Motherly advice to Obama and Congress: Any job worth doing is worth doing right.

My mother used to say, “Any job worth doing is worth doing right.”  Unfortunately, it seems that federal government employees were not blessed with mothers that cared enough to instill responsibility in them.

Social Security is screwed up.  Medicare is screwed up.  Now, an entitlement program of Health Care Benefits is being discussed in Congress.  Why in the world would they think that they could run something bigger than Social Security and Medicare combined?  How in the world could any of us think that they could run anything, much less some kind of Health Care Program?

Remember, Social Security has a plan that is very simple to understand and follow.  Paychecks from every person that works in the US has a certain amount of money subtracted for Social Security and put into a special account that is only for Social Security, not accessible for general spending.  Money is only supposed to be taken out of the fund for Social Security payments.

The rules are very clear.  However, having that money sitting out there proved too much of a temptation for those in Congress.  Until now, there’s always been more money sitting into the Social Security account than had to be paid out in any single year.  What Congress has done is raid the Social Security “piggybank” to pay for other things, leaving a government IOU in the Social Security account.  For example, in 2008, there was a surplus of $73 billion in Social Security.  (This was the amount left after all payments were made.)  Now, there is an IOU for $73 billion sitting in the piggybank.

That was the good news about Social Security.  Now comes the bad news.  The Congressional Budget Office (CBO) always looks in its glass ball to project what will happen in the future.  When looking at Social Security, they have to make certain assumptions—the employment rate will be at x%, there will be y new jobs created, salaries will increase by z%, etc.  They guesstimate over the next ten years.  Just like weathermen, their predictions are less certain the further out that you get in time.

In March of 2008, the CBO assumed that the economy would be growing in 2009.  Under this and other inaccurate assumptions, they guessed that there would be an $80 Billion surplus in the Social Security “piggybank” at the end of 2009.  (This includes the $73 billion already sitting there in IOUs.)

In the meantime, the economy tanked.  Unemployment shot up.  Wages dropped.  In the current environment, a greater number of people threw up their hands and said, “I quit.  Why work any more when I can retire?”  Fewer people working, more people collecting, and lower salaries means that there is less going into Social Security.

With reality plugged into their equation, in March of 2009, the CBO adjusted their guess about the Social Security “piggybank” at the end of 2009.  They still assumed a growing economy later this year (fat chance).  Now, instead of thinking that there will be an $80 Billion surplus for this year, they assume that it will be a $16 Billion surplus for this year.  That is a huge drop in their estimate.  The reality of the spectacular change in our economy and our deficit spending has hit.  If things continue on with what is happening now, Social Security could be broke by next year.

Like the weatherman, the closer you get to the year, the better you can estimate.  For example, as recently as 2005 (when the economy was going well, despite the fact that the mainstream media was trying to convince you that things were gloomy) the CBO projected that there would be a surplus in Social Security until 2053.  “Not a crisis!” or “He’s a scaremonger!” many said, when Bush wanted to fix Social Security.  One such name caller was Greg Anrig.  In an online article for The Century Foundation entitled “Ten Myths about Social Security”  he notes, “Because the federal government is legally obligated to pay back interest and principal on those securities [IOUs], it would take an almost unimaginable calamity for a default to occur.”

I am so awed that today we can not only imagine such a calamity, we are on the verge of achieving one.  Collapse of the financial system, government bailouts, private industry takeovers, money printing, ballooning debt—all of those nasty things have made Mr. Anrig’s article seem pretty stupid (and that’s the polite way to say it).  If Mr. Anrig wrote the article today, he could title it, “Eight Truths and Two Personal Opinions about Social Security.”

Medicare is in an even more dismal state than Social Security.  Since 2004, there has been more going out in payments than has been collected from paychecks—there is a Medicare deficit.  Instead of having a “Medicare piggybank” to rob, Congress has to throw money into it.  Right now, 17% of the money spent out of the Federal Budget general fund is given to Medicare.

The rules were established that Social Security is in a separate account, and it is not to be accessible for general spending.  Congress simply did not follow the rules.   It also has some known flaws that guaranteed that it would go broke someday.  Medicare started running a deficit 39 years into the program.  Congress simply watched both happen.

Can we honestly expect Congress to be more responsible with a health care entitlement than they have been with these two programs?  Why in the world would we let Congress get involved with our health care industry to the extent that they want to?  Why would we let them handle another entitlement program like Social Security or Medicare when they have failed so abysmally at those?  Why would we let a government bureaucrat manage anything that our lives literally depend on?  I can’t figure these out.

I would like to give some motherly advice to the federal government:  Any job worth doing is worth doing right.  Do Social Security and Medicare right before you move on to health care.  Fix those things before we let you create another monster.  If you can figure it out, you may even learn something about how to do the next job right.

Published in: on July 9, 2009 at 12:33 am  Leave a Comment  
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