Who is at fault for the current financial crisis?
Posted by Mike Sylvester - 9/25/08 @ 10:46 am - Filed Under National Politics
The New York Times, Daily Kos, and Congressional Democrats want you to believe that the current financial crisis is the fault of Republicans.
Rush Limbaugh, The Wall Street Journal, and Congressional Republicans want you to believe that the current financial crisis is the fault of Democrats.
Any rational person should realize that neither of the above statements are true. Both Democrats and Republicans are at fault for the current crisis!
Reasonable people can think that one Party is 60% at fault and the other Party is 40% at fault or something along those lines; however, no rational person can think this is the fault of one political party.
Is there ANYONE reading this blog who thinks this was 75% or more the fault on one political party and if so why do you feel this way?
Mike Sylvester
Comments
33 Responses to “Who is at fault for the current financial crisis?”
Leave a Reply
Mike
The roots of this crisis lie with the socialistic left …the great majority of whom are Democrats.
A little reading shows that politicians in the Clinton administration opened the floodgates to loans to unqualified borrowers through Fannie and Freddie. HUD further exasperated the situation with even more such programs.
The Bush administration tried at least eight times to impose oversight on the now giant quasi-government corporations but Democrats blocked all such efforts with party line votes.
here are some articles:
http://www.villagevoice.com/content/printVersion/541234
Andrew Cuomo and Fannie and Freddie
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080924
How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=1
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
http://www.ibdeditorials.com/IBDArticles.aspx?id=306632135350949
Congress Lies Low To Avoid Bailout Blame
Gadfly,
You have done a good job of researching the portions of the problem that are the Democrats fault; however, you left all of the things out that the Republicans caused including:
The Glass Stegall Act which allowed entities like banks and insurance companies to invest in risky mortgage related assets.
In 2004 the SEC changed the rules and effectively doubled the amount of leverage that banks with at least 5 billion in capital could use. When this was done the Republicans were in control of Congress, the Presidency, and the SEC.
The above two items are the fault of Republicans and without the above two items we would not be in the situation we are in.
It took both Parties…
Mike Sylvester
[...] wrote in a previous post I believe that the Republicans and Democrats share the blame for this mess. I still think [...]
This IS the fault of Democrats in congress. Look up “Community Reinvestment Act”. This all started during Carter in 1977. In 1995 Clinton along with Democrats (it was led by Democrats at the time) expanded the program which ultimately put quotas on banks to provide low income citizens home mortgages. The vote went along party lines but republicans were able to get a mandatory reevaluation in 5 years. The reevalution came up during Bush’s administration. Bush looked at the expansion, warned congress and the American people that this exact crisis would hit. Bush put forth legislation to reign in both Freddie and Fannie and the Democrats killed the bill. LOOK IT UP! Please see Barney Franks quote on the matter in 2002-2003 (I can’t remember the exact date) In 2005 McCain reintroduced legislation to rein in Freddie and Fannie. Democrats again killed the bill. The Democrats that led the charge to kill the bill just happened to be the largest recipients of money from Fannie and Freddie. Again LOOK IT UP! This isn’t a matter of opinion. LOOK IT UP FOR YOURSELF!
Democrats that opposed regulation of Fannie and Freddie should in prison! Fire them all!
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
http://wingod.newsvine.com/_news/2008/09/18/1882860-bush-attempt-to-rein-in-fannie-and-freddy-opposed-by-congressional-democrats-2003
Any Senator and/or Representative that is blaming Bush for this crisis is lying or just plain Ignorant. Please remember that it was regulation that actually caused it. They placed quotas on banks to provide these sub prime mortgages. It wasn’t CEO’s, golden parachutes, it isn’t Wall Street’s greed. It was the greed of Democrat law makers on the payroll of Fannie and Freddie. I say take the top ten recipients in Congress of Fannie and Freddie money and put them straight in prison.
I believe that the REP have controlled both houses of congress twelve of the last fourteen years. So, in 1995 the REP passed the quotas on sub-prime mortgages. If they objected to these “quotas” and wished to reign in Fannie Mae, why didn’t they do something. Bush and the Rep majority managed to pass many laws that were opposed by the Dem. But in this case they just didn’t have their heart in the fight. Perhaps, they were told by their Wall Street backers to shut up and sit down.
