Tag Archives: social security reform

Midterm Election Results – Who are the Real Winners and Losers?

I, Grandpa T, am taking full credit for the Republican victories in the November 4th midterm elections!

OK, I did not have anything to do with it.  But if Al Gore can claim inventing the internet, Barrack Obama can claim you could keep your old health insurance policies and George H.W. Bush can claim “no new taxes,”  I should be able to get at least a little credit for this election.

There are no shortage of articles being published or ‘talking heads’ on TV giving their assessments of what went right and what went wrong for both parties.

This article is about an outsider’s opinion as to who are the winners and losers.

Winner – Republicans

If you are going by sheer numbers alone, the Republicans had a great election.  There were 51 new Republican candidate winners and 17 new Democratic candidate winners.  This would be considered a rout if it were a football score:  51-17.

I view this impressive victory as being similar to an oreo cookie.  The top layer represents the existing 113th Congress.  This Congress, the Congress with the lowest approval rating since ratings were initiated in 1974, still has until January 3, 2015 to reign mayhem upon the public.   There are already rumors about ‘ramrodding’ some Democratic nominations while the opportunity still presents itself.  The POTUS, with the prospect of a Republican-controlled Congress after the first of the year, has publicly stated he will initiate immigration reform using the Executive Action excuse.  No doubt this will be done to make that new Congress look mean and evil for not wanting to grant amnesty to about two million illegal aliens.   As of this writing, the Washington ‘three ring circus’ will still be functioning for about another eight weeks.

The middle layer of the oreo cookie is the impressive number of Republican victories.  The Republicans gained thirteen seats in the House of Representatives and won enough senatorial seats to take control of the Senate.  The greatest achievement from gaining control of the senate?  Getting rid of Harry Reid as the House Majority leader!  Harry Reid – the person who has single handedly stonewalled democracy by using his status as the ‘gatekeeper to hell.’  Nothing was presented to our US Senate for either debate or vote, unless Harry allowed it.  (A reported 382 bills, passed by the House of Representatives, are allegedly sitting on his desk!  He will not bring them to the Senate floor for consideration!)  He said in 2008 that while he was Senate Majority leader, no US budget would be discussed, approved, or voted on.  He is a man of his word.  Not one budget has been approved for the largest economy in the world for all of Obama’s term of presidency because of Harry.  I was hoping he would lose his position as senate minority leader.  But Harry, ever diligent, always thirsting power, has decided he wants to continue as Senate Minority Leader, no doubt hoping for a comeback in 2016.  If you want a person to point a finger at for the fact that the 113th Congress has been ineffective, Harry would be a damn good target.

The bottom layer of my oreo cookie is that we are now an ‘instantaneous’ society.  Everything has to be quick (ie texting, email, microwave ovens, Instagram) and the results have to be quick.  By the way, Grandpa T has no idea what Instagram is, but the very name implies instant!  We have become a society that does not allow any grass to grow under our feet.  We won’t wait that long.  So, we will now expect the new Congress, that Congress we just voted into Washington, to provide us with instantaneous results in exchange for our votes.  There is only one major flaw with these expectations for the new 114th Congress.  They all get sworn in, find their offices, get their pens and pencils in the right slots in the right drawers, hire their staffs, find housing, get their kids in school, meet their peers, and then get to work.  How long do you think it takes to get acclimated as a newbie in Washington, D.C.?  Lets say, for the purposes of argument, that it will take six months to become fully acclimated.  Reasonable?  So now that they are all bright-eyed, bushy-tailed and ready to legislate everything that is good and honorable for the good of the old United States of America, what happens next?  WE BEGIN ANOTHER ELECTION CYCLE!  Unlike Great Britain, which allows only 6 weeks for election campaigning (how heavenly would that be?!), our 2016 election year will begin early – especially since it is a presidential election year.  This campaigning will be long, expensive and distracting.  My point to all of this?  How much can we really expect these people to accomplish in the midst of the upcoming election campaigns?  The onus will be on the Republicans to perform regardless.  Thus the bottom layer of the oreo cookie.

