Tuesday, March 16, 2010

The Age of Insolvency

The Age of Entitlements is truly over. The Age of Insolvency has
arrived. Generation X, now reaching 40, is facing some extremely
serious problems. Unlike our forebearers, we cannot sweep the problems
under the rug or apply a band-aid. There's no room left under the rug
and the band-aid box is empty.

The question of what to do with massive entitlement programs like the
Social Security Administration (SSA), medicare and medicaid have to be
answered. For years these programs have run on auto-pilot while
Congress just paid the bill at the end of the year. Paying this bill
required Congress to borrow from social security and in return social
security received IOUs in the form of bonds. Now the SSA is calling in
those IOUs and federal treasury will have to borrow more foreign money
to pay them - more foreign money that will have to be paid back. In
short the SSA is broke, the treasury is broke, and the final chapter
that eventually must be realized for every ponzi scheme is coming to
pass. There is no more money to shuffle around. Tax revenues cannot
come close to covering government's glutinous promises and a solution
that deals with the long term and short term must be discussed. I'd
also like to point out that Obama and the democrats are talking about
immigration overhaul. Amnesty's affects on our entitlement system will
create an entire new population overnight and the financial burden
will continue to soar and spiral out of control.

Long term - Social Security was designed as a temporary program and it
is time to end it. Medicare and Medicaid were billed as small programs
that would not burden the government, but that has turned out to be
false. These programs need to be overhauled, if not outright ended.
What's happening with the SSA is a taste of what's to come under
government run health care if Obama and the Democrats decide to ram
this legislation through. Our country is long overdue for a serious
discussion on entitlement reform. But a real entitlement reform debate
will never happen as long as politicians descend into emotive
argumentation rolling out every hard case they can find as a reason
for continuing the life of failed and failing programs. Entitlements
need to be means tested. Not every senior needs Medicare or a Social
Security check. Not every 20 something worker should have to face the
prospect of having a ridiculous amount of their pay check impounded by
the Federal Government for their next 30-40 working years and have no
say in where that money goes. Congress, by virtue of recent approval
polls and the current financial state of America, has proven that they
are not competent to manage our money, our lives, and certainly
nothing as important as health care.

Short term - This is a sticky subject and someone's feelings are going
to get hurt, but the nation cannot continue on this path and expect to
keep going. Seniors who are getting their checks now remain getting
them. People close to retirements (5 years or less) will get their
checks, and after that it's time to start phasing out enrollment on
Medicare and social security. Let the private sector help remove the
burden by allowing those people who can afford to buy insurance do so.
Entitlements need to be means tested in order to keep from sinking the
system. It's time to stop painting the private sector as the bad guy.
The private sector is where we find innovation and solutions.
Government solutions are generally confided to more taxation, more
regulatory fees, and less freedom, both financially and personally.
America has the best medical care in the world hands down. If the
government would partner with the private sector instead of scape-
goating them, I believe we could find a solution to health related
issues and reduce blank check entitlements that are driving us over
the edge.

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