Saturday, July 30, 2011

The TRUTH is still missing

So, here we are on the evening of July 30th, 2011 and the Federal Government of the United States of America is poised to enter into the twilight zone of fiscal default, which is something it has never officially done in our 234 year history. The reasons we have arrived at this critical point are many and "blame" can reasonably be shared across our political arena. A key factor that is still missing, however, is the TRUTH. 

There is no question that our collective debt has expanded to levels that are not tolerable. But, when our politicians speak of a 14.5 trillion dollar debt it is somewhat misleading because over 5 trillion of the total is owed to ourselves. That doesn't mean that the 5 trillion doesn't need to be repaid at some point but we have been given the impression that we have a 14.5 trillion bill from some foreign nation that "must" be paid immediately. Simply not the truth. As you listen to both sides go back and forth about the National Debt and who should get the most "blame" for it, note these numbers and consider the Presidents and Congressional Party makeup and events that have happened during the past 40 plus years. In 1970 our National Debt was 370.9 Billion dollars. In 1980 our National Debt was 907.7 Billion dollars. In 1990 our National Debt was 3.23 Trillion dollars. In 2000 our National Debt was 5.67 Trillion dollars. In 2010 our National Debt was 13.56 Trillion dollars which was more than 36 times the 1970 level! Obviously, there is a systematic issue that has created the explosion in our total debt and the political affiliation of the President or members of Congress has, in the overall, had little or no impact on the growth of the debt.



For those who listen to or support all the talk about a Constitutional Amendment that would mandate an annual "balanced" budget either do not understand the process or do not know how to do the math. But, then again, our whole method of estimating annual budgets and extending fiscal estimates out 10 or more years is nothing more than a political and financial way to tricking us all into believing that our situation is better or worse than it actually is. I seriously doubt that ANY budget that has ever been submitted, voted on, and approved has ever contained numbers that actually lasted the length of time proposed or yielded the proposed results. 10 years? Really? How many of you as individuals or as a small or large business has EVER written out a 10 year budget plan or ever had your situation remain stable enough to not have to change things for 10 years? The truthful answer should be; ZERO. Even the numerous States that have balanced budget mandates contained in their State Constitutions seldom, if ever, go through a single year where revenues exceed expenses. Sure, there are a few exceptions, but our State legislators play the same games and extend things, defer things, over or under estimate revenues or expenses mainly to make us all feel better about voting them back into office in the next election cycle. The Federal Government can and does create any series of numbers it chooses to mask the truth.

IF, and it is a huge if, those that appear so outraged about the amount of "debt" our Federal Government has are truly serious, why have they not demanded that the Federal Government PAY back the 3 plus TRILLION dollars that Congress has allowed to be "borrowed" (more like stolen) from what was supposed to be a sacred Social Security Trust Fund? Where is the grassroots "tea party" outrage at that? WHY are Social Security funds (either the money coming into the trust fund or going out) even a part of the annual Federal Budget at all? When or how was that allowed? The impression has been sold to far too many of our citizens that Social Security Benefits are an "entitlement". Really? The word infers (in the context being used by the opponents of the program) that social security benefits are somehow a gift from U.S. taxpayers, or welfare just being given away to the elderly or disabled. Really? Most American workers have spent their working lives contributing real money to their Social Security fund. Business also contributes real money for each employee. THIS IS OUR MONEY!! Money in the Trust Fund should never be used for any other purpose than to provide a benefit to individuals who have paid into their entire working lives. If the system can't sustain benefit payments because people are living longer then RAISE the retirement age for workers currently under 40 years old and raise the % of contribution for all current workers/ businesses AND provide in all the budget plans and debt reduction plans a real plan to repay the trillions that have been stolen from the trust fund for general use and certainly remove the Social Security program from any further Federal Budgets or discussions. It is (or should be) a completely separate discussion. The merits of even having a social security program at all can certainly be discussed but that too, is a separate matter. For now, we have a program and the obligations that it contains and as with our other obligations, we cannot default on them at any point. Both sides need to face the TRUTH about Social Security and stop using it as a bargaining chip or scare tactic for purely political reasons.

