Monday, August 24, 2009

Getting Honest About Social Security - Part 3

We begin with the Congressional Budget Office's Estimate of the President's Budget (above). Why wait until tomorrow? It's on the CBO's website at http://cbo.gov/?

You will recall from Part 2, that entitlement spending (aka mandatory spending) is comprised of the following:

Entitlement Spending, at $1.595 trillion in FY 2008, is over half of the U.S. Federal Budget. The largest entitlement spending programs based on FY 2006 were Social Security and Medicare, as follows:
  • Social Security - $544 billion
  • Medicare - $325 billion
  • Medicaid - $186 billion
  • All other mandatory programs - $357 billion. These programs include Food Stamps, Unemployment Compensation, Child Nutrition, Child Tax Credits, Supplemental Security for the blind and disabled, Student Loans, and Retirement / Disability programs for Civil Servants, the Coast Guard and the Military
In FY 2009 and 2010 alone, entitlement spending is projected to exceed government revenue by some $290 billion. So the United States is facing a budget deficit, in just two years, before spending one dime on our defense, education, veterans pensions, and other vital programs. And this wasn't supposed to happen for another 31 years?

Is anyone still seriously considering dumping another $1 trillion dollars into this government-run ponzi scheme?

Obama said he wanted an 'honest debate' on his health care proposal. Well, here's the problem. We can't afford to waste another dollar on some misguided government program, no matter how noble. Social Security is little more than a government-run Ponzi Scheme. Medicare is only 1/2 funded by premiums. Isn't Medicare an example of government-run health care?

What kind of health insurance company would only collect 1/2 of what it spends on claims year-after-year, after year? I'll tell you. A government-run health insurance company. Like that commercial says Mr. president, "You Need A Plan!"

Solutions abound, but what Obama is proposing isn't one of them.

To even begin an 'honest' discussion on Social Security, Medicare, Government Option Health Care, or any other 'reform' proposed by ‘government workers’, you first need to get honest with the public, and then your proposals had better include the following:

  • Reductions in government spending
  • Reductions in government programs
  • Privatization of government entitlement programs
  • Budget balancing initiatives
  • Incentives for private investment
  • Incentives for private business growth
  • Incentives for private job creation
  • and, Policies that promote individual liberty



Sunday, August 23, 2009

Getting Honest About Social Security – Part 2

What are Entitlements?

Entitlement Spending, at $1.412 trillion in FY 2006, is over half of the U.S. Federal Budget. The largest entitlement spending programs are Social Security and Medicare, as follows:

  • Social Security - $544 billion
  • Medicare - $325 billion
  • Medicaid - $186 billion
  • All other mandatory programs - $357 billion. These programs include Food Stamps, Unemployment Compensation, Child Nutrition, Child Tax Credits, Supplemental Security for the blind and disabled, Student Loans, and Retirement / Disability programs for Civil Servants, the Coast Guard and the Military

How Is Social Security Funded?

Social Security is funded through payroll taxes. Through 2017, Social Security collects more in tax revenues than it pays out in benefits because there are 3.3 workers for every beneficiary. However, as Baby Boomers start to retire and draw down these benefits, there will be fewer workers to support them. By 2040, the revenues to pay for Social Security will be less than the expenditures.

How Is Medicare Funded?

Unlike Social Security, Medicare payroll taxes and premiums cover only 57% of current benefits. The remaining 43% is financed from general revenues (i.e. including any surplus remaining from Social Security). Because of rising health care costs, general revenues will have to pay for 62% of Medicare costs by 2030.

Medicare has two sections:

  • The Medicare Part A Hospital Insurance program, which collects enough payroll taxes to pay current benefits.
  • Medicare Part B, the Supplementary Medical Insurance program, and Part D, the new drug benefit, which is only covered by premium payments and general tax revenues.

How Will the FY 2008 Budget on Entitlement Spending Affect the U.S. Economy?

Through 2012, entitlement spending is budgeted at about 10.5% of GDP, with payroll tax revenue at about 6.5% of GDP, so that these unfunded obligations add to the general budget deficit. For example, in FY 2006 Social Security brought in $608 billion in “off-budget," extra funds from payroll taxes. However, other entitlement programs had expenses that far outweighed this “extra” revenue, creating a mini-deficit of $574 billion within the entitlement spending budget alone. The amount increases to $784 billion by 2012.

Long-term Impacts

Long-term, however, the impact of doing nothing about these burgeoning unfunded mandates will be huge. The first Baby-Boomer turns 62 this year, and becomes eligible to retire on Social Security benefits. By 2025, those aged 65+ will comprise 20% of the population.

