Perotcharts

I had my wife and son read those charts last night. I have looked at them all before, but never in a coordinated presentation like that before. In 2006 I convinced my wife we had to vote against Republicans to get Rumsfeld out so we could have a chance in Iraq. That put me on the path to questioning my long time reflexive Republican voting.

Looking at what happens to the debt with a Republican president in office is very disappointing. We cannot deficit spend forever. As you follow all those graphs out it becomes pretty apparent that it will take a combination approach to rectify this mess. Also, kind of interesting that if we do away with interest payments on our debt we can pretty much do away with corporate income taxes if we want.

Steve

I've been a 401k/IRA contributor since my early 20s, but I have another say, 30 or so years to go until I retire. What I worry about is that saving won't do any good either, because we'll have some calamity that will wipe us all out in the meantime. Paranoia? I mean, right now my retirement is a bunch of binary code at places like Vanguard and Fidelity.

I agree that the charts are an admirable attempt to bring facts to bear on public discourse.

If I had one criticism, it would be that charts showing dollar figures over time should be inflation- or GDP-adjusted. $100 billion in 1960s dollars is not the same as $100 billion on today's dollars. (In fact, there are some charts on the site that show governnment spending, tax collections, and surpluses/deficits as a % of GDP: in my view, that should be more the rule than the exception.)

I'm just below the age that can expect some level of Social Security to "be there" when I'm retired. For many years I didn't mind paying Social Security taxes when, after all, my own father (my mother didn't live long enough) was receiving Social Security. But I was constantly hearing people on Social Security in their 80's and 90's--who received vastly more than they paid in when the bulk of their contributions were in the range of 3% on the first $3000 a year--complain about health insurance for kids (CHIPS in Texas where I live) or bemoan the fact that couples with incomes over $32,000 might have to pay some income tax on their monthly checks. The ones they had never paid in for.

And now there is an entire generation paying in more and more and expecting nothing. Something has to give, and I believe it starts with older Americans, in whose number I soon will be. Why should we expect twenty-something's to pick up the tab for trips to Hawaii and our grandchildren's college education?

On the other hand, there are people who genuinely worked hard and lived sensibly who will have nothing for retirement. We shouldn't let them live in misery. But we should also reverse age-ism in government policy.

And, Anglican, the way I see matters is, at least I should be the steward of I what I earn, not someone in Palm Beach who can't even punch a butterfly ballot. I agree with you on that one.

I'm in my 20s and I assume nothing from Social Security when I calculate how much to save for retirment. While I'm not earning enough to be the target of tax increases yet, I think it's ridiculous to raise taxes on high-income young people to pay for SS checks for wealthy old people. The young people could lose their jobs next year and become not rich, but the wealthy retirees own land and financial assets.

But SS isn't even close to the problem of Medicare. There are no tax increases that can pay for it without crippling the economy or causing younger workers to mass protest. The charts you see are just fantasy.

This is the most frightening thing I've ever seen. I don't see how a collapse can be circumvented through our existing system of criminally irresponsible government. In the core of my being, I don't believe that the federal government will address this looming disaster. It will merely react (or not) one day when the sadly inevitable collapse happens, then our choices will be painfully limited.

Does anyone know what other developed nations are on this same course and which ones are not? Seriously, is it time for Americans who wish to ensure a better life for their children and grandchildren than these charts predict to emigrate while we still can? I never thought I would ask such a question.

What happened after the surplus in the year 2000?

Pssst. Let me let you in on a secret. It's so secret that only Perot and other members of the Trilateral Commission knew it until now....

Are you ready? Are you sitting down?

Ok...

There never was a true surplus in the 90s. It was all a smoke-and-mirrors accounting scam accomplished by arbitrarily deeming huge swathes of government spending to be "off-budget". The last time the United States Government actually took in more money than it spent was sometime in the Coolidge Administration.

Careful, K. Divulging TLC secrets (which originate, of course, in the Council on Foreign Relations) is a dangerous habit. A key component of the "surplus" was including the SS reserve in the budget math. Put that in your smoke and pipe it, gentle readers...

Other Jim, taxation needs no moral justification. It just needs to deliver money where it's wanted... and I grieve to confess that I have no serious answer to your valid criticism. :-(

As a former mule on the ERISA compliance trail, K Man, all I can say is: bull's eye. As I recall, the legislation that created the SS reserve deliberately lacked any restriction that prevented it being used in the general budget math.

Just one quibble: I'd call it Congressonomics. I have yet to see a president who exerted any taxation sanity control over our Congresscritters.

This is a social, cultural and demographic death spiral. The young today will have to pay for the old, and they will not afford to have many children and then these fewer children will in turn be burdened at least as much as their parents were to support the retirement of the previous generation.

Get the picture folks.

Some revolution is coming, ultimately. Let's hope it does not involve Soyant Green.

The Man From K Street
The point being that the implication from the charts (and of some comboxers here) that if we just returned to the oh-so-wise and responsible time of Clintonomics and renounced the evil Bush tax cuts, all could be sweetness and light once more, is yet another fantasy on top of the overall fantasy of USG budget accounting.