Loser – Democrats

We are all familiar with the numbers and the results.  What we don’t take into consideration is that a promising younger generation of democrats got defeated and may never run for office again.  The downside to all of this?  We are stuck with the old democrats:  Hilary Clinton, Harry Reid, Nancy Pelosi…..the list can go on and on.  I can remember when the accusations were that the Republicans were a bunch of fat-cat, cigar smoking, greedy rich guys.  Now that mantra is more befitting for the reigning democrats than for the republicans.

Winner – United States of America

Here are some of the demographics concerning the 68 new members of Congress.  Twelve have had prior military experience, nine Republicans and three Democrats.  (This is a far cry from the 70s when 80% of all Congressmen had prior military service!)  Thirteen of the newly elected Congress members are women, representing 20% of those elected.  Four of the newly elected are black women, three of whom are Democrats and one is a Republican.  Forty-one percent of all those new Congressmen are under the age of 50.

But here is what impresses me.  I am totally impressed by the character and demeanor of some of these incoming Congressmen.  I have heard the following three winners speak on TV, without teleprompter, and I have to say I am very enthusiastic about each of them.

The first person is Joni Ernst who was elected as the first female federal representative from Iowa.  What a woman!  She is a combat veteran having served 14 months in Kuwait.  She is currently a LTC in the Iowa National Guard.  What people do not know, as the media did not cover this, is that LTC Ernst was in uniform two days after winning the election, as she had to make up drill days lost during the campaign.  She believes in and supports a balanced budget amendment, free-market health care, gun rights, partial privatization of Social Security accounts and protection of accounts for seniors.  She opposes both cap and trade and a federal minimum wage.  It’s almost like she reads my blog!  She is educated, personable and very articulate.  If she sold stock in herself, I would be an investor!  I predict she will be a political ‘bright star’ in the future.

Another person that I have been extremely impressed by is Mia Love, the representative elect from Utah’s 4th congressional district.  She is a black woman of Haitian descent.  Interestingly, she was raised a Catholic but converted to the Mormon religion.  Her political beliefs are for fiscal discipline, limited government, personal responsibility, domestic energy exploration, gun rights, and is pro-life.  My infatuation with Ms. Love began when some ignorant reporter asked her if she got elected because ‘she was black.’  Her response?   “I did not get elected because I was black.  I got elected because I represent the values of the people of the State of Utah.”  Kapow!  Another ignorant reporter that got cut off at the knees.  Ms. Love is also educated and articulate.  I predict a ‘bright star’ in her future as well.

Tim Scott won his first term as the Republican senator for the State of South Carolina after being appointed in 2013 by the Governor to fill the vacated seat of Jim DeMint.  Did I mention that Tim Scott is a black man?  Mr. Scott previously served as US Representative for the first congressional district.  This made him the first black representative from South Carolina since 1897!  Senator Scott supports a balanced budget amendment, repeal of the Affordable Health Care Act, and an immigration policy similar to that of the State of Arizona.  He, like the two others that impressed me, is both educated and articulate.  If you hear him speak, you can’t help but be dazzled.

I believe that both Love and Scott are going to be political nightmares for the Democratic party.  Why?  Because they, as well as some of the other newly elected black Congressmen, present a far better, more promising role model for black society than the old gang of Jesse Jackson, Al Sharpton and Maxine Waters.  With the Democrats continually using ‘class warfare,’ ‘rich versus poor’,  and other discriminating rhetoric to pander their ‘us versus them’ mantra, the last thing the Democrats want to see is successful, articulate, conservative minorities!

I am optimistic, that with the elections of Love and Scott, America may have grown up and decided that they will not vote for someone just because of the color of their skin.

Martin Luther King said it best: “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”

Senator Scott and Ms. Love have both aced the character test.  America Wins!

Mudslinging and Misinformation – An American Political Art Form

Have you noticed the direction that political ads have taken?