Ted,
I agree with your assessment. The Republicans sure could have and should have done something about this when they were in power!
Mike Sylvester
I have little time to comment, but I would like to add a quick blurb. At what point did the fault of the people get lost?! Do you not know what you make and what you can or cannot afford? I agree the government, both of the parties be it democrat or republican are to blame, but so are we. The American People have forgotten the difference between a want and a need. The American People as a whole have no idea what living within their means consist of. Of course we can all blame marketing tactics, but I recommend taking a harder look at ourselves.
Yes, the government is a MAJOR influence; however, the average American has a great deal of power as well. I recommend we all revamp our thinking regardless of the funds the government makes available.
What about the credit rating agencies? They are the ones who gave investment grade ratings to, and assisted in the creation of, these MBSs and CDOs that turned out to be toxic. Furthermore, their incentive structure is entirely inverted. They end up loosing business when they assign poor ratings, even when they are right in doing so! Had these derivatives been appropriately rated, that is their true risk was actually accounted for, we probably wouldn’t have seen the of fallout on wall street that we did. (this is not to say that credit rating agencies are the sole cause of the crisis; but most definitely a part!)
Steve,
I agree 100%
I am sorry for pointing this out, but Mike, you are just plain ignorant. You have not commented on anything that Mateo has said and instead bashed the Republicans with Ted. You clearly have a biased opinion.
Matt
Matt,
Really?
Mike
I love it, these guys are going back to 1977 trying to blame the Dems. You can’t change history, from 1994 until 2006 Rep controlled Congress. And for six years they controlled the White House. They “claim” that the Dems expanded the reinvestment act in 1995. What they neglect to mention is that the REPS CONTROLLED BOTH HOUSES SINCE 1994. Kind of like ranting about welfare yet they never seem to change any laws or rules. They are suppose to be “conservative”. Google the US debt. Rep presidents are the only presidents to increase the debt. Seems the only thing they are conservative about are issues involving working people and the poor.
Ainsworth,
I don’t know what liberal rag you read or where you get your news, sounds like it might be Keith “the Liar” Olbermann, whatever it is, I’d suggest you take a look at this, (from 2008):
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0
This mess began decades ago, well before 1940. How did we get out of the depression? I can point to one major program that allowed the spending of current money (stimulating the economy beyond its natural limits) while creating huge unfunded liabilities. Based on this first concept, two additional programs were passed based on the same premise (1957 and 1965). Each time these programs were passed, there were small tax increases. Over time these tax increases transferred Trillions of dollars from those who would not have paid income taxes to those who did not work. All these taxes were collected with the promise that they too when they reached 65 would receive the same benefits.
Instead of saving 15 to 18% of wages, we took these peoples savings and transferred them to the government coffers in exchange for SS and Medicare payments in the future. They say trillions have been lost in the past two years. What would have been the outcome had SS and Medicare not been passed? The US savings rate would be back around 15%, there would not be a $21 Trillion unfunded liability in SS-OASI: Medicare would not have promised Trillions more for future healthcare while at the same time it would not have shifted healthcare costs to the all others increasing demand without increasing supply, but resulted in increasing costs.
We have a FDIC that has potential liabilities in the trillions if the banks should fail. We have the Federal Retirement Guarantee fund for pensions that has more liabilities than assets (AIG).
Does anyone really believe that more spending is the savior? It did not begin in 1977, but well before this when politicians began buying votes using other people’s money. They promise things that cannot be done, yet are not held accountable and the voters simply vote in fewer numbers. We are our own worst enemies.
The problem in a nut shell: When government expands beyond common defense, roads and treaties, they begin to be market players in our economy. When they begin to be market players, then you get special interests. When special interests get involved, they tend to use your money for their own benefit. Taxpayer money is not to be spent to benefit an individual, but the nation. They have forgotten this fundamental rule. Politicians use your money to buy votes.
This post is about 10 months old; however, it has received a lot of comments, I will try to respond to them…
Mateo:
I have researched the Community Reinvestment act and that is certainly the fault of Democrats. When the Republicans had the presidency and majorities in the House and the Senate they could have modified or removed this act; however, they left it as is.
Once again, it took both parties.
Mike
Mel:
I certainly agree with you! A lot of the fault is with the American people as well. No doubt about it.
Mike
There is plenty of blame to go around but if I had to pick somebody as the “most responsible” I would pick the Federal Reserve.
