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Healthcare Underfunding

I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts. -Abraham Lincoln

The American people have not been given the truth by our political leaders since the Eisenhower administration. By hiding the truth and not addressing the unsustainable trend of our social programs, our leaders have insured a painful outcome of this trend. In 1965, 27% of Federal spending was mandatory. Today, 53% of Federal spending is on auto-pilot. The entire Social Security, Medicare, and Medicaid system will need to be overhauled or scrapped. Benefits will have to be reduced and taxes will have to be raised. There are no other choices. Medicare costs will explode over the next 40 years. The increasing debt will result in interest payments on the debt becoming the largest expenditure in the federal budget. The longer we wait to address this unavoidable train wreck, the more likely it will result in generational warfare between baby boomers and younger generations.

Source: Perotcharts.com

As entitlements and net interest grow, discretionary spending gets squeezed. Non-defense programs, which include, activities related to children, transportation infrastructure, education, training and research that should promote future economic growth and prosperity, come under increasing funding pressure. We are forced to ignore investments in the future to pay for commitments made decades ago. The short term focus of our Washington politicians has ruined our fiscal future. Children don’t vote, and younger people are less involved in the political process. As a result, the political gain from immediate increases in spending or reductions in taxes outweighs the eventual economic benefits of more politically costly but fiscally responsible choices. This is a criminal and immoral act upon our future generations. It is time to hold these politicians accountable for their actions. Again, Abraham Lincoln’s wisdom from 150 years ago applies today.

“You cannot escape the responsibility of tomorrow by evading it today.”

Source: Perotcharts.com

The above chart proves we cannot possibly grow our way out of this problem. On average, more than 10,000 baby boomers will become eligible for Social Security benefits each day for the next two decades. As they do, there will be fewer workers supporting a growing number of retirees. This eventually will place an unfair burden on younger workers, who will end up bearing the brunt of future taxes. A politically unpopular decision deferred today is a tax increase on future generations. The United States spends 16.5% of GDP on healthcare every year. This is far more than any country on earth. This amounts to $2.3 trillion per year. Even with this immense spending, there are 47 million Americans without health coverage. Canada, Australia, and Sweden only spend 9% of GDP and cover all of their citizens. The waste, fraud and bureaucracy of our system are out of control. Nationalization would be a disaster. Totally free markets favor only the rich. There is no easy answer. It will take compromise, sacrifice, and intelligence to solve this problem.

Immigration

As our country sinks deeper into this recession and more people lose their jobs, anger at illegal immigrants will continue to grow. This is not an unexpected reaction, as anger has to be directed somewhere. According to a Pew Institute report, there are 11 million illegal immigrants in the United States, with almost 50% of the total in California, Texas and Florida. Approximately 57% of the illegal immigrants are from Mexico and another 24% from other Latin American countries. The cost to the American taxpayer is huge. Estimates of the annual cost are in the range of $300 billion per year. Some disturbing statistics include:

  • $11 Billion to $22 billion is spent on welfare to illegal aliens each year by state governments.
  • $2.2 Billion dollars a year is spent on food assistance programs such as food stamps, WIC, and free school lunches for illegal aliens.
  • $2.5 Billion dollars a year is spent on Medicaid for illegal aliens.
  • $12 Billion dollars a year is spent on primary and secondary school education for children here illegally.
  • $17 Billion dollars a year is spent for education for the American-born children of illegal aliens, known as anchor babies.
  • $3 Million Dollars a day is spent to incarcerate illegal aliens.
  • 30% percent of all Federal Prison inmates are illegal aliens.
  • $90 Billion Dollars a year is spent on illegal aliens for welfare social services by the American taxpayers.

Why are there 11 million illegal immigrants in the country? So the rich can have housekeepers and landscapers. So homebuilders have cheap labor to put roofs on their houses. So farming conglomerates can have someone to pick their crops. All of these people benefit from cheap illegal labor. The American taxpayer foots the bill for the social costs.

