Tuesday, February 2, 2010

Obamics: Gladly Pay You Tuesday for a Hamburger Today

In the Popeye Cartoon, Wellington Wimpy's oft repeated phrase: "I'll gladly pay you on Tuesday for a hamburger today" was ludicrous even to the five and six year olds watching the show. Children understand the morality lacking in Wimpy's request. They know that eating a hamburger you can't pay for until tomorrow is wrong. They know it intuitively. The request is laughable. And laugh they did. Popeye is a cartoon after all.

All the more tragic as we watch Wimpy Economics (aka Obamics) being played out before our very eyes. With our very own money.

Would that Obama had studied at the feet of Popeye instead of Wimpy. At least then we could imagine he was fighting for our side. For good. Against evil.

Every month whether you want to (or even know it) or not, you pay a hefty tax for Social Security benefits to be claimed at some date in the future. When you retire after decades of hard work. And are dependent on whatever you set aside in your 401k and paid into Social Security. The plan was established as a Sacred Trust between you and your government. The money set aside was to be left in the giant Social Security pot of funds to pay benefits. Instead the system is bankrupt. Congress has seen fit to take the Sacred Trust money--your social security and use the funds to reduce the deficit--in other words: imagine your teenage son drains your savings account to purchase a brand new Mustang--the Shelby GT 500--the one he has always wanted. Of course he doesn't have the money. Who cares? He can steal yours. That, my friends, is what Congress has done with your Sacred Trust. They spent it.

No matter the dishwasher blew and you had to purchase a new one unexpectedly. No matter your daughter got a flat tire on both front tires, or you need dental work, or new drapes or a new car, clothes, a vacation... though you earn the money your priorities are second to the government. They will get their fair share come hell or high water and never-you-mind what they do with it. Nancy Pelosi knows how to spend money, you can count on that. Flowers and bottled water and tax-payer funded jaunts in military jets with family and colleagues are just a few small perks. Would you begrudge her these? She is, after all, a very important person.

In 1998, The Heritage Foundation published the following:



June 22,1998

Social Security's long-term unfunded liability is immense because the system will begin paying out more in benefits than it collects just 12 years from now. Although the cash deficit in 2010 is less than $1 billion, the numbers quickly climb to staggering levels thereafter:

  • Social Security's annual cash shortfall will reach $90 billion in 2015.

  • Social Security has promised to pay nearly $500 billion more than it will collect in taxes by 2025.

  • In 2035, just ten years later, the annual deficit will be more than $1 trillion.

  • In 2075, the last year for which the Social Security Administration provides numbers, the total annual shortfall will reach an incredible $7.5 trillion.

  • Even after adjusting for inflation, the deficits are immense, reaching $200 billion in 2025, $300 billion in 2035, $400 billion in 2056, and $500 billion in 2068 (in 1998 dollars).

  • The aggregate inflation-adjusted shortfall in the Social Security system between now and 2075 will be more than $20 trillion. This unfunded liability is more than 6 percent higher than it was just one year ago.

  • The "present value" of the shortfall (which measures how much money would need to be invested today to finance future unfunded benefits) is more than $5 trillion.

Sources include the OASDI Trustees’ Report and the Social Security Administration's Office of the Actuary. The Trust Fund report includes annual estimates for the next ten years and for every fifth year thereafter.

That was then. When the economy was still booming. When unemployment was half of what it is now. When spending deficits were in the Billions not the Trillions.

The Sacred Trust is bankrupt. Add the effects of the Obama budget--spending spending spending--and we have a very dangerous game of Wimpy Economics. A government willing to gladly pay us later for retirement benefits now....Obamics.

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