Tuesday, May 12, 2009

NYT: Social Security & Medicare Closer To Insolvency

The New York Times just released an article a few minutes ago about how the current poor economic climate has increased the moment when Social Security and Medicare will go insolvent.

The interesting thing about this article reports quotes from various politicians and bureaucrats who want to keep these kinds of programs running even when the funds are no longer available:

"The shorter deadline for Social Security insolvency does not mean that future retirees would receive nothing after that date.

The trustees noted that even when the Social Security trust fund is exhausted in 2037, tax revenues will presumably continue to come in. But benefits would be limited to the amount paid in that year, and would probably continue at only 75 percent of their promised level — 3 percentage points less than was projected in last year’s report."
What a brilliant idea!? Lets keep funding these programs even when they've gone bankrupt!! Its nice that politicians want to keep these programs from going insolvent and by working in a bipartisan manner to find a solution:

"The Treasury secretary, Timothy F. Geithner, said in a statement on Tuesday that the new projections underscored the need for a bipartisan approach to shoring up the two programs, through what he said would be “difficult but achievable changes.”

“That is why even as this president has focused on pulling our nation out of economic recession, he has made clear his commitment to working in a bipartisan way to address the long-term health of Medicare and Social Security” and, he added, “not simply pass on our debts.”
However, it is foolish to think that the leaders in Washington D.C. won't pass on our debts to younger generations in attempt to "save" these welfare programs. The truth is that politicians and bureaucrats will ALWAYS pass on the debt to the next generation. President Ronald Reagan did it in 1983 when he approved a $165 Billion bail out for Social Security. In the eyes of our elected leaders, the only solution to save Social Security is to spend more of the taxpayer's money.

The best and most wise solution to fixing this problem is to let these welfare programs (and others like it) die out when they become bankrupt. These programs should not be revived for the simple reason that welfare programs violate the U.S. Constitution.

President Franklin Pierce, in 1854, explained why such programs are unconstitutional:
"[I must question] the constitutionality and propriety of the Federal Government assuming to enter into a novel and vast field of legislation, namely, that of providing for the care and support of all those … who by any form of calamity become fit objects of public philanthropy ... I cannot find any authority in the Constitution for making the Federal Government the great almoner of public charity throughout the United States. To do so would, in my judgment, be contrary to the letter and spirit of the Constitution and subversive of the whole theory upon which the Union of these States is founded."
In 1887, President Grover Cleavland made this statement about the unconstitutionality of government welfare programs:
"I find no warrant for such an appropriation in the Constitution, and I do not believe that the power and the duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit.

The friendliness and charity of our countrymen can always be relied upon to relieve their fellow citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."
It is a shame that we used to have politicians who were faithful to the Constitution and refused to waste the tax payer's money. They understood that is the people, not the government, who are in the best position to help the downtrodden. They knew that it was the local community and private institutions who are the most efficient in providing relief to those who need it.

We need politicians who understand these principles. Where are they?

UPDATE: CNN had an expert come out and talk about how Medicare is the real danger, not social security. Riiiiiiight.

UPDATE #2 (5/14/09): Here's a nice blog explaining why Medicare is a real danger but Social Security is still a problem.

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