Wednesday, January 20, 2010

The Skeleton in the Closet

You know the old joke about how in every family there is something that nobody wants to talk about? Something that everyone simply ignores and hopes that it will go away?

Well, we Americans have one of those. It’s the problem that nobody wants to talk about. It’s a problem that politicians in particular don’t want to talk about because it means weighing equally unpopular options.

This is not a Democratic issue; it is not a Republican issue; it is not a Right Wing issue or a Left Wing issue. It is however an issue that every parent or grandparent should be concerned about. It is an issue that everyone who hopes to have a pleasant retirement should be concerned about.

It should be an issue that we, as a supposedly intelligent electorate, should be demanding be addressed.

The current National Debt is approximately $12 trillion. Yes that is trillion with a “T” and not a mere billion with a “B.” There are currently around 300 million people in the United States. Do the math. The debt represents a liability of $40,000 for every man woman and child in the country.

And it’s not about to get much better any time soon.

Before one can determine the solution to a problem, one must understand the nature of the problem and the factors driving that problem.

The National Academies Press has recently published the results of a joint study between the National Academy of Sciences (NAS) and the National Academy of Public Administration (NAPA) entitled “Choosing the Nation’s Fiscal Future” which address the nature of the National Debt problem and explores potential paths to avert catastrophe.

Allow me to quote from the summary.

“Over the long term, three major programs-Medicare, Medicaid and Social Security-account for the projected faster growth in federal spending relative to revenues.”

In other words what’s driving the federal budget deficit is the rising cost of health care and Social Security.

“The rapid growth of federal spending for health care is the largest contributor to the nation’s long-term fiscal challenge.”

So while Social Security is a problem, it’s not nearly as big a problem as the rising cost of health care.

“No reasonable foreseeable rate of economic growth would overcome this structural deficit.”

Trying to grow the economy, either with a Keynesian stimulus package or, the Supply Side approach, with massive tax cuts for the rich and famous is not going to solve the problem.

“Thus any efforts to rein in future deficits must entail either large increases in taxes to support these programs or major constraints on their growth-or some combination of the two.”

Most likely the least painful approach would be to first get health care under control and then raise taxes. The only questions are “how” and “by how much.”

Please note that this is precisely what Obama is trying to do and what the Republicans are fighting tooth and nail against. Both the House and Senate bills address limiting the rate of Medicare cost increases.

And they do so without “Death Panels.”

The Congressional Budget Office estimates that either the House or Senate bill would lead to over $130 billion in budget reductions over the next 10 years and then continued reductions for the next decade although the CBO appears to believe that the Senate version would have greater budget reductions in the next decade than the House bill.

Please also note why the so-called Tea Party types don’t understand the problem. They are saying “cut taxes” and “don’t you dare touch my Medicare” at the same time. This is 180 degrees out of phase with what the National Academies is saying needs to be done.

I guess you could cut taxes and gut Medicare but I doubt anyone would be in favor of that.

Allow me to explain this very carefully. These people are adamantly opposed to legislation which would address what they claim is their primary concern, limiting the growth in government spending. Why? Because they’ve bought into the Fox News bullshit.

Allow me to explain this very carefully also. Fox News is not interested in the welfare of the country or the welfare of the middle class and working class people they try to inflame. They are a front for the fat cat Pro-business branch of the Republican Party.

If you simply assume that everything Fox News tells you about politics and economics is designed to pick your pocket and make some rich guy richer, you’ll be on pretty safe ground.

Please also note that the situation we’re in is also not being adequately explained to the American Public.

I thought the CNN reporter that tried to explain to the Tea Party protester that he was protesting against his own best interest, and got crucified for “not being impartial,” was right to do what she did. Who ever said that “balanced reporting” meant not telling the American Public the truth?

This is where the media has abdicated its responsibility. We all have day jobs and families to take care of so a little help here would be appreciated guys. If you folks could just raise a flag when there's something we need to know and then give us the straight scoop, it would help a lot.

I believe there are enough Americans with enough intelligence and education to understand the situation if someone would explain it properly. After all, this is a lot simpler than evolution and, according to Pew Research, 61% of the population accepts that.

Most of the guns and religion crowd is probably not going to believe those elitist experts from the NAS and NAPA and will listen to the nonsense that Fox News broadcasts anyway. If we get enough people to understand the problem, and the rationale behind the solution, we can safely ignore them while they groan and yell in the outer darkness. We can relegate them to the fringe rather than the mainstream.

What we need around here is a real life “Ignore List.”

Don’t take my word for this. Please go and read the report for yourself at

1 comment:

Anonymous said...

Good day, sun shines!
There have were times of hardship when I didn't know about opportunities of getting high yields on investments. I was a dump and downright pessimistic person.
I have never imagined that there weren't any need in big initial investment.
Now, I feel good, I started take up real income.
It gets down to select a proper partner who uses your funds in a right way - that is incorporate it in real business, parts and divides the income with me.

You can get interested, if there are such firms? I have to tell the truth, YES, there are. Please get to know about one of them: [url=]Online Investment Blog[/url]