Saturday, April 13, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, March 16, 2010
Heritage: Is Now Really the Time To Create a New $2.5 Trillion Entitlement?
By Heritage Foundation @ 3:37 PM :: 4372 Views :: National News, Ethics

www.Heritage.org Link to >>> comments

In theory, the federal government has $2.5 trillion stashed away in a nondescript office building in the sleepy little town of Parkersburg, West Virginia. That is where the Treasury Department keeps stacks of nonnegotiable Treasury bonds payable to the Social Security Administration. But as the Associated Press reported yesterday, for the first time since the 1980s, the federal government will not be adding to that stack. Thanks to an aging population and slow economy, Social Security will pay out $29 billion more this year than it takes in. And the Congressional Budget Office reports that after small surpluses in 2014 and 2015, the program is projected to be in the red from 2016 until forever.

But what about Al Gore’s Social Security “Lock Box?” Can’t we just spend that $2.5 trillion in the Social Security Trust Fund? As Heritage experts David John and Brian Reidl explain, since 1939 federal law has required Social Security to “invest” its extra money in Treasury bonds. Those bonds are really just IOUs from the government to the government. The feds already spent that $2.5 trillion long ago on programs such as education, foreign aid and defense. Add the $2.5 trillion Social Security obligation onto our other obligations and our current national debt  stands at $12.5 trillion, or nearly $42,000 for every man, woman, and child in the country. And it will only get worse under President Barack Obama’s Budget. It would:

1) borrow 42 cents for each dollar spent in 2010;

2) leave permanent annual deficits that top $1 trillion as late as 2020;  and

3) dump an additional $74,000 per household of debt into the laps of our children and grandchildren.

Responding to such unsustainable borrowing, Moody’s rating agency announced Monday that the United States needs to make deep spending cuts or risk losing its AAA credit rating. From the report:

“growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.”

Losing our AAA rating would send interest rates higher, increase our borrowing costs, and send the percentage of GDP we spend servicing our debt sky rocketing. Bloomberg adds:

“the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013.”

The message from Moody’s was clear: the U.S. federal government must change direction on spending or face economic disaster.

The leftist majorities in Congress and the White House are not listening. Instead of reining in federal spending and tackling our existing Entitlement crisis, they are locked in an all out push to create a brand new $2.5 trillion health care entitlement. The President may say his plan is deficit neutral, but the American people do not believe him. And they are wise not to. The President tries to pay for his plan with over half a trillion dollars in Medicare cuts over the next decade. The president’s own Centers for Medicare and Medicaid Services reports that these cuts would cause one-fifth of all health care providers to go bankrupt. Congress would never allow those hospitals to go out of business. Congress will never actually make those Medicare cuts. So already Obamacare is half a trillion dollars in the red, and we haven’t even tacked on the hundreds of billion of dollars the doc fix adds on.

Reducing our entitlement obligations is the only way to prevent our nation from becoming another Greece. We need to:

1) to show these programs’ long-term obligations in the budget;

2) target these programs to only who that need them; and

3) strengthen personal responsibility by making it easier for people to build personal retirement savings and use health care savings accounts.

But first we must avoid the fiscal insanity that is Obamacare.

---30---

Quick Hits:

  • Finance ministers from the 16 nations that use the euro failed to produce a detailed bailout plan for the $74 billion Greek budget deficit.

  • Speaker Nancy Pelosi (D-CA) told leftist bloggers yesterday that the Senate health bill does contain a public option (18 million more Americans placed on Medicaid) and said of passing the Senate bill: “Once we kick through this door, there’ll be more legislation to follow.”

  • Speaking of those 18 million Americans Obamacare would place on Medicaid (a welfare program), The New York Times reports that: “With states squeezing payments to providers even as the economy fuels explosive growth in enrollment, [Medicaid] patients are finding it increasingly difficult to locate doctors and dentists who will accept their coverage.”

  • The Los Angeles Department of Water and Power is set to jack their consumer’s electric bills up between 8.8% and 28.4% in order to pay for a solar plan and a 20% renewable energy mandate.

  • According to Gallup, Americans are less worried about each of eight specific environmental problems than they were a year ago and are worried least about global warming.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT