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Discussion: (9 comments)

  1. there is a need to differentiate between earmarked entitlements and appropriated entitlements.

    earmarked entitlements do not come out of the discretionary general revenues budget.

    Social Security and Medicare Part A entitlements ARE going to grow as boomers start to retire. Changes will have to be made to the program to keep it on a self-sustaining basis but by law – it cannot pay out more in benefits than it takes in – in FICA taxes – unless Congress chooses to abandon that approach.

    Appropriated entitlements like Medicare Parts B,C,D are subsidized by tax dollars and ARE legitimately a big concern because the more people that retire and purchase B,C,D – the higher the subsidy that will be required.

    MedicAid is the other biggie but since it does not pay for seniors/retired – it will have a different trajectory.

    A GOOD CHART would show separate lines for earmarked entitlements and appropriated entitlements and separating within the appropriated entitlements – MediCare B,C,D from MedicAid.

    1. mesa econoguy

      Larry, that is the dumbest comment of the year.

      Congratulations.

      That is like distinguishing between the highly flammable kindling and the giant logs, both sure to catch fire…

      It does not matter whether an entitlement is “earmarked” or “guaranteed;” the fiscal appropriation process has set aside insufficient funds. Full stop.

      We cannot afford either source of entitlements, “earmarked” or otherwise. The math does not add up.

      And now that we have 4 more years of the worst statistical economic presidency since Jimmy Carter, we will have 1% growth, insufficient to sustain these “earmarked,” “pockmarked,” “trademarked” or any other “marked” program.

      The net present value of Socialist Security obligations exceeds the future obligations, which is the definition of insolvency and bankruptcy.

      1. mesa econoguy

        Edit: The NPV of obligations FAR exceeds future revenue, especially under zero Obamanomics growth.

      2. there is no “appropriation” for Social Security and there is no unfunded liabilities because by law it cannot pay out more than FICA revenues provide.

        …UNLIKE the entitlements that the Military is on the hook to provide….which are solely taxpayer financed through the appropriation process.

        In terms of the CURRENT budget and debt – what makes Social Security such a threat?

        why focus on social security RATHER than the issue that are direct and immediate threats to the budget right now?

        why the focus on SS? The military has almost twice as many retirees as active duty and every one of them has to receive entitlements. Where’s the angst for that entitlement?

  2. Larry: Are you sure you’re right about Social Security? I believe if the payroll taxes don’t cover current benefits, the Treasury will begin to “repay” money “borrowed” when the program was accumulating surpluses.
    Given that Treasury is now borrowing more than 30 cents on every dollar it spends, that means we will be borrowing from one credit account to pay off another.
    Please correct me if I’m wrong.
    Here’s one of my sources: http://www.thefiscaltimes.com/Columns/2010/08/24/Social-Security-in-2015-Red-Ink-Returns-for-Good.aspx#page1

    1. re” ” Larry: Are you sure you’re right about Social Security? I believe if the payroll taxes don’t cover current benefits, the Treasury will begin to “repay” money “borrowed” when the program was accumulating surpluses.”

      It will – until the trust fund is exhausted. After that benefits reduce.

      “Given that Treasury is now borrowing more than 30 cents on every dollar it spends, that means we will be borrowing from one credit account to pay off another.
      Please correct me if I’m wrong.”

      that’s correct.. but you cannot spend FICA money to keep from selling more treasury notes to cover the debt.

      all that would do (if you did do it) would push up the date when benefits, by law, had to reduce to match whatever FICA brought in.

      No elected official. Not One single one – of either party has ever uttered one word to do that.

      It WOULD literally take a act of Congress to take the trust fund – which is about 2.1 trillion and spend it but it would not even do any good to do that because all it would do is buy you 2.1 trillion of revenue and when that was gone – you’d be right back to deficit spending.

      you have to cut the spending that is actually causing the deficit (or increase taxes). Stealing the trust funds would only temporarily defer the deficit from spending.

  3. Entitlements are a critical part of economic security, but without change, investments will all but dry up, threatening our economy’s ability to grow and create opportunity in the 21st century“…

    Hmmm, kind of reminds one of a junkie on heroin but where’s the next fix going to come from?>

    If Every Food Stamp Recipient Voted For Obama, It Would Account For 75% Of His Total

  4. E. Goldstein

    You guys are arguing a moot point. The Us today is a welfare state on the path to becoming Greece and Spain style bankrupt. The question is will we do anything but accelerate the decline. The election says no.

    We are proving that once the people discover they can vote themselves bread and circuses they lose all desire to work.

    1. they can vote themselves bread and circuses

      Were you even alive in the LBJ era? Vietnam and Medicare and all that stuff.

      If you think that $4.21 per day for an EBT “food stamp” card for a single person is a disincentive to work, you are way out to lunch.

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