Their massive injection of liquidity into the financial system had to go somewhere. They were focused on inflation but continued to ignore our credit and asset bubbles.
And these clowns want more power now - that is the worst possible thing the administration could do…
Steve,
I certainly agree that the credit rating agencies contributed to the problem. Furthermore many Federal regulatory agencies completely failed as well…
Mike
Ted,
I agree with you that the Republicans share a lot of the blame, they could have fixed many things and chose not too.
Your comments about the debt are wrong. Both Democrats and Republican controlled congresses keep adding to the debt. Congress determines the budget not the sitting President.
Mike
Honest Abe & Mike
Abe, who controlled both houses and the White House in 2005? When Bush and the Rep wanted something they managed to ram it through. The Rep majority could have called any Act out of committee in 2005, since they didn’t, they obviously didn’t think it was important. More then likely, those Rep bankers that were getting rich, told them to shut it down. When ever anyone mentions Clinton welfare reforms, the Rep leap up and say it was a Rep congress. And you are right. NOW, leap up and say it was a Rep congress that sat on their hands and did nothing.
Mike
The pres usually gets pretty much what he wants. He can always veto, as Bush did on numerous occasions.
As of July 16, 2009 the national debt was $11,579,428,713,952.50 this is up from September 30, 2008 (fiscal year 2009) of $9,575,181,268,036.06.
This means the deficit for 2009 for the first 9 months is $1,554,703,817,040. My question is where do they get only $1 Trillion from? The 2009 deficit if all the stimulus money is spent prior to Oct 1, 2009 will be very close to $3 Trillion. The deficit for 2008 was
$1,017,071,524,650.
The last surplus was in 1957.
Year National Debt Surplus/(deficit)
1938 $37,164,740,315 $(740,126,583)
1939 $40,439,532,411 $(3,274,792,096)
1940 $42,967,531,038 $(2,527,998,627)
1941 $48,961,443,536 $(5,993,912,498)
1942 $72,422,445,116 $(23,461,001,581)
1943 $136,696,090,330 $(64,273,645,214)
1944 $201,003,387,221 $(64,307,296,891)
1945 $258,682,187,410 $(57,678,800,189)
1946 $269,422,099,173 $(10,739,911,763)
1947 $258,286,383,109 $11,135,716,065
1948 $252,292,246,513 $5,994,136,596
1949 $252,770,359,860 $(478,113,347)
1950 $257,357,352,351 $(4,586,992,491)
1951 $255,221,976,815 $2,135,375,536
1952 $259,105,178,785 $(3,883,201,971)
1953 $266,071,061,639 $(6,965,882,853)
1954 $271,259,599,108 $(5,188,537,470)
1955 $274,374,222,803 $(3,114,623,694)
1956 $272,750,813,649 $1,623,409,153
1957 $270,527,171,896 $2,223,641,753
1958 $276,343,217,746 $(5,816,045,849)
1959 $284,705,907,078 $(8,362,689,332)
1960 $286,330,760,848 $(1,624,853,770)
1961 $288,970,938,610 $(2,640,177,762)
1962 $298,200,822,721 $(9,229,884,111)
1963 $305,859,632,996 $(7,658,810,276)
1964 $311,712,899,257 $(5,853,266,261)
1965 $317,273,898,984 $(5,560,999,726)
1966 $319,907,087,795 $(2,633,188,812)
1967 $326,220,937,795 $(6,313,849,999)
1968 $347,578,406,426 $(21,357,468,631)
1969 $353,720,253,841 $(6,141,847,416)
1970 $370,918,706,950 $(17,198,453,109)
1971 $398,129,744,456 $(27,211,037,506)
1972 $427,260,460,941 $(29,130,716,485)
1973 $458,141,605,312 $(30,881,144,372)
1974 $475,059,815,732 $(16,918,210,419)
1975 $533,189,000,000 $(58,129,184,268)
1976 $620,433,000,000 $(87,244,000,000)
1977 $698,840,000,000 $(78,407,000,000)
1978 $771,544,000,000 $(72,704,000,000)
1979 $826,519,000,000 $(54,975,000,000)
1980 $907,701,000,000 $(81,182,000,000)
1981 $997,855,000,000 $(90,154,000,000)
1982 $1,142,034,000,000 $(144,179,000,000)
1983 $1,377,210,000,000 $(235,176,000,000)
1984 $1,572,266,000,000 $(195,056,000,000)
1985 $1,823,103,000,000 $(250,837,000,000)
1986 $2,125,302,616,658 $(302,199,616,658)
1987 $2,350,276,890,953 $(224,974,274,295)
1988 $2,602,337,712,041 $(252,060,821,088)
1989 $2,857,430,960,187 $(255,093,248,146)
1990 $3,233,313,451,777 $(375,882,491,590)
1991 $3,665,303,351,697 $(431,989,899,920)