Recently, Grandma P and I visited our former home state to attend a wedding.  In that state, the political races are a little closer than in our current home state.  The political ads ran 24/7!

The mudslinging!  The accusations!  The character “assassinations!’   Those were just the political commercials running on Cartoon Network!  Holy Crap!  If even 25% of the accusations are  true, all of these candidates should be in prison, not in Washington, D.C.  (Now that is a unique concept!)

I hate election season.  It wrecks my television viewing!  I miss my commercials for expensive cars, body lotions, perfumes, and soda drinks.  They don’t stand a chance against the venomous, biased ads run by political candidates.

What really gores my bull is the misinformation spewed during these commercials.

If you have read any of my blogs, you know that they have a conservative tone.  What really, really upsets me about most of the liberal candidate advertising is the continuation of the ‘class warfare’ element.  Being ‘rich’ is being pandered as being synonymous with being a ‘crook.’  It is being used as a 4 letter word by the Democratic party.  The inference is that if someone is ‘rich,’ those evil people got there by nefarious means, and no doubt on the backs of the poor!  Those ‘rich’ people obviously achieved everything they have by using the backs of the poor as their stepping stones to success.  (Interestingly enough, the Democratic candidates in our former home state are out-spending the Republicans approximately 3:2.  Apparently there is a lot of money available to ‘buy’ votes.)

As stupid as that last paragraph sounds, it is the underlying tone of much of the liberal advertising.  Never mind hard work, getting an education or taking chances in the business world – it is all for naught, because the government will take care of you.  You can have what those ‘rich’ scoundrels have without the effort.  You are entitled to what they have!  Why work for it?

The reason I find this upsetting is that this attitude contradicts the spirit in which this country was founded.  Independence – to do or achieve what you want without government intervention.  Freedom – to be all you can be.  Responsibility – to yourself and to your family to ensure the continuance of freedom and independence.  The liberal agenda seems to be to cast aside these founding principles and, instead, adopt the assurance that you can feed at the bountiful udder of the government teat.  That cow will eventually go dry!

Here are some examples of specific claims I saw in some of these advertisements.

“Candidate X wants to privatize social security.”  This was presented by a 30-something as if the world would end if Candidate X got reelected.  Have you polled anyone under 40 lately about the likelihood of them receiving social security?  I have.  I can assure you that everyone that I have talked to about this does not believe social security will be available once they reach retirement age.  The smart ones are preparing for that eventuality by saving and contributing into their retirement accounts.  Wow!  What a novel idea!  These people are taking responsibility for preparing for their own future retirement.  According to the liberals, these people need to be eradicated, or at least reprogrammed.  Of course, the liberals also like to scare the bejesus out of the elderly by convincing them that social security could be taken away tomorrow.  This will not happen.  That 30 something that was castigating candidate X should have been jumping up and down for joy, as should all the younger members of our society.  Privatization would mean that you could keep all your money and invest it as you see fit!  Again – individual responsibility.  It takes discipline to save.   Yes, it could be taxed to fund the existing social security system until its termination.  But, I believe, most of the younger generation would accept that as a tradeoff.

Why won’t it happen?  Privatizing social security takes the money out of the hands of the people that covet it most – the government of the United States.  Yup, ever since the Johnson administration and the burdening cost of the Viet Nam war, all presidents have used social security funds to balance the federal budget.  This worked well when there were 20 workers for every retiree. We are now down to 3 workers per retiree with the skids greased to get to two workers per retiree.  What started out as a supplemental income became a permanent retirement plan, with most people convinced to not save because ‘Uncle Sam’ will take care of them.  It has become a Ponzi scheme that cannot be funded permanently.  So what do you think of candidate X now?