Source: Perotcharts.com

Now the really bad news. We need a large increase in immigration in order to have any chance at maintaining a decent standard of living in the future. The number of Americans over 65 years old will increase by 75% between 2010 and 2030. These 70 million people will all be collecting Social Security and sucking our system dry. There aren’t enough young people to replace them in the work force. With only 28% of Americans achieving a college degree, we need to undertake a concerted effort to bring in as many smart immigrants as possible and convince them to stay here after graduation. Our educational system is graduating too many Bluto Blutarskys and not enough Einsteins.

Dean Vernon Wormer: Zero point two... Fat, drunk and stupid is no way to go through life, son.

Bluto: Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!

Bluto: Christ. Seven years of college down the drain.

Our only realistic chance to solve many of our fiscal problems is through discoveries in science and medicine that can only happen with highly educated people whether they are born in the U.S. or elsewhere.

If we could increase the expected 2030 population from 351 million to 380 million, those added taxpayers would greatly help the national fiscal situation. Regarding the 11 million illegal aliens already in the country, it is not feasible to round them up and send them back. Mexico is already on the brink of implosion, with drug lords controlling much of the country. A realistic approach is needed.

Overseas Military Commitments

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hope of its children.

Dwight D. Eisenhower – Farewell Speech

The man who led the Allies to victory in WW II warned the country that the Military Industrial Complex was too powerful. We did not heed his warning. The United States, the only superpower remaining on earth, currently spends more on military than the next 45 highest spending countries in the world combined. The U.S. accounts for 48% of the world’s total military spending. The Cold War has been over for 20 years, but we are spending like World War III is on the near term horizon. There is no country on earth that can challenge the U.S. militarily. So, why are we spending like we are preparing for a major conflict? The impression on the rest of the world is that we have aggressive intentions. Defense spending had peaked at just under $500 billion in 1988. The fall of communist Russia did result in a decline to the $350 billion range from 1995 through 2000, and an economic boom ensued. Since 9/11 we have doubled our spending on defense.

George Bush’s pre-emptive war has cost the American taxpayer $800 billion so far. The human cost of this war is worse than the dollar cost. Almost 5,000 Americans have died for the lies of Dick Cheney and Donald Rumsfeld. Thousands of mothers, fathers, sisters, brothers, wives, husbands, and children have lost their loved ones for a false cause. Our National Guard troops have been stretched beyond the breaking point. Military families have been devastated by multiple deployments. Soldiers are committing suicide in record numbers. Returning soldiers are not being treated for psychological illnesses. The anger of the Guns N Roses song Civil War captures how I feel.

Look at your young men fighting
Look at your women crying
Look at your young men dying
The way they've always done before

Look at the hate we're breeding
Look at the fear we're feeding
Look at the lives we're leading
The way we've always done before

I don't need your civil war
It feeds the rich while it buries the poor
You're power hungry sellin' soldiers
In a human grocery store
Ain't that fresh
I don't need your civil war

If as a country we continue to allow our politicians and their military industrial complex corporate sponsors to spend $800+ billion per year on weapons, to the detriment of higher education, alternative energy projects, and national infrastructure needs, we will be paying an extremely high price. According to the Defense Department’s latest "Personnel Strengths" report, the United States now has troops stationed in 147 countries and 10 territories. Why are we policing the world? What is the point of having 57,000 troops in Germany and 33,000 troops in Japan? Germany and Japan each spend $40 billion per year on their military. Can’t they defend themselves at this point?

We have some of the brightest engineers in the country developing weapons to kill human beings more efficiently. There is an enormous opportunity cost that is being paid. These engineers could be concentrating their brilliance on developing alternative energy solutions which could free us from our Middle East oil dependence. Which effort would benefit our country more, weapons development or energy independence? War and non-stop conflict benefit the military industrial complex. It is in their best interest to support candidates that favor an aggressive foreign policy. This has led to Defense companies using their influence to provoke conflict throughout the world. President Eisenhower’s final words in his farewell address are the most chilling.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

If the words of a noble 20th century President aren’t enough to convince you of a dangerous too powerful military, maybe the words of our Founding Father will.

Over grown military establishments are under any form of government inauspicious to liberty, and are to be regarded as particularly hostile to republican liberty.

George Washington

Are You Part of the Cure or Part of the Disease?

