A MINORITY VIEW
BY WALTER WILLIAMS
RELEASE: WEDNESDAY, AUGUST 11, 2010
What Handouts To Cut
Because of failure to heed the limitations of the U.S. Constitution, which has produced runaway federal spending, our nation sits on the precipice of disaster. Former Senator Alan Simpson of Wyoming and Erskine Bowles, White House chief of staff under President Bill Clinton, co-chairmen of President Obama's debt and deficit commission, in a Washington Post article "Obama's Debt Commission Warns of Fiscal 'Cancer'" (July 12, 2010) said that "(A)t present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- the whole rest of the discretionary budget is being financed by China and other countries."
The commission added the current budget trend is a disaster "that will destroy the country from within" unless checked by tough action in Washington. The tough action required is spending cuts in programs, including the so-called nondiscretionary, eating most of the federal revenues.
According to the Census, around 80 percent of Americans 65 and older own their own homes compared to 43 percent under 35. Twenty-three million households, or 37 percent of all homeowners, own their homes free and clear, and most of these are seniors aged 65 and older. According to the Federal Reserve Board's 2007 "Survey of Consumer Finances," the median net worth of people 65 and over is $232,000, those under 35 years have a net worth of $12,000 and for those 35-44, it's $87,000.
For good reason, older people have accumulated more wealth than younger people; the primary reason is that they've had more time to do it. There is no logical case that can be made for using the tax system to force Americans with less wealth to subsidize those with more wealth. But it's not clear who is subsidizing whom. Consider an elderly widow, say 70 years old, with a modest retirement income of $18,000 living in a $300,000 house that's fully paid for. She might receive local property tax forgiveness, medical and prescription drug subsidies and other federal, state and local subsidies based upon her age and income.
When subsidies are provided for this lady, whom are we truly benefiting? It's not the lady but her heirs. Conceivably, the lady could make a deal with a financial institution to pay her property taxes, allow her to live in the house for the rest of her life and give her a lump sum cash settlement so that she can live without the handouts. Upon her death, the house becomes the property of the financial institution, not her heirs. Giving the widow handouts allows her to bequeath to her heirs her assets, a $300,000 house. If her children want to inherit the house, they, rather than taxpayers, ought to take care of their mother.
We can start getting the federal spending under control by ending subsidies to people with high net worth that can be ready turned into cash such as a home or business. While seniors might say that they support reduced government spending, they, like other handout recipients, believe they have a right, through government, to live at the expense of others. What's more, they have considerable clout -- they vote in large numbers. Only 50 percent of young people vote, but up to 70 percent of seniors vote.
Political guts have always been in short supply and politicians fear senior retaliation at the polls. Moreover, it's a practical matter for seniors and politicians. The true economic calamity won't hit the country until 2030 or 2040. By that time, both today's politicians and seniors will be dead so why should they make sacrifices now to prevent an economic calamity decades off into the future? Seniors might protest my cynicism but they can easily prove me wrong by waging an effective campaign to end handouts based on superannuation.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com. COPYRIGHT 2010 CREATORS.COM
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Interesting. Is he calling for eliminating Social Security/Medicare/Medicaid based on a person's accumulated assets? If so, I'm not sure I entirely agree. By the time I retire, I expect that I (and my employers on my behalf) will have paid the better part of a half million dollars into the Social Security/Medicare/Medicaid programs. If I receive some of that back, I don't consider that to be "young people with no wealth" subsidizing me, certainly not to the point that I should have to sell my house back to my bank in order to receive what will likely be a small portion of what I paid in.
Yeah, I know... How very Socialist of me...
My preference would have been to have retained all of that stolen money to begin with, but, now that I"ve been paying for it for 40 years (and will continue to do so for the next 15+), I'd like to be able to collect a little return on my investment...
Interesting. Is he calling for eliminating Social Security/Medicare/Medicaid based on a person's accumulated assets? If so, I'm not sure I entirely agree. By the time I retire, I expect that I (and my employers on my behalf) will have paid the better part of a half million dollars into the Social Security/Medicare/Medicaid programs. If I receive some of that back, I don't consider that to be "young people with no wealth" subsidizing me, certainly not to the point that I should have to sell my house back to my bank in order to receive what will likely be a small portion of what I paid in.