As Boomers leave the work-force and apply for benefits, three things happen:

  1. The percentage of the labor under 55 stops growing, providing less payroll taxes to fund Social Security.
  2. GDP growth declines to less than 2% due to fewer workers.
  3. By 2040, Social Security alone brings in less than it spends.

Getting Honest

Obama has stated that any further debate on his health care reform proposals needs to be “honest debate”. He implies that critics have been dishonest, which means we’re just lying.

In looking at the facts above, one need only ask the following question:

Are the budgetary problems facing ‘government workers’ in Washington, DC caused by the private sector, or by the government?

Obama wants to overthrow the private health insurance industry and fold it into a government run entitlement. Yet, the federal government has proven itself incapable of managing its current programs. How is adding more of the burden to the government going to resolve the baby boomer issue?

With all due respect, as a wise man once stated,
“government is not the solution to our problems, government is the problem.”

What we need to be discussing is a way to turn over the government’s primary entitlements: Social Security and Medicare to the private sector, not the other way around. If not, the next thing ‘government workers’ will be proposing is how they can fold State, and private pension money into the black hole of the Social Security Ponzi Fund.

Obama’s solution: Solve a problem by compounding it. “We have to spend more money to keep from going bankrupt.”

American’s are simply saying, “No”.

Getting Honest About Social Security - Part 1

Reality

The maximum social security benefit for 2009 for a person retiring at full retirement age (66) is $2,323. This is based on earnings at the maximum taxable amount for every year after age 21.

Analysis based on maximum benefits:

  • The total paid into the system by, or on behalf of, the recipient by the age of 66 is $266,377 ($235,042 of this since 1980).

  • The total paid in by the age of 66 with 3% compound annual interest is $394,785.

  • By the age of 74, the recipient will receive a full return of the amount paid in on their behalf without interest.

  • By the age of 77, the recipient will receive a full return of the amount paid in on their behalf with interest compounded at 3% annually.

  • Assuming the funds continue to receive a return of 3% through the annuity phase, the funds would last up to the age of 80.

So by the age of 74 the total paid in by the recipient plus amounts matched by employers are exhausted. If the government were able to achieve a meager 3% rate of return, the total savings at the time of retirement would be exhausted by the age of 77. Assuming a 3% return on investment during the annuity phase, the funds should last through the age of 80.


However, in reality, the average monthly benefit for social security recipients is only $1,061 per month or $12,732 per year in 2009. There are currently some 51.8 million recipients receiving some $55.0 billion in benefits each month.


Dishonesty

The only problem and it is a major problem, in fact it is a problem many times worse than the alleged health care crisis, is the fact that the government has stolen the Social Security Trust Fund. There is no trust fund. There are ‘no’ dollars in savings for the government to invest and receive even a meager 3% return. Every dollar paid into the fund this month will be spent this month, and then some.

Worse than that, the Federal Government has run up a National Debt of $11 trillion, and intends to increase this debt by another $9 trillion over the next 10 years. With the peak of baby boomers hitting retirement age in 2019, a $20 trillion National Debt, longer life expectancies, and a smaller workforce, how are politicians going to be able to keep this “ponzi” scheme going?

Honesty

It is clear to me that Washington, DC cannot be trusted with taxpayer’s money. We need to get the Federal Government the heck out of the retirement business. And don’t even talk to me about letting the government take over health care. I’m not hearing it.

We need to work on solutions that will allow American citizens to save for their own retirement, and to be able to pay for their own health care. At the same time, we have to figure out how to untangle ourselves from this massive ponzi scheme which politicians have gotten us into.

As far as I’m concerned, any solution that involves spending another dollar of taxpayer’s money better include a detailed cost benefit analysis. Any solution to the problems of our time that doesn’t involve drastic cuts in spending by the federal government is not a solution.

To even begin an honest discussion on social security, Medicare, health care or any other political issue being discussed these days, ‘government workers’ had better get honest with the public, and their proposals had better include the following:



  1. Reductions in government spending

  2. Reductions in government programs

  3. Privatization of government entitlement programs

  4. Budget balancing initiatives

  5. Incentives for private investment

  6. Incentives for private business growth

  7. Incentives for private job creation

  8. Policies that promote individual liberty

References:

http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser/std_adp.php?p_faqid=5&p_created=955050377

http://www.socialsecurity.gov/OACT/COLA/cbb.html

http://larrymwalkerjr.blogspot.com/2009/08/cbo-and-our-common-welfare.html

http://www.cbo.gov/doc.cfm?index=10297

http://www.usnews.com/articles/opinion/mzuckerman/2009/08/10/deficit-means-massive-tax-hike-years-of-misery-if-obama-wont-cut-spending.html

Sunday, August 16, 2009

The CBO and Our Common Welfare

This blog was inspired today by comments made during Obama’s town hall event in Colorado. Here are the tweets that inspired this research:

Obama said, "despite all the scare tactics out there, what is truly scary is if we do nothing." I said, “Isn't this a scare tactic?”

