Obstacle to Deficit Cutting: A Nation on Entitlements

[Old Fart]

Efforts to tame America's ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.

At the same time, the fraction of American households not paying federal income taxes has also grown-to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

A little more than half don't earn enough to be taxed; the rest take so many credits and deductions they don't owe anything. Most still get hit with Medicare and Social Security payroll taxes, but 13% of all U.S. households pay neither federal income nor payroll taxes.

"We have a very large share of the American population that is getting checks from the government," says Keith Hennessey, an economic adviser to President George W. Bush and now a fellow at the conservative Hoover Institution, "and an increasingly smaller portion of the population that's paying for it."



For complete article:

http://online.wsj.com/article/SB10001424052748703791804575439732358241708.html?mod=googlenews_wsj

 

[sigsilly]

If you paid into Social Security and are old enough to receive it, I wouldn't call that an entitlement.
You are forced to pay into it and have the right to receive it if you meet the standards to draw it.
Take that into consideration and it substantially drops that "entitlement" number down.

 

[jeffsoward]

An aging population is adding to the ranks of Americans receiving government benefits, and will continue to do so as more of the large baby-boom generation, those born between 1946 and 1964, become eligible. Today, an estimated 47.4 million people are enrolled in Medicare, up 38% from 1990. By 2030, the number is projected to be 80.4 million.

Understandably, there is a disparity of what a worker paid in 30 years ago to the cost of living now and in the future. This is a major problem with Social Security and Medicare.
When it was formed, and subsequently reworked, the organizers were short-sighted and created a definitive ending (75years) for their models. Not only was the planning horizon too short, but the Greenspan commission used economic and demographic assumptions that were far too optimistic.
They screwed up, every time. The Greenspan Commission was supposed to solve the problem permanently, but they actually made it worse.
This is why SS and medicare are included in the "entitlement." Because more is going out than coming in.
I agree that it's not an entitlement, but my grandparents very small monthly SS check would be far below what it is if they were paid only what they paid in. This is the disparity.

 

[Hobbes]

Trillions of more dollars have been paid in than what has gone out of SS.

The gubment has been borrowing money from the SS fund and replacing that money with IOUs, bonds, to fund the annual budget deficit.
Now people wonder if the gubment will make good on those bonds.

SS isn't underfunded; It has been robbed.


for decades

 

[Old Fart]

For what it's worth...........I'm not expecting much from SS.

 

[DA 20]

What Hobbes said +1. If the money paid into SS had been placed in the stock market the worker would be drawing a larger check and when he passed on his family would still have the money. Thanks to the company I worked for I invested 5% of my salary in stock, after tax, for my wife as she was a stay at home mom. I have been retired 16 years now and her income from the stock is almost as much as my SS.

 

[buckeye]

As far as I know, Hobbes is right on the money.

 

[TerryMiller]

In addition, there are a lot of people drawing Social Security "disability" payments, something that I don't think was even thought of by the originators of Social Security. What I would like to know is how many of those drawing that "disability" have never paid in a dime?

I went to the SS office some time back and there were more people under 62 years old than there were 62 and over. AND, most of them were pretty well overweight.

Sorry for my rant, but I've been paying in for over 50 years.

 

[Rajder]

In addition, there are a lot of people drawing Social Security "disability" payments, something that I don't think was even thought of by the originators of Social Security. What I would like to know is how many of those drawing that "disability" have never paid in a dime?

I went to the SS office some time back and there were more people under 62 years old than there were 62 and over. AND, most of them were pretty well overweight.

Sorry for my rant, but I've been paying in for over 50 years.

Man don't even get me started on the disability payments. My mother in law helps get everyone she knows on SS Disability payments. The problem is that none of them are really disabled or what health problems they have were brought on by a lifetime of drug / alcohol abuse. So there are meth addicts with high blood pressure that are getting checks every month because they are "disabled" and too poor to afford their own medication. But the reason why they are poor and disabled (I use that term very loosely) is because they are Meth addicts. Man it just drives me up the wall!

In reality we need to fix the big problems first but it still really pisses me off!

 

[tntrex]

American households not paying federal income taxes has also grown—to an estimated 45% in 2010
For complete article:

http://online.wsj.com/article/SB10001424052748703791804575439732358241708.html?mod=googlenews_wsj

That right there is alarming.