those who are unmarried.

The vast majority of children whose parents will still be together by their mid-teens will have a mother and father who are married, the report said. Only 5 per cent will have unmarried parents.

Harry Benson, of the Marriage Foundation, said: ‘We continually hear about divorce rates shooting up and causing the exponential rise in family breakdown, but this is demonstrably not the case.

‘The percentage of marriages ending in divorce has actually fallen since 2005 to 42 per cent. For all marriages lasting over ten years, the divorce rate has barely changed since the 1960s.

‘It is the declining rates of marriage which provide the only conceivable explanation of the doubling of family breakdown since the 1980s.

‘Of the teenagers not living with both parents, just 32 per cent of cases involved divorce.’

Last week a report by the  chief inspector of schools Sir Michael Wilshaw linked social problems in Britain to bad parenting. He criticised ‘hollowed-out and fragmented families’ where parents suffer a ‘poverty of accountability’.

Sir Michael said many children were ‘alienated’ from their fathers, and warned of social problems resulting from ‘making excuses’ for bad parents.

‘Some people will tell you that social breakdown is the result of material poverty – it’s more than this,’ he said.

‘These children lack more than money: They lack parents who take responsibility for seeing them raised well. It is this poverty of accountability which costs them.

‘These children suffer because they are not given clear rules or boundaries, have few secure or safe attachments at home, and little understanding of the difference between right and wrong behaviour.’

Findings from the Centre for Social Justice have shown as many as one million children are growing up without a father.

I think that if we really want children to have what they need, then we have to take a very strong position on the tolerance and non-judgmentalism that is so popular among the social left today. Because we are tolerant and non-judgmental, 53 million unborn children are dead. Because we are tolerant and non-judgmental, a record number of children are being raised without their mother or their father (or both). Because we are tolerant and non-judgmental, children are being saddled with the costs of fixing the results of irresponsibility decisions made by adults. Because we are tolerant and non-judgmental, we have run up a $17 trillion dollar debt so that the President can congratulate himself on how generous he is by spending money that other people earned (or will have to earn).

Maybe we need to stop thinking about being liked by our peers and start thinking about doing what’s right for children – born and unborn. A good first step would be to view anyone who espouses moral relativism as an evil, destructive, selfish and foolish person. When a woman brags to you about how she doesn’t judge anyone, you should look at her as someone immoral who cannot see the difference between policies/choices that harm children, and policies/choices that help them. At the very least, you should never marry someone who supports redefining marriage to include no-fault divorce and same-sex marriage. You should never marry someone who supports paying people taxpayer money to have children out of wedlock.

If a person cannot see how natural marriage protects children, then don’t marry them. We need to shame people who don’t protect children. It doesn’t matter what they say to you in order to sound nice. It only matters that they won’t condemn things that are clearly wrong. That makes them a threat to children, and unsuitable for marriage.

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

Poland seizes bond investments in private pension plans

Amy sent me this story from Reuters.

Excerpt:

Poland said on Wednesday it will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, many of them foreign-owned.

The changes went deeper than many in the market expected and could fuel investor concerns that the government is ditching some business-friendly policies to try to improve its flagging popularity with voters.

The Polish pension funds’ organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation.

Announcing the long-awaited overhaul of state-guaranteed pensions, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings.

He said that what remained in citizens’ pension pots in the private funds will be gradually transferred into the state vehicle over the last 10 years before savers hit retirement age.

The reform is “a decimation of the …(private pension fund) system to open up fiscal space for an easier life now for the government,” said Peter Attard Montalto of Nomura. “The government has an odd definition of private property given it claims this is not nationalisation.”

I was looking for someone who could take the spin off of this and found this article on Zero Hedge.

Excerpt:

While the world was glued to the developments in the Mediterranean in the past week, Poland took a page straight out of Rahm Emanuel’s playbook and in order to not let a crisis go to waste, announced quietly that it would transfer to the state – i.e., confiscate – the bulk of assets owned by the country’s private pension funds (many of them owned by such foreign firms as PIMCO parent Allianz, AXA, Generali, ING and Aviva), without offering any compensation. In effect, the state just nationalized roughly half of the private sector pension fund assets, although it had a more politically correct name for it: pension overhaul.

[…]By shifting some assets from the private funds into ZUS, the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend.

It is nationalization, and we should expect to see a lot more of it as spendthrift governments start to run of road to kick the can down. Maybe even here at home, some day. The United States is already up against the debt limit now, and our credit has been downgraded twice already. How soon until IRAs are nationalized into Social Security to prop it up?

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Stephen Moore: Obama’s failing economy has hit his supporters the hardest

From the Wall Street Journal, a must-read.

Excerpt:

Each month the consultants at Sentier analyze the numbers from the Census Bureau’s Current Population Survey and estimate the trend in median annual household income adjusted for inflation. On Aug. 21, Sentier released “Household Income on the Fourth Anniversary of the Economic Recovery: June 2009 to June 2013.” The finding that grabbed headlines was that real median household income “has fallen by 4.4 percent since the ‘economic recovery’ began in June 2009.” In dollar terms, median household income fell to $52,098 from $54,478, a loss of $2,380.

What was largely overlooked, however, is that those who were most likely to vote for Barack Obama in 2012 were members of demographic groups most likely to have suffered the steepest income declines. Mr. Obama was re-elected with 51% of the vote. Five demographic groups were crucial to his victory: young voters, single women, those with only a high-school diploma or less, blacks and Hispanics. He cleaned up with 60% of the youth vote, 67% of single women, 93% of blacks, 71% of Hispanics, and 64% of those without a high-school diploma, according to exit polls.