Here was another observed advertisement.  “Candidate Y accepted campaign monies from companies that outsource American jobs to foreign companies.”  On the surface, this would sound like another nefarious act on the part of Candidate Y.  Let’s string the unpatriotic bastard from the highest tree, just like they did to cattle rustlers in the old west!  But wait just a darn minute, buckaroo!  Before I slap my trusty steed, Old Blueballs on the butt and leave Candidate Y swinging in the breeze, let’s think about this for a second.  If you were to check the labels on the clothing you are now wearing, how much clothing would you be wearing if you only wore ‘American made’ clothing?  If you were to rid yourself of all computers and televisions in your home that are not  American made, how many would you have?  Here is my wild guess as to the answers to the two previous questions: You would be standing nude, looking at a blank wall!  Most of our goods are foreign made.  In the 80s, I bought a new Cadillac.  You can imagine my surprise when I found out it was assembled in Canada!  I was further surprised to learn that half the nuts and bolts on that car were ‘American’ sizes and half were metric.  I found that out when I had it serviced.  Most large American manufacturers have a foreign facility.  We are dependent on these foreign goods.  It is safe to say that  practically every candidate that accepts campaign funds from a large company is also accepting funds from a company that has outsourced labor to a foreign country.  Of course, we could always lower our world high corporate tax rate from 40% down to the world average 22%, but that would mean reducing federal spending.  This has been done previously, and it resulted in increased tax revenue because of the higher revenues received from a lower unemployment rate.  It stimulated the economy.   That would be a smart move on the part of Congress, so don’t expect to see it anytime soon.

The most venomous ad I observed went like this; “Candidate Z supports tax cuts for millionaires!”  There we go again.  Go get Old Blueballs out of the stable,  because we got another galoot to hang from a tall oak tree!  Those darn millionaires got there on the backs of the poor and they are not paying their fair share of taxes!  Get the rope!  Maybe we should delay that execution for just a moment.  In 2010, the top ten percent wage earners paid over 70% of the total amount collected in federal income taxes.  The remaining 90% bore just under 30% of the tax burden.  Forty-seven percent of all Americans paid hardly anything at all – a fact that got Republican presidential candidate Mitt Romney into political hot water during the  2012 political campaign.  In 1986, the top ten percent wage earners paid 55% of the total federal taxes.  In 1986 there were just two tax rates – 15% and 28%.  (Ahhhh, the good old days!)  Now there are seven income tax brackets, ranging from 10% to nearly 40%. (So much for simplifying the tax codes!)   Now someone needs to educate me as to how the top ten percent wage earners, those people paying over 70% of the federal government taxes, are not paying their fair share?  Their tax burden has gone up 12% since 1986!  Maybe Candidate Z deserves not to be hanged today.  He probably understands that if we decrease government spending, maybe those darn millionaires do deserve a tax break, getting us back to the tax rates of the ‘good old days.’

Of course, no election campaign would be complete without referencing Obamacare.  I am against this plan simply because it was forced onto the American public by a Democratically controlled Congress that had not read the act or put any forethought into its administration.  It was a hair-brained Democrat scheme to purchase votes, once again trying to get the masses onto the seemingly endless government teat.  So far, Obamacare has appeared to do more harm than good.  Its overall administration has been a disaster.  It proves once again that private enterprise, not the federal government, is more efficient at administering large scale programs.

So there you have it.  Our upcoming midterm election – that time of year when television revenues are going through the roof because of political advertising, and ad agencies sink to an abyss of lost ethics by making their candidates’ opponents look like political derelicts and crooks.

What don’t we see in any of these ads?  Spending cuts.  Established sunsets on all welfare benefits.  Term limits.  Drug testing for present and future welfare recipients.  Corporate tax reductions.  Income tax reductions.  A flat income tax.   Social security/retirement revision.  Somehow, none of these very important items makes the final cut in any of these ads.

I can’t wait until the elections are over so I can get back to my favorite ads.

Go vote!  Or as the Bayou Mauler, editor at large, would say, “Geaux vote!”

“One of the penalties for refusing to participate in politics, is that you end up being governed by your inferiors.”  Plato

A Political Decision Primer & Social Security

Listen up, people!  Grandpa T is going to give his insight into political decision-making.  It is all quite understandable with just 5 basic principles:

1 – Politicians are more concerned with reelection than with doing what is right.