Our entire health system is yet another area where the TRUTH has been long forgotten. I won't go into just how bad it is in this post except to raise a few key questions for the reader to consider. WHY has there been nothing included in any legislation or discussion by either political party of actually investigating and forcing a cost justification from Hospitals, Doctors, Insurance firms, Drug firms, and other medical service providers?  The major reason that Federal or State programs like Medicare or Medicaid appear to be in such financial trouble is that costs have been allowed to expand far in excess of the amount of funding provided to the programs over the past 20 plus years. This situation did not begin with the current administration. Those who try and convince you that our entire health care system was just fine until 2009 are simply not telling you the TRUTH. The legislation passed in 2009 actually does very little to address exploding costs but is also does very little to make our health care system worse than it was or worse than it would have been anyway. The TRUTH is the TRUTH. It is much easier for the GOP to "blame" the current administration for decades of failure to control health care costs instead of actually attempting to fix the problem. The attitude is actually similar to the approach many have about our public education system. For many, it is easier to simply abandon ship and tell the masses that they wish they could help but, well, we're on our own. WHY, if there is so much "waste, fraud and abuse" in the health care system has there not been a cry and demand to provide funding and manpower necessary to investigate and actually rid the system of this problem? We have a long history of creating programs and then neglecting the oversight part of the program so that patients, vendors, insurance firms, hospitals and doctors abuse these programs and destroy them for those that are truly in need. TRUTH.

Back to our current debt and budget mess. For those "demanding" that a Constitutional Amendment for a balanced budget be a condition to allow a debt limit increase to pay the obligations (money already committed) are simply placing a nearly impossible wedge in the process. IF (and I strongly caution that care be taken before actually pushing for such an Amendment) there is a sincere goal of actually getting a Constitutional Amendment is should be a stand alone proposal. We're talking about amending the United States Constitution!! The last Amendment was ratified in 1992 after 203 years of "consideration". The 27th Amendment related to compensation of the Congress itself. The 26th Amendment, ratified in 1971 (during the military crisis of the Vietnam debacle) and lowered the voting age from 21 to 18, mostly as a reaction to the fact that young men could be drafted into the military and give their lives for our country but were, at the same time, unable to vote. The 27th was a modification of Section 2 of the 14th Amendment. The point is that the process of amending the United States Constitution is and should be a serious matter and should receive consideration and certainly NOT used as a leverage tactic concerning current debt matters for purely political advantage.


I mentioned above that care should be taken before actually pushing for a Constitutional Amendment mandating a balanced budget. Here's the problem. The vast majority of those pushing for a balanced budget Amendment are also on record as being absolutely opposed to ANY legislation that would raise the revenue side of the Federal Budget (i.e. tax increases). they are also firmly opposed to ANY real decreases in our Defense budget which currently account for more than ONE THIRD of our Federal revenues. So, to be clear, these folks want a Constitutional Amendment mandating a "balanced" Budget but with the caveat that taxes cannot be increased at any point and a third or more of the current revenues are "untouchable".  Hmmm.... I would challenge these folks to specifically show just how a truly balanced budget could be produced next year or in any year given their public positions. As long as the folks who stand up and rant about balancing budgets and reducing debt continue exempt tax revenue increases or cuts to the largest spending area we currently have and continue to exploit the Social Security Trust fund by leaving it in as part of our Federal Budget, all their talk is nothing more than just empty words without a grain of TRUTH demonstrating real commitment to fixing the problem. For those who continue to insist that the Federal Government (U.S. taxpayers) should continue to subsidize home mortgages by covering for the poor decisions made by the banking industry and home buyers alike, or continue to insist that  the Federal Government (U.S. taxpayers) should continue to subsidize higher education student loans and again protect the banking industry from their lending risks, or continue to insist that providing U.S. taxpayer dollars for goods and services to individuals who have no legal status in this country or continue to allow your federal government to "borrow" enormous amounts of money from our Social Security Trust fund, with no plan to repay it, or continue to support welfare programs for the needy without any real oversight to prevent abuse of those programs are ALSO not recognizing the TRUTH. The process and decisions involved with buying a home or pursuing higher education are decisions and commitments between individuals and the vendors themselves and the Federal or State Governments should not commit general taxpayer funds to provide the money or to protect the risk to lenders or schools. I am all for people getting higher education or other training and I am all for people setting personal goals such as home ownership but the general public should not become responsible for the financial obligations and risks undertaken by the parties involved. Our entire system of tax deductions and credits needs a serious review and a large amount of them need to be modified or eliminated altogether. Tax rates become fairly meaningless when our tax system allows the means to reduce or even eliminate the intended revenue. In addition, major areas of our Federal and State tax structure need a fair and just review and restructuring. We have far too many types of taxes or taxes disguised as fees (mainly applies to the State systems). Both parties continue to sell out this country for their own special interests in the pursuit of power and the almighty vote, but none of that is in the best interest of America or her citizens. That too, is the TRUTH.


In the end, our nation and our relative prosperity will fall because of some senseless ideology on either side of the aisle that was never the TRUTH from the start. We are all victims of this system that only benefits those with the money to make it continue. 


If there was ever a "Time To Think Again", it is now!

1 comment:

Tarun Kumar said...

you are right... you can also find latest Higher Education alerts online.