According to the Sentier research, households headed by single women, with and without children present, saw their incomes fall by roughly 7%. Those under age 25 experienced an income decline of 9.6%. Black heads of households saw their income tumble by 10.9%, while Hispanic heads-of-households’ income fell 4.5%, slightly more than the national average. The incomes of workers with a high-school diploma or less fell by about 8% (-6.9% for those with less than a high-school diploma and -9.3% for those with only a high-school diploma).

To put that into dollar terms, in the four years between the time the Obama recovery began in June 2009 and June of this year, median black household income fell by just over $4,000, Hispanic households lost $2,000 and female-headed households lost $2,300.

The unemployment numbers show pretty much the same pattern. July’s Bureau of Labor Statistics data (the most recent available) show a national unemployment rate of 7.4%. The highest jobless rates by far are for key components of the Obama voter bloc: blacks (12.6%), Hispanics (9.4%), those with less than a high-school diploma (11%) and teens (23.7%).

This is a stunning reversal of the progress for these groups during the expansions of the 1980s and 1990s, and even through the start of the 2008 recession. Census data reveal that from 1981-2008 the biggest income gains were for black women, 81%; followed by white women, 67%; followed by black men, 31%; and white males at 8%.

[…]Mr. Obama has often contemptuously, and wrongly, branded the quarter-century period of prosperity beginning with the presidency of Ronald Reagan as a “trickle down” era. For many in the groups that Mr. Obama set out to help, a return to the prosperity of that era would be a vast improvement.

The Census Bureau data on incomes include cash government benefits, such as unemployment insurance, disability payments and the earned-income tax credit (but excludes Medicaid and food stamps). Most of the cash programs have surged in cost during the Obama presidency, yet incomes have still declined for the lowest-income eligible groups. This suggests that wages and salaries from employment have shrunk at an even faster pace than the Census data show. The shrinking paychecks of the past four years are consistent with two unwelcome anomalies of the recovery: a swift decline in labor-force participation to 63.4% from 65.5% during that period and a rise in part-time employment.

What all of this means is that the stimulus-led economic revival that began officially in June 2009—Vice President Joe Biden’s famous “summer of recovery”—has only resulted in lower incomes for at least half of Americans, the very ones who were instrumental in electing Mr. Obama twice.

Guess what? Borrowing trillions from future generations to spend on Democrat-run sham companies like Solyndra doesn’t stimulate the economy. Shocking, I know. And yet that’s what we voted for.

Investors Business Daily explains how the President’s own policies are causing the troubles that his supporters are facing.

Look:

More than 250 employers have cut work hours, jobs or taken other steps to avoid ObamaCare costs, according to a new IBD analysis.

Mind the data have been the refrain from the White House as it downplays anecdotal reports of employers limiting workers to fewer than 30 hours per week.

But the anecdotes are piling high enough that they now constitute a body of data that can help gauge the impact of the Affordable Care Act’s employer mandate.

IBD is introducing ObamaCare Employer Mandate: A List Of Cuts To Work Hours, Jobs — a compilation of employers who have opted to restrict work hours to limit new liability for employee health coverage.

As of Sept. 3, this list has reached 258 — including more than 200 public-sector employers.

Almost all of those employers have cut the hours of part-time workers to below 30 per week — the point at which ObamaCare’s insurance mandate kicks in.

A few have cut payrolls to steer clear of ObamaCare’s 50 full-time-equivalent-worker definition of a large employer subject to employer fines. A few others have reduced staff while contracting with employment services firms to limit their ObamaCare exposure.

The Wall Street Journal explains how health care premiums, which Obama promised to LOWER by $2500, are up $3000.

Excerpt:

Central to ObamaCare are requirements that health insurers (1) accept everyone who applies (guaranteed issue), (2) cannot charge more based on serious medical conditions (modified community rating), and (3) include numerous coverage mandates that force insurance to pay for many often uncovered medical conditions.

[…]We compared the average premiums in states that already have ObamaCare-like provisions in their laws and found that consumers in New Jersey, New York and Vermont already pay well over twice what citizens in many other states pay. Consumers in Maine and Massachusetts aren’t far behind. Those states will likely see a small increase.

By contrast, Arizona, Arkansas, Georgia, Idaho, Iowa, Kentucky, Missouri, Ohio, Oklahoma, Tennessee, Utah, Wyoming and Virginia will likely see the largest increases—somewhere between 65% and 100%. Another 18 states, including Texas and Michigan, could see their rates rise between 35% and 65%.

While ObamaCare won’t take full effect until 2014, health-insurance premiums in the individual market are already rising, and not just because of routine increases in medical costs. Insurers are adjusting premiums now in anticipation of the guaranteed-issue and community-rating mandates starting next year. There are newly imposed mandates, such as the coverage for children up to age 26, and what qualifies as coverage is much more comprehensive and expensive. Consolidation in the hospital system has been accelerated by ObamaCare and its push for Accountable Care Organizations. This means insurers must negotiate in a less competitive hospital market.

Although President Obama repeatedly claimed that health-insurance premiums for a family would be $2,500 lower by the end of his first term, they are actually about $3,000 higher—a spread of about $5,500 per family.

So, every cloud has a silver lining, and the silver lining to this Obama-cloud is that at least the people who voted for socialism are facing the consequences of their own economic illiteracy. I hope they learn. But if they don’t learn now, then they’ll learn when the welfare and entitlements run out. I hope that the people who voted for our American Idol president will take a Thomas Sowell book out of the library and learn something about economics for a change.

UPDATE: From Ian B.: 40,000 Longshoremen (union workers) quit the AFL-CIO union. Socialism hurts employers? It’s all so unexpected! How could reality not match honeyed words and good intentions?

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

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