2 – Money is power.  It becomes very important  to those seeking reelection.

3 – Government agencies are poor managers.

4 – The media does not always present reality.  Choose your media sources wisely, and use common sense when separating fact from fiction (ie. what does not pass the “smell” test).

5 – When in doubt, refer to Principle 1.

We have all been first-hand witnesses to the gridlock that is taking place in Washington, D.C.  Sequestration has become the word of the year, as it supposedly went into effect on March 1, 2013.   In political terms, our country was facing a fate worse than death because $90 billion was going to be cut from the budget.  Panic, pandemonium, unemployment, starvation and other plagues that have not occurred since biblical times were going to befall us, all because of these spending cuts.  And that was just what the President was saying!

Let me put this into perspective.  Suppose you go to McDonald’s and spend $9.80 on fast food.  It fills two bags, so you have your hands full.  You give the clerk $10.00 and receive 20 cents in change.  As you are walking to your car, the two dimes falls out of your pocket.  You see them roll on the ground under your car, but it is only two dimes.  Rather than bending down and getting the money, you get into your car and drive happily away with your Big Mac in hand.  That 20 cents represents a larger percentage of  the $10.00 than the $90 billion is to what the government spends. Okay, my math is a little skewed, but you get the point.   The true controversy of sequestration is where the cuts are being made.  Rather than slashing social welfare programs, about half the money will come from the defense budget.

The real issue at hand is the fact that the federal government will run out of money again on, or about, March 27, 2013.  For the umpteenth time, we are hitting the debt ceiling.  Will any true spending cuts be made?  We will know shortly.

Now, let’s discuss Social Security.   My Five Principles for political decision-making come into play concerning this subject.

I want to make one thing perfectly clear!  Contrary to what politicians say (only to get reelected – Principle 1), and what the media panders (Principle 4), people currently on Social Security are not going to lose Social Security.   That does not mean that we are secure from a cut in benefit, but we will not lose Social Security.

Social Security refers to the Old Age, Survivors, and Disability Insurance (OASDI) federal program.  The original Social Security Act was instituted in 1935.  Social Security is primarily funded through payroll taxes called Federal Insurance Contributions Act tax (FICA).

Because of the Great Depression of the 1930s, it was determined that over 50% of the senior citizens lived in poverty.  The Act was an attempt to limit what were seen as dangers in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children.

Opponents at the time decried the proposal, declaring it socialism.  In a Senate Finance Committee hearing, one senator asked Secretary of Labor Frances Perkins, “Isn’t this socialism?”  She said that it was not, but he continued, “Isn’t this a teeny-weeny bit of socialism?”

In 1937, there were 53,236 Social Security beneficiaries at a total cost of $1,278,000.  In 2008, there were 50,898,244 beneficiaries with a cost of $615.3 billion.  How times have changed!

But like all government programs, good intentions paved the road to hell.  Times have changed in other ways.  In 1937 the retirement age was 65.  Today, if you are  born after 1960, the retirement age is 67.  So far, so good.  But the average life expectancies in 1935 were 59.9 years for men, and 63.9 years for women.  In 2010, the average life expectancy for a man was 76.2, and for women 81.1.  Demographics indicate that a 65 year old person living today has a 1 in 4 probability of living to age 90.  A baby born today has a 50% chance of living to age 100!  Are you beginning to see the problem?

The Social Security System has been equated to a Ponzi scheme.  The vast majority of the money you pay in Social Security taxes is not invested in anything.  Instead, the money you pay into the system is used to pay benefits to those “early investors” who are retired today.  When you retire you will have to rely on the next generation of workers behind you to pay the taxes that will finance your benefits.

As with Ponzi’s scheme, this turns out to be a very good deal for those who got in early.  The very first Social Security recipient, Ida Mae Fuller of Vermont, paid just $44 in Social Security taxes, but the long-lived Mrs. Fuller collected $20,993 in benefits.  Such high returns were possible because there were many workers paying into the system and only a few retirees taking benefits out of it.  In 1950, there were 16 workers supporting every retiree.  Today, there are just over three workers.  By 2030, it is projected we will be down to two workers.