Obama said, "spread the word, knock on doors, to help enact his health coverage plan.” I said, “It might help if he actually had a plan, no?”

Obama said, "health care costs are the biggest part of federal deficit and debt?" I said, “Defense and interest on the debt are right behind.”

Obama again states: "nobody is talking about a government takeover of health care." I said, “Nobody as in Congress via H.R. 3200?”

My summary of Obama’s town hall meeting: “Let's all get behind this idea of spending money that we don't have, on a reform plan that hasn't been written.”

Afterwards I watched the following CBO webcast, The Long-Term Budget Outlook, and studied the cost projections for Medicare, Medicaid, Social Security, and Interest on the Debt. After all of this, I am convinced that our government is on the wrong track.

Link to CBO Video

The issue should not be how to include more people in entitlements while cutting costs (an impossible feat). But rather how to create incentives to make people more self-sufficient so that they will not need to depend on the government? In other words, the focus needs to be on reducing the number of people covered by government entitlements, reducing government size and spending, and increasing government revenue to extinguish the debt.

In
Mortimer Zuckerman’s USA Today column entitled, “The Coming Government Debt Bomb” [Spending must be cut, or surging deficit could leave U.S. deep in the red for years], he states the following:

The nonpartisan Congressional Budget Office reckons that the deficit will run for a decade and will still exceed $1.2 trillion in 2019. By that time, the United States will have virtually doubled its national debt, to over $17 trillion. Then, after 2019, we get another turn of the screw as the peak waves of baby boomers move into their retirement years and costs soar for the major entitlements, Social Security and Medicare.

At 41 percent of GDP in 2008, the accumulated federal debt will rise to 82 percent by 2019. One out of every 6 dollars spent then by the feds will go to interest, compared with 1 in 12 dollars last year. These out-year budgets will require an increase in everyone's income taxes, raising federal income taxes an average of $11,000 for families, a hike of 55 percent per household—a political impossibility. The Government Accountability Office estimates that by 2040, interest payments will absorb 30 percent of all revenues and entitlements will consume the rest, leaving nothing for defense, education, or veterans' pensions.

I know you don’t want to hear about private savings accounts versus Social Security. And you probably don’t want to hear about high deductible health insurance plans and health savings accounts. But the alternative being peddled by the Obama Administration and Congress is to increase government debt until it actually exceeds what our economy can produce in a year.


In other words they would rather bankrupt the United States, than face the fact that government cannot provide for the health and retirement needs of the people. And that's the bottom line - the government cannot provide for the health and retirement needs of any but the most needy. Come to think of it, seems to me that was the original plan.

I realize that this is counter to the Biden-Obamanomics view that, “we need to spend more to keep from going bankrupt,” but I live on planet earth. The track being followed by this government will create a new problem, i.e. what do we pay or not pay this month. A bankrupt government would create a more serious crisis than any we have ever faced. Listen to the hearing, read the legislation, study the numbers, and see what you think.
“Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for life.”
We can do this on our own if our government would get out of the way, and simply provide us with the incentives to provide for ourselves.

The bottom line on Obama's non-existent health care/insurance reform 'plan' - show us the 'plan' you are talking about, or stop talking.



Sunday, August 9, 2009

Obama Scores a Zero on Health Care Reform

Bombs on the Fundamentals


Barack Obama’s main argument and the key to his whole presidency seems to be this idea that health care reform will lead to economic recovery. However, what Obama has failed to do is to convince the American public, and mainly conservatives, that it was our present health care system that caused the economic recession of 2007. His failure to convince an intelligent public has caused him to score a big fat zero on fundamental logic.

Obama: "We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform."

Conservatives: We believe you create jobs by keeping taxes and regulation low, and litigation at a minimum. Americans succeed when government puts in place positive policies that encourage more freedom, and more opportunity.

