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Senior Advisor

The welfare state day of reckoning

 

 

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We Americans fool ourselves if we ignore the parallels between Europe’s problems and our own. It’s reassuring to think them separate, and the fixation on the euro — Europe’s common currency — buttresses that mind-set. But Europe’s turmoil is more than a currency crisis and was inevitable, in some form, even if the euro had never been created. It’s ultimately a crisis of the welfare state, which has grown too large to be easily supported economically. People can’t live with it — and can’t live without it. The American predicament is little different.

 

The numbers — to those who don’t know them — are astonishing. In 1870, all government spending was 7.3 percent of national income in the United States, 9.4 percent in Britain, 10 percent in Germany and 12.6 percent in France. By 2007, the figures were 36.6 percent for the United States, 44.6 percent for Britain, 43.9 percent for Germany and 52.6 percent for France. Military costs once dominated budgets; now, social spending does.

 

The modern welfare state has reached a historic reckoning. As a political institution, it hasn’t adapted to change. Politics and economics are at loggerheads. Vast populations in Europe and America expect promised benefits and, understandably, resent any hint that they will be cut. Elected politicians respond accordingly. But the resulting inertia poses an economic threat, one already realized in Europe. As deficits or taxes rise, the risk is that economic instability will increase, growth will decline, or both. Paying promised benefits becomes harder. Or austerity becomes unavoidable.

 

http://www.washingtonpost.com/opinions/the-welfare-states-reckoning/2011/12/02/gIQAI1xrTO_story.html...

13 Replies
Highlighted
Veteran Advisor

Re: The welfare state day of reckoning

As it should be.  We should be helping people rather than killing them.

Highlighted
Senior Advisor

Re: The welfare state day of reckoning

We are helping people by giving them money yet to be earned by children yet to be born. The government can help no one without first hurting some one else.

Highlighted
Veteran Advisor

Re: The welfare state day of reckoning

I notice that your attitude is that the "we" should be "the federal goverrnment" rather than simply doing what YOU can for others. In other words, other people should be helping.

 

THis seems to be the same old tired litany of liberals....some abstract federal bureaucracy should be doing something, rather than individuals.

 

And you also seem to complain that your benefits are not enough, even though you seem to travel extensively, and live very well.

 

Do you see some disconnect here?

Highlighted
Advisor

Re: The welfare state day of reckoning

And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers. ~ Thomas Jefferson, excerpt from his letter to Samuel Kercheval, July 12, 1816
Highlighted
Veteran Advisor

Re: The welfare state day of reckoning

Yup, lots of people wanting to do great things, on someone else's dime.

 

Locally, we have that problem as well.  A committee of people in town wanted a new school, a new hospital, and a new fire hall.  Couldn't get it done until ag land prices went up & up.  This almost doubled the amount of tax money coming in, per Mill of levy (in property tax).  Since houses didn't go up, they got enough people in town convinced they could have all of this, without paying any more in taxes, that the farmers would pay it.  Since the town people outnumbered the farmers something close to 4-1, it passed (although barely).  Now that housing values have risen a bit from the lows, the people in town are screaming about taxes going up, and so of all things, the great spenders of town are cutting the budget by eliminating the city police force, instead joining it with the county Sherriff, and paying for only 1 new deputy, instead of 3 city patrolmen.  The joke will be on them, if farm prices tumble within the next 20 years (the length of the bonds to pay for all this) and people within the town suddenly will have large bills to pay.

Highlighted
Veteran Advisor

Re: The welfare state day of reckoning

Once again you show your ignorance of the nuances of English.  Armies are made to kill people.  Big defense budgets mean larger and better armies and that means ease of destruction and death when called upon.  Wouldn't it be better to spend more on helping people rather than killing them.  You can have a good defense program to defend your country but more "nation building"  is not needed.  Don't you wish your compensation was larger?  It doesn't make any difference if I wish it was bigger.  I know it isn't and I live with it.  If I need to supplement it, I do some work.  Where do you get the idea that I travel extensively.   We make about 3-4 trips a year usually about 7-10 days total.  We go to Denver each Jan for 3-4 days for the Stock Show, go somewhere during the summer for about the same amount of time and maybe every now and then take a weekend off some place and if I am really lucky I might get a trip for a few days back to Illinois.  Two of those trips are strictly business for the cattle association and the other two might be considered pleasure.

Highlighted
Senior Advisor

Re: The welfare state day of reckoning

That tiresome rant is because you don't want to pay for what the public wants. You say nothing about our people being expected to spend more on our military that all other nations combined. A large percentag of social spending is paid by specif taxes for those purposes. There is a 2.6 trillion surplus in the SS trust fund and you have been borrowing it to fund your wars of choice, not necessity. Now you want to punish seniors because they may want you to pay it back.

 

It you want to help america, quit trying to avoid taxes.

Highlighted
Veteran Advisor

Re: The welfare state day of reckoning


@kraft-t wrote:

 

It you want to help america, quit trying to avoid taxes.


 

I think everyone pretty much AVIODS taxes, they just shouldn't EVADE taxes.  Why else would people put land into some sort of tax-free entity, or defer income into the next year, other than to avoid the tax bill.

 

Yes, it is perfectly legal, and yes, everyone does it, but that doesn't make it not tax avoidance.

 

Highlighted
Advisor

Re: The welfare state day of reckoning

http://www.bloomberg.com/news/2011-12-05/payroll-tax-cuts-seen-by-some-obama-allies-as-undermining-s...

 

.....Chuck Blahous, a former Bush administration economic adviser who now sits on Social Security’s Board of Trustees, called the Obama plan a “very fundamental transformation” in how the program operates.

“When you start funding Social Security that way, you basically destroy any notion that people really paid for their Social Security benefits,” he said. “We’ve got this political dynamic that says, ‘Well, if you don’t extend this, then you’re in favor of raising taxes on poor working people. If that’s the dynamic, then Social Security is in really severe trouble.”

Advocacy Groups Split

The ambivalence over tapping into the funding for the popular retirement program is underscored by a split among advocacy organizations for the elderly: AARP, the largest group, supports the payroll tax cuts -- as long as they are temporary - - while the National Commission to Preserve Social Security & Medicare has criticized the administration’s plan.

Alan Krueger, the chairman of the White House Council of Economic Advisers, denies there’s any danger to the system. He told reporters in a Nov. 29 briefing, “I don’t think this jeopardizes the Social Security trust fund or the solvency of Social Security -- the trust fund is made whole by general revenues.” And he said Obama has proposed a way to fully pay for his tax-cut plan.

Senator **bleep** Durbin, the chamber’s second-ranking Democrat, also rejected the complaints. He said the government has been borrowing surplus Social Security revenue to pay for other programs, and promising to repay it later with other tax revenue, so the money has already been mixed.

“This is not the first time,” he said. Durbin said he hoped the tax cut would be allowed to lapse next year though he said he couldn’t rule out another extension.

It’s that uncertainty that concerns some lawmakers.

“We shouldn’t let the federal government undermine Social Security by convincing Americans that they don’t really have to pay for it,” said Senator Joe Manchin, a West Virginia Democrat. “If we extend the cuts this year, what about the next year and the year after? When does it stop?”