As with Ponzi’s scheme, when the number of new contributors dries up, it will become impossible to continue to pay the promised benefits.  Those early windfall returns are long gone.  When today’s young workers retire, they will receive returns far below what private investments could provide.

In retrospect, it took a Depression, a Great Depression to cause the implementation of the program.  No such depression has been experienced since.  Additionally, the baby boomers provided the ultimate acceleration of this program.  Firstly, this was due to their big influx into the workforce, providing a record breaking number of contributors, and now, because they are retiring.  And during the Vietnam War, when LBJ was the President, Social Security contributions were used for the first time to balance the budget and cover the war expenses.  Every President has done it since then.

So now what do we do?  Here would be Grandpa T’s Common Sense Solution.

First, we need to get the federal government phased out of the Social Security business.  We do this by establishing an age, possibly 45 or 50, where everyone above that age will be on Social Security, and the people younger are not.  It may take 50 years to totally phase the program out of existence, but it would be worth it. (Principle 3)

Secondly, we need to allow people under the  age of 45 or 50 to have individual retirement accounts.  They could invest up to 25% of their income into investments of their choice, tax deferred.  They would still have to fund the existing program by paying a reduced amount of  FICA.  Today the employee and the employer both pay 6.2% to fund the program.  Perhaps this could be reduced to 4% each.  People investing their money judiciously could earn 4%-7% average per year.  Over the lifetime of a young worker, these returns would be huge compared to Social Security benefits.  The Social Security Fund investments have yielded less than 2% over the life of the program when there was money to invest.

I will guarantee you that young workers today would jump at this opportunity.  There are very few people under the age of 40 that believe Social Security will be available when they reach the retirement age.  They expect the program to go bust.   They may be right!  What happens when that generation takes the reins of Congress?  And the young workers do not want to foot the bill for today’s retirees.  As mentioned, they and the employer pay 6.2% each in FICA.  In 1935, this amount was 1% each.  In reality, no one complained when the boomers were in the workforce.  But today, there is no end to the complaints  that the boomers, a large glut of our former workforce, are now retiring (to the tune of 10,000 retirees a day).

Thirdly, we need to raise the age of Social Security beneficiaries.  It may be time to raise that age to 70.  Of course, a younger person who is not in the Social Security program can retire whenever they think they can afford to retire.

Lastly, the existing beneficiaries may just have to take a cut in benefits.  Yup, that includes Grandpa T.  To assure the continuation, rather than the total loss of benefits, we may all have to “bite the bullet” for a 5%-15% cut in benefits.

People currently receiving Social Security payments typically draw out more money within six years than they contributed overall.  This, combined with longer life expectancies and a declining workforce, has created a lingering debt that will eventually become an unmanageable burden. If anything will take away Social Security from current recipients, it may well be that unaffordable burden.

Will anything be done to save the system?  Will Washington contact Grandpa T for his ideas on restructuring the Social Security program?  Probably not—on both counts.  Why?  Because our gutless Liberal representatives in Washington will scream, with the help of the willing media (Principle 4), that the rotten, mean Conservatives are trying to take away their Social Security.  They will do this to retain votes (Principle 1) from the gray panthers to assure their support during election years.  Unfortunately, many of these retirees will believe this propaganda.

Additionally, government (Principle 3)  would be taking in less funds (Principle 2), and this would require the federal government to downsize.  There are very few egocrats in Washington that want smaller government.  Those measures would reduce the size of the kingdom.

Don’t misunderstand what I have said.  There are some forthright representatives from both parties that recognize that the program needs to be drastically revamped in order to survive.  Everything short of a public lynching has occured within the media against these people whenever the subject is even discussed.

Will anything close to my suggestions ever be implemented?  Unfortunately, no.  That would take many more smart, fiscally conservative representatives being elected by a less greedy electorate.