Yeah, I know... How very Socialist of me...
My preference would have been to have retained all of that stolen money to begin with, but, now that I"ve been paying for it for 40 years (and will continue to do so for the next 15+), I'd like to be able to collect a little return on my investment...
Some of the biggest problems with Social Security, Medicare and Medicaid is that, first, the Feds (democrats, I believe) raided the social security lockbox and left it on the verge of bankruptcy. While it may be a bit socialist, from a capitalist standpoint it stands to reason we've paid into this annuity for our whole lives and we should expect that money to come back to us, as the original deal was supposed to be. The intent was to keep the elderlyfrom becoming destitute, certainly a worthy cause. It is the politicians who corrupted and bankrupted that part of the system.
Also, for these 3 'untouchables', the government (again, the libtards implemented damaging and dangerous policy here) is cutting checks to people who never paid into the system...certainly a drain on those programs as well.
I guess what I'm looking at, is the government cessation of all wasteful spending...cutting foreign aid....recall troops from overseas...give Iraq back to the Iraqis, and Afghanistan back to whatever species of subhuman lives there. STOP SPENDING ! Repeal the medical care package...it'll save a few trillion dollars.
The goal should be to reduce the amount of collateralized debt held by the Chinese and in so doing, shore up our own economy; we need to be in a position to keep 'The Big 3" running..there's so much other stuff we can cut in an attempt at fiscal stability.
FYI, there was never ever a lock box. From day one SS and medicare was a tax based on a ponzi scheme. The ponzi scheme has just about all colapsed. We need to means test it today and in return eliminate it all together for those under 40. Ipsc, we're screwed and have been screwed by our parents and grandparents. It sucks we need to pay the price but lets no do it to our kids.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
I thought there was a point where the government determined that it could use social security "trust fund" money for general budget purposes, simply by giving the trust fund a promissory note...
In Helvering v. Davis (1937), the court held that Social Security was not an insurance program, saying, "The proceeds of both (employee and employer) taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way."
In a later decision, Flemming v. Nestor (1960), the court said, "To engraft upon Social Security system a concept of ‘accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands ..." That flexibility and boldness mean Congress can constitutionally cut benefits, raise retirement age, raise Social Security taxes and do anything it wishes, including eliminating payments.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Lovely... So a whole generation of us stand to get screwed to the tune of a half million dollars...
Our predecessors got to reap the benefits of their contributions. Our successors will be able to keep their money (maybe) and fully plan for their future. Those of us in the middle, who have been paying in for 50+ years, who have built up a modest bundle of assets, and whose plan includes a partial supplementation from social security, and perhaps leaving something to our children, get screwed and have to sell all of our stuff back to the banks...
Oh but it keeps getting better. The Dems are eying your retirement accounts and have been for years. That's easy money for the taking in return for the same promise of SS. I wish that was all. Timmy boy is on record also for going after your house now as well. Seems he doesn't like the 250k and/or the 500k you get to keep in profits tax free from the sale of your home. They need the money. Oops, they need their money.
__________________
John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Oh but it keeps getting better. The Dems are eying your retirement accounts and have been for years. That's easy money for the taking in return for the same promise of SS. I wish that was all. Timmy boy is on record also for going after your house now as well. Seems he doesn't like the 250k and/or the 500k you get to keep in profits tax free from the sale of your home. They need the money. Oops, they need their money.
I believe you have just outlined events that will precipitate the fall of the republic...and the commencement of a greater civil uprising.
If its' true that all societies have a 'lifespan' which , unavoidably, must descend into blood and savagery, then our time is soon. I believe the confiscation and/or incorporation of individuals' private assets for 'the greater good' will be our 2nd civil war...it remains to be seen where the battles lines will be drawn.
Yep, no doubt that the US needs to cut handouts. So called "conservatives" like Williams rail on about cutting SS and a lot of other stuff: How convenient that they always forget about one of their favorite welfare handouts. That handout is farm welfare. Ten percent of farm welfare recipients get over 75 percent of the farm welfare pie.
The Gray Cattle Co. is the prince of farm welfare in my congressional district.
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What Handouts To Cut
