About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Sunday, August 12, 2018

Crossing The Swamp

Below is John McNaughton's latest painting entitled Crossing The Swamp.  Mr. McNaughton is an artist of world renown with previous paintings like The Forgotten Man & Respect The Flag.
 
click on painting to enlarge
 
The administration officials in the painting above are from left to right:  Nikki Haley, James Mattis, Ben Carson, President Trump, Jeff Sessions, Mike Pence, Melania Trump, Mike Pompeo, Sarah Huckabee Sanders, Ivanka Trump, John Bolton, Kellyanne Conway, & John Kelly.
 
Click here to hear Mr. McNaughton explain why he wants to be on that boat crossing the swamp.  I hope we all get on board. 
 

Sunday, August 5, 2018

Why Politicians Don't Want To Solve The Social Security & Medicare Funding Problems

"Your estimated benefits are based on current law.  Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 79 percent of scheduled benefits." – from the June 2018 Social Security Statement.  A personalized Social Security statement including the up to date benefit reduction amount is mailed to everyone periodically starting @ age 25 & is also available online.
 
I have never met one person @ my FairTax seminars or anyone who has participated in radio programs I have been on that was aware of this benefit reduction warning – even though it has always been prominently displayed on page 1 or 2 of the aforementioned Social Security statement.
 
click on graphic to enlarge
 
The trustees annual report of Social Security & Medicare issued in June reported that for the first time since 1982 the Medicare hospital-insurance trust fund (HI) & both the Social Security trust funds for retirement (OASI) & disability (DI) will be forced to dip into their reserves this year.  These trust funds are projected to continue diminishing until they are depleted – the Medicare hospital-insurance trust fund in 2026, the Social Security retirement trust fund in 2034, & the Disability trust fund in 2032.  See graphic below.
 
click on graphic to enlarge
 
The depletion of the Medicare hospital-insurance trust fund is now projected to be three years sooner than was projected in last year's trustees report – so in the case of Medicare in one year's time we lost three years.  In the case of the Social Security retirement trust fund there was only a loss of a few months in the projected life of the trust fund since the last annual report.  Not good but much better than for Medicare.
 
With regard to starting to draw on the respective trust funds in 2018 Social Security moved up four years sooner than calculated in the last annual report & Medicare moved up five years sooner.  We can question the caliber of the calculations but the important point is that trust fund interest income plus both Social Security & Medicare payroll taxes are not enough to cover benefits starting this year.
 
As regular readers of RTE know the trust funds of both Social Security & Medicare are accounting gimmicks in that the money has been received from payroll taxes in the surplus years but Congress could not resist spending the surplus & putting IOUs in the trust funds' non-existent lock boxes.  There are no real economic assets in the trust funds whose bookkeeping balances will be recalculated as money is theoretically drawn down until it reaches zero – the point that the above mentioned 21% reduction in Social Security retirement benefits will occur for all participants regardless of age.  Medicare hospital benefit reduction is estimated to be 9% upon exhaustion of the Medicare hospital-insurance trust fund.
 
From the mid-1980s through 2009, Social Security took in more in tax revenue than it paid out in benefits, which allowed it to build up its trust-fund reserves.  In 2010 Social Security's expenditures began to exceed its tax income, so it began to rely on its trust funds' interest earnings, paid from the government's general fund. Source – Charles Blahous, former public trustee for Social Security & Medicare programs.
 
See graphic below that shows the way Medicare is financed – cost measured as percent of GDP on the graphic.  Note the increasing slopes of the curves for premiums for people on Medicare, general revenue transfers from taxpayers of all ages – young & old alike, & of course the total cost curve.  The Medicare deficit widens as shown on the top of the graphic – there is no provision under current law to finance that shortfall through general revenue transfers or any other revenue source.
 
click on graphic to enlarge
 
Now all of us who are breathing know that the demographics for the sustainability of Social Security & Medicare is terrible.  There are 10,000 baby boomers reaching the age of 65 every day between now & 2029 & the number of workers who support one Social Security retiree has dropped from 41.9 in 1945 to less than 2.9 today with projections of 1.5 in the out years.  See graphics below.
 
   click on graphics to enlarge
 
When I was in my 30s & 40s people just starting out in the business world in their 20s were fond of saying they believed more in flying saucers than they did in receiving any Social Security benefits.  Since they were new to the business world they had not paid a lot of payroll taxes so they thought they could afford to be cavalier about it & even possibly thought something would be done to improve Social Security's outlook.  But here we are today & these people have now paid payroll taxes all of their business lives & are ready to retire dependent on the Social Security & Medicare programs described above.
 
So with such an obvious problem that has been obvious for decades, why have our elected representatives not forged ahead to solve it?  Lawmakers have a broad list of policy options that could close or reduce the long-term financing shortfalls of both Social Security & Medicare – I have suggested the best ones repeatedly on this blog.  The sooner the problem is addressed & remedied the better – who can disagree with that?  The sooner a proper fix is implemented the more time will be available to phase in changes to give the public time to adjust & prepare.
 
Well, to answer the subject question, most politicians who advocate against poverty have no personal stake in eliminating poverty's cause or foresee themselves having Social Security & Medicare being the economic foundation of their existence.  In fact, statists - Democrats & RINOs - have a vested interest in keeping people in poverty or heading that way dependent on programs like Social Security & Medicare whose financial condition is only projected to deteriorate – their deceitful rhetoric gives false hope to those who have not yet realized man's natural God given condition is one of freedom, self sufficiency, & prosperity. 
 
The statists' aim is to make as many people as possible dependent on government – both financially through taxes & physically through universal healthcare.
 
 

Thursday, July 26, 2018

Birthday Quiz

Thanks to the National Museum Of Mathematics (www.MoMath.org
) for providing the following quiz that appeared in the WSJ – although some in the readership will be relieved to know that this quiz is more about reasoning than math.
 
Please let me know how you work the problem.  I will post all correct answers or alternatively will send the solution privately to anyone who requests it if no one figures it out.
 
Birthday Quiz
 
A while back, Nick stated: "Sometime during last year, I was still 21; in two days I'll be in my 25th year."
 
What day of the year is Nick's birthday & on what day of the year is he speaking?