Pretending that the budget under Clinton wasn't more solvent than the budget under Bush is rather silly. Yes, the Clinton budget wasn't 100% balanced, because it borrowed from SS, but while we're talking about specifics, the interest on the pre-existing debt was enough to push it over the line, without that, it would have truly been a balanced budget.

I.e., if Reagan and Bush1 hadn't run up a debt, there would have been much less interest Clinton would have had to pay, and the Clinton budgets actually would have balanced without accounting tricks. If you want to get into the technical specifics of quibbling about the last hundred billion, that is.

Of course, paying off debts we owe other people with debts to ourselves is a fairly good idea anyway, cause we don't owe ourselves interest. We really should 'steal' as much from SS as we can now to pay off other debts, as long as we actually admit to ourselves that's what we're doing and that we have to pay it back.

But regardless of whether Clinton's budget was 100% balanced, a small deficit is much better than a large one, especially as the accounting trick you're talking about is still going on, so the Budget is much more imbalanced than we're pretending it is. (The Republicans, OTOH, like to pretend this is a problem with social security, because if we keep borrowing from it, it will run out of money much sooner. The solution to that is also inherent in the problem...require the general budget to pay back what it owes SS whenever SS needs it.)

SiliconValleySteve
Medicare is another story but not as much as you might believe. Here are the facts, seniors are in a government single-payer system. Just like other single-payer systems, when the budget outstrips the ability to pay for extraordinary services, they will be rationed.

I think most rationing of medical care right now is simply because the health care industry has been crippled because of the health insurance industry. It's not 'extraordinary services', it's pretty much everything that's rationed. Usage goes down, the amount of money coming through the insurance industry to the care industry goes down, the amount of money the health care industry must charge directly goes up so people use it less that way, it's a big spiral of death.

Getting rid of insurers would change the rationing from the erratic system now to an entirely price-based one, and changing it to single-payer would change it to a hopefully medical-need-based system.(Which is sorta what you're talking about with 'extraordinary services'.) Either way, there wouldn't be anything in the way of expanding the system until rationing was minimized.

The thing is; what is extraordinary now, over time will come down in price and become ordinary. Then it will fit within the economic boundaries of rationed care. Hopefully, we won't be so stupid that we disallow people to pay for care above-and-beyond, that which is available from the rationed system. If we follow that scenario, (which many single-payer contries like Canada do) the new treatments won't be developed and thus will never be available to anyone. Hence, the chain of innovation will be broken.

The price of medical care is, in this country, almost entirely unrelated from the cost of the medical care. Insurance has resulted in a near-total disconnect. I don't think any predictions about what would happen if that were changed are that useful.

SiliconValleySteve
The biggest problem with your analysis is that you use static accounting that imagines that the anemic economy of the stag-flation 70's would have grown in the 80's and 90's at the same rate that it did without the reduction in taxes and regulation. I don't think so.

I actually agree to some extent. (Although it would have been a good idea to reduce military spending near the end of that, but that would have required psychically predicting the collapse of the USSR.)

I was just taking issue with the silly 'not really a balanced budget' quibbling about Clinton. We're talking about amounts averaging about 100 billion a year during those times, to somehow disprove the idea that Clinton's budget wasn't as good as people make it out to be.

This is just entirely silly. It was a much better budget than Bush, Mr. George 'Let's fly large sacks of money to Iraq and be unable to account for 12 billion dollars of it, while giving the rich tax cuts' Bush. And the 'sneaky' behavior Clinton did (Which actually happens automatically.) is matched by Bush doing the same thing, and then exceeded by him refusing to actually put the fricking war in the budget, and then by presenting a budget that's still 240 billion over.

Much truth in what Perot says.He would never be elected though; heaven forbid anyone try to end the party of soaring rhetoric and bullspit. And America has become a nation of fiscal idiots, many paying the minimimum monthly fees on growing credit card debt while financing what little equity they have at every opportunity.

Frankly, it seems which ever of the 2 parties is in control, government and it's spending grow and grow and grow unimpeded. And no one take hard baseline measure of what these agencies were intended to do and whether these programs really accomplish those goals. Further, no one conservatively takes a step back and ever bothers to ask if these are goals which the government should pursue at all in the first place.

Bob Barr in 2008. Yes, he will lose. But damn if I'm going to be held to account by my sons in the future for voting for more of the same financial stupidity that the 2 main choices will wreak upon the Treasury. President Obama can stave off our Chinese t-bill paymasters with change and hope. And he gives excellent speeches, so that will make evrything right and wonderful. Yeah, that will work.

Scott Burns calls it "fiscal child abuse." Check out his book "The Coming Generational Storm" written in conjunction with Laurence Kotlikoff in 2004. It will scare the hell out of you. But in the last chapter, they give solid tips on how to survive the coming meltdown.

He who has ears to hear . . .

Let's see, Bill Clinton put a stop on the raiding of the SS Fund and George Bush re-engaed us in the raiding of the fund for the "good of the Nation".

And whose to blame for the mess? The aging Americans? I don't think so.