Come out upon my seas, curse missed opportunities (am I)
A part of the cure, or am I part of the disease

Clocks - Coldplay

I think I’ve made a valid case that our government is on a burning platform of unsustainable policies. The important point now is how do we put the fire out and save the country from imploding under a mountain of debt? This is where ideology needs to be put aside. The best ideas from anyone should be considered. I believe that Samuel Adams was correct.

It does not take the majority to prevail, but rather an irate, tireless minority, keen on setting brush fire freedom in the minds of men.

Some ideas for consideration follow:

  1. We know that Congress is corrupt and in the pocket of lobbyists. They show no courage to make necessary unpopular decisions because they won’t be re-elected. The founding fathers envisioned representatives who did their civic duty for a short time and then went back to their real profession. Almost 200 out of 535 members of Congress are lawyers and lifetime politicians. This explains much about our predicament. Term limits would inject our leaders with a dose of courage. Maybe they would do what was best for the country if they knew that they would only be in Washington for six years.
  2. Outlawing lobbyists and PACs would remove the buying and selling of votes in Congress. We must remove the corruption from Washington DC.
  3. The PAYGO rules that were allowed to expire in 2002 must be reinstituted. These rules would not allow new spending initiatives without an equal cut in other spending. These rules allow Congressmen to pretend to have a backbone and say no to constituent demands.
  4. The banks that are insolvent will need to be nationalized, investors wiped out, and good assets sold off to good banks. Nouriel Roubini lays out a logical scenario. The sooner we purge the system of its bad debt, the sooner we can get this economy on a positive track.
  5. Dr. John Hussman has a solution for the foreclosure disaster that would not stick the U.S. taxpayer with the bill. Banks could write down the mortgage balance but receive a PAR (property appreciation right) back from the homeowner. The idea is discussed in more detail here.
  6. The U.S. carmakers need to be restructured within a pre-packaged bankruptcy. They want another $39 billion of your tax dollars. No more taxpayer funds can be wasted on these bloated pigs.
  7. A truly non-partisan commission appointed by the President with the power to put forth a comprehensive plan to restructure Medicare, Medicaid, and Social Security for an up or down vote by Congress is the only way to create a viable future. Congress must be forced to confront this issue.
  8. John McCain’s moderate approach of allowing a path to citizenship seems like the best immigration plan. Most came here to try and live a better life. If they have committed crimes or don’t follow the prescribed path to citizenship, then they need to be expelled from our country. We need to encourage foreign professionals to immigrate to America with incentives, if necessary.
  9. If 50% of the $1.4 trillion annual military related budget was redirected to debt reduction, energy independence, and infrastructure rebuilding, we would actually get a positive return on our tax contribution. Our military is supposed to defend our country, not invade sovereign nations.
  10. A “Manhattan Project” to develop new energy sources which would eliminate the $400 billion per year that we send overseas for foreign oil. The number of high paying jobs that could be created by building nuclear power plants, wind farms, and converting vehicles to natural gas would be in the hundreds of thousands.
  11. A tax system that eliminated all the preferences and loopholes for corporations and individuals while lowering rates would be fairer. Maybe even our Treasury Secretary could do his taxes correctly. Congress and lobbyists use the tax system to push their agendas. A flat tax or replacing the income tax with a national sales tax are other possible options.
  12. The Federal Reserve needs to be abolished. A currency backed by gold or a basket of precious metals would restrict what Congress could spend. This would save us from ourselves. The dollar has lost 93% of its purchasing power since Nixon closed the gold window in 1971 and the National Debt has gone from $389 billion to $10.8 trillion, a 2,800% increase in 38 years. Politicians will spend your money if they are given the chance. Let’s not give them the chance.

“All tyranny needs to gain a foothold is for people of good conscience to remain silent.” - Thomas Jefferson

When I was a kid and I’d read something fascinating in a book, I’d breathlessly tell my Dad what I’d learned. He’d look up from his newspaper and say, “Don’t believe everything you read”. I’d be so mad, but his advice produced a world class skeptic. Don’t believe anything or anyone until you’ve verified their facts and figured out their motives. If you are tired of remaining silent and have ideas you want to discuss, join me at TheBurningPlatform.com to have a forum for ideas that can put our country back on track.

Source: The Burning Platform (Part 2 of 2)