Most of us were under the impression that the recession was caused by the failure of our financial system as specifically related to the housing market. We believe that our economy failed due to a combination of easy money, lax mortgage regulations, and the crash in home prices. We also believe that the problems that caused the housing/mortgage crisis have yet to be resolved.

Instead of focusing on the main problem, the one that actually caused our economy to buckle, along comes Barack Obama with the false premise that it was the lack of health care reform that caused the recession. American’s are however, unable to connect the dots. Some key questions are as follows:

  1. How did the lack of health care reform cause the present recession?
  2. How will health care reform lead to economic recovery?
  3. How do you define economic recovery?
  4. Why did Fannie Mae lose another $15 billion in the 2nd Quarter of 2009?
  5. How will passing ‘untested’ (unread) legislation restore America’s confidence in a broken federal bureaucracy?

It is precisely Obama’s inability to answer the above questions that has American’s like myself so ticked off. Instead of recognizing and focusing on the real crisis, Obama has created a make-believe crisis, and he is proposing a make-believe solution.

Will the Obama brand of make-believe health care reform help delinquent consumers pay their bills? Will it keep real interest rates down? Will it create jobs? Will it encourage more freedom and opportunity? Will it balance the current budget deficit?

When Obama can come to the table with a logical argument regarding his proposed government take over of the health care industry, I will be glad to sit down with him, and have a serious conversation. Until then he can look forward to more questions and more dissent.





Wednesday, August 5, 2009

Eligibility References

Larry Walker, Jr.
August 5, 2009

I have put together a few links to articles I have read recently regarding the eligibility issue. This is my tribute to honor the one-year anniversary of the first eligibility lawsuit filed by Philip J. Berg against Barack Hussein Obama, back in August of 2008.

Since not one single legal case has ever been tried, on the merits, in a court of law, I am left with a Constitution [that I once raised my hand and swore to protect, uphold and defend against all enemies both foreign and domestic], and a 'nation of cowards' who refuse to consider the facts.

This is by no means a comprehensive list, but rather a chronological backtracking of the articles which I have read most recently with regard to this subject. I should also point out that this is not the only topic I read about and reflect upon, but it's the one I chose to address here today.

Each title is a clickable link, followed by the first paragraph or two of the story. Read, learn, study, and think.



Obama’s father was never a US citizen, nor was he ever permanently domiciled in the US. At birth, Obama was a British citizen. [He's also been a Kenyan citizen and perhaps a citizen of Indonesia as well.] Obama admits his birth status was governed by Great Britain.

The question presented then is whether the US is willing to allow persons who were born without sole allegiance to the US to be Commander in Chief of our military.
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The SCOTUS decision in Wong Kim Ark has caused more confusion regarding the natural born citizen issue than any other case in US history. One particular passage has been fervently relied upon by Obama eligibility supporters in claiming the case establishes children of aliens – born in the US – as natural-born citizens.
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Do you remember Watergate? Thirty-five years ago this Sunday, U.S. President Richard M. Nixon submitted his letter of resignation for his role in the scandal. There was the crime – the break-in, and then there was the cover-up by the Nixon administration. There were threats, media manipulation and disinformation. It was the cover-up more than the crime itself in the aftermath of the Watergate break-in that led to the downfall of the Nixon administration. It was a politically critical time for our country, but we survived because of the strength of the U.S. constitution.

Now, we potentially face a new constitutional crisis stemming from the refusal of Barack Hussein Obama to produce a one-page document that would confirm his eligibility to hold the highest office in the land. Eligibility to hold office is not a “fringe” matter, but a core constitutional issue that lies at the very heart of a growing controversy.
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Editors Note: In December ‘08 a retired CIA officer commissioned an investigator to look into the Barack Obama birth certificate and eligibility issue. On July 21, 2009 westernjournalism.com obtained a copy of the investigator’s report. Here is an unedited version of the report. [updated July 18, 2009].
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In response to a direct question from WND, the Hawaii Department of Health refused to authenticate either of the two versions of President Obama's short-form Certificate of Live Birth, or COLB, posted online – neither the image produced by the Obama campaign nor the images released by FactCheck.org.

Janice Okubo, the public information officer for the Hawaii DOH, also had no explanation for why Dr. Chiyome Fukino's initial press release last October and subsequent press release last week also avoided declaring the posted images to be of authentic documents.
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With all the new media attention swirling around the issue of Obama’s eligibility to be President, I thought it might be helpful to re-release an important blog post I created back when my law suit was pending before SCOTUS. I’ve done this for two reasons.

