Dear Friends,
It seems to me that the US government must get it’s spending under control or else the spending will get the government under control. US government debt is projected to grow so fast it will outstrip the ability of the economy to pay for it in under ten years. (If the bond market holds out that long). No matter if all discretionary spending is eliminated. The pending economic disaster, which is clear for anyone looking, is due entirely to Social Security, Medicare and Medicaid. These three entitlement programs will go down in history as a warning to any other nation that would be so foolish as to implement them.
That is not to say that US government doesn’t throw gobs and gobs of hard earned taxpayer money away. Aid to China is one example. The US government giving foreign aid to China is like you getting a loan from your bank and then giving money to the bank to help them ‘make ends meet‘. While you are in debt to them an entire years salary. But the real problem is entitlements.
No matter if these entitlements are addressed or not they will not exist in a few years. Once they outstrip the economies ability to pay for them the economy will either collapse or the entitlements will collapse. When that happens the people thrown out of the entitlements, no matter which scenario plays out, will be destitute. They will suffer all the more for our lawmakers lack of grit.
Members of Congress in the US are just like children who have a term paper due. They play video games and “debate” what they will write about. Procrastinating until the paper is over due and complaining they didn’t have enough time. Then acting the exact same way on the next assignment.
There is a reason entitlements are the third rail of politics; if anyone has the grit to come close to touching it, the masses of dependents rise up and swarm like wasps. The buzzing keeps anyone sane away. But touch it, not only they must, but to wrestle with it is requisite.
Place another system under the old so that people will actually have a “safety net.” That safety net would be some form of Capitalist social security.
This would be a system where people could invest money into the system. Their money would be pooled and invested in dividend stocks and AA or better bonds. The fund would grow until the participant reached an agreed age. Then the plan would pay out fifty percent of each year’s gain, on the participant’s portion, to the participant. The other fifty percent would be reinvested. When the participate dies, his or her portion of the fund goes to their heirs, apparent or cited, and so on and so on…
This fund would grow generation after generation and there could be several funds to ensure competition. If our wise lawgivers could be asked to keep the interest of the fund(s) itself untaxed, and protect the fund(s) with legislation, from seizure by lawsuits, the fund would not only help the working man immensely, in many ways too numerous to go into here, but would provide a steadying hand for the various exchanges and economies around the world.
As people are moved into the new capitalist system their well being will be more safely entrusted and the well being of their children will be protected as well. But Social Security is the smallest of the big three. The entitlements, Medicare and Medicaid, are bigger and more intractable.
The answer to these problems is to, regulate health care insurance federally, deregulate the options and standardization of the insurance industries paperwork. There are many other ways within that government can strongly impact the growth rate of healthcare costs. Simply slowing the rate of growth would stave off economic disaster, from these two entitlements, for awhile. This was the underlying thrust of Obama care. To grapple with these two entitlements like a sniper. Without seeming to. But his way would have drowned us all the quicker.
Getting government spending under control would drastically help the economy, but it is not the only thing government does, that effects the economy and the natural rate of unemployment. Regulation and the aggregate cost of legal representation, to start and operate a firm, are other examples. Tackling these could help the job market quicker and more effectively in the short term than spending reform. But spending reform must be done; else it will do itself…