1. The image that contains Obama’s admission of his birth status having been governed by Great Britain is being scrubbed from the web. It was highlighted originally at Obama’s own Fight The Smears website which has now vanished. The relevant admission appeared just below the Certification of Live Birth which he used to declare he was born in the US.
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The label of “birther” is fast becoming a noble badge of honor for millions of Americans who are not willing to let their Constitution die without a good ole patriot’s fight!

The leftist Obama propaganda press would love for you to believe that “birthers” are just a bunch of “crazy racists” that number in the hundreds, and that they have NO basis to demand proof of whom and what Barack Hussein Obama really is…

But the “birthers” actually number in the millions and the basis for their demands were set in stone by the men who wrote and ratified the US Constitution. If millions of American “birthers” are “right-wing nuts,” they are in good company with men like Thomas Jefferson, James Madison, John Adams and Ben Franklin.
...

The birth debate about Obama is real enough, but it is legally complicated, as analyzed by legal beagle Andrew McCarthy at National Review. No judge is going to question the Constitutional qualifications of an elected president. I'm sorry, but that's the practical reality. The judge is going to follow stare decisis -- the sheer weight of commitments that cannot be reversed without creating chaos. Once the political system of the United States, the voters, the media, and the politicians themselves are all committed to the proposition that Obama is president, trying to reverse it would mean riots in every city in the nation. At some point even debatable claims become irreversible. That is why Al Franken is now the US Senator from Minnesota, even if his election was corrupt and wrong. It's water under the bridge. Leave it to history.
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Assuming that Obama was born in the United States, he was not only born a dual national of the United States and Great Britain, but at present he continues to be such. Some maintain that American law on citizenship cannot be subjected to any foreign law. But such an argument does not resolve the question of Obama’s dual nationality, for each nation has the sovereign right to make its own citizenship laws and one nation cannot deny another nation that right. This point can be better understood when we consider that McCain was born in Panama to U.S. citizen parents and U.S. citizenship law declared him a U.S. citizen even though he was born in Panama and Panamanian law may have declared him a citizen of Panama. Neither Panama nor any other nation questioned the United States' right to pass a law that gave McCain U.S. citizenship by descent from his parents even though he was born in Panama. Great Britain, being a sovereign nation, has the same right as does the United States to pass such citizenship laws. Now let us examine the British law that applies to Obama and his father and which makes Obama a British citizen not only at the time of his birth in 1961 but still today.
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According to an AP story, Dr. Chiyome Fukino, Health Director with the Hawaii State Department of Health, has issued a new statement seeking to "stem a recent surge in the number of inquiries about Obama's birthplace." "I…have seen the original vital records maintained on file by the Hawaii State Department of Health verifying Barack Hussein Obama was born in Hawaii and is a natural-born American citizen….I have nothing further to add to this statement or my original statement issue in October 2008, over eight months ago." AP asserts that "Fukino issued a similar press release Oct. 31." However, in her statement in October Fukino said "I…have personally seen and verified that the Hawaii State Department of Health has Sen. Obama's original birth certificate on record in accordance with state policies and procedures." The original statement said nothing about the content of the birth record. The new statement therefore goes significantly farther than the original statement in October, though both the AP story and Fukino herself give the deceptive impression that it does not. Given this evident obfuscation, why should I or anyone else simply take Fukino's words at face value?
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Most readers of this blog know that I personally believe Obama was born in Hawaii and can prove it any time he sees fit. I have always believed that the BC issue was a smokescreen to control awareness of the fact that Obama was a British/Kenyan citizen at the time of his birth through his father who was never a US citizen.

This fact alone – as the Supreme Court made reference to in the Minor case (see below) – raises doubts as to whether a native born US citizen with a dual foreign nationality at the time of his birth can be President. The BC birther conspiracy theory has clearly and effectively shielded from view the true issue – which is a legal question, not a conspiracy theory.
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To conclude: Here's one that I wrote back in February of 2009.


Did you know that the Constitutional requirements to be a U.S. Congressman or U.S. Senator are different than the requirements to be U.S. President or Vice President?

The requirements may be found at the following website: click here.


The Constitutional requirements to become a U.S. Senator or Congressman include having been a U.S. Citizen for a certain number of years. And, in order to be President or Vice President, the Constitution requires that one be a Natural Born Citizen and a resident for a certain number of years.


Now is it possible that the terms Citizen and Natural Born Citizen are synonymous? Were our founding fathers just a bunch of poorly educated, bumbling idiots, who used complicated words just to confuse the masses? Do you really know the difference? Do you care about protecting, defending and upholding the United States Constitution?


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