1992 $4,064,620,655,522 $(399,317,303,825)
1993 $4,411,488,883,139 $(346,868,227,618)
1994 $4,692,749,910,013 $(281,261,026,874)
1995 $4,973,982,900,709 $(281,232,990,696)
1996 $5,224,810,939,136 $(250,828,038,426)
1997 $5,413,146,011,397 $(188,335,072,262)
1998 $5,526,193,008,898 $(113,046,997,500)
1999 $5,656,270,901,615 $(130,077,892,718)
2000 $5,674,178,209,887 $(17,907,308,271)
2001 $5,807,463,412,200 $(133,285,202,313)
2002 $6,228,235,965,597 $(420,772,553,397)
2003 $6,783,231,062,744 $(554,995,097,146)
2004 $7,379,052,696,330 $(595,821,633,587)
2005 $7,932,709,661,724 $(553,656,965,393)
2006 $8,506,973,899,215 $(574,264,237,492)
2007 $9,007,653,372,262 $(500,679,473,047)
2008 $9,575,181,268,036 $(567,527,895,774)
Note from 1981 forward, who was president when the deficits increased? Rep “conservatives”, LMAO. Now, total them up for each president and you will see why we are in the financial sewer.
Cutting taxes is good. But, not if you are going to borrow money to replace the taxes. Trickle down is BS. If you cut taxes, YOU HAVE TO CUT SPENDING.
Ted,
Everytime someone puts out information which supports Mike’s original contention that both parties hold much blame for our fiscal mess you come back and imply that they are trying to blame it all on the Democrats. At the same time, you seem to be trying to convince us that the Democrats themselves actually hold little responsibility for this mess. This is just ridiculous.
Nearly all members of our federal government spend our money recklessly for their special pet projects. We do not NEED to have as much military power as nearly the rest of the world combined, but Republicans seem to think we do. And we we do not NEED to ensure that lazy people enjoy the same lifestyle that hard-working Americans do, but Democrats seem to think this is so. Of course, The past year has proven that both parties fully support extravagant corporate welfare.
The way it should work is the Democrats say to the Republicans “Hey, why don’t you scale back some of that extravagant (so called) defense spending?” And the Republicans should respond by saying “Okay, but only if you scale back your extravagant social welfare programs.”
The way it actually works is both sides simply say “Hey, I’ll support your extravagances if you’ll support mine.” A deal is struck, Congress goes to the bank of China for the loan, and we the people end up further in debt. Now, we the people should put an end to this by voting out all the fiscally irresponsible members of either party, but the truth is we are too easily fooled.
Suppose I go to the store and come back with a $10 gift for you. You are thrilled, and I’m your new best buddy. Only later do you realize that I took a $100 bill out of your wallet to pay for the gift. And I bought similar gifts for nine other people while I was there, so you have no change coming back. Now your stuck with a $10 “gift” that actually $100. Are you ever going to let me handle your wallet again?
That’s exactly what we are doing with our Congress and Presidents. After they all repeatedly prove to us that they are wasting our money, we continue to vote for them based soley upon which bright and shiny capital letter is printed next to their name.
Our budget woes are do to politicians selling ideas to the public. Rx drugs for seniors was sold to the public by saying seniors needed help. Great, but who paid for it? It is the same concept Phyl Marx put fourth. The government has no money. It produces nothing. It is nothing more than the mafia running a protection racket. In this case they are protecting seniors by extorting taxes from the workers.
There is no free lunch. Most politicians buy votes using other peoples money. Even Mark Souder says if he did not seek earmarks, NE Indiana would not get is “fair” share of federal funds. This is no different than a all-you-can-eat buffet. Everyone wants to get their money’s worth.
Now with healthcare legislation being debated, does anyone really think this will reduce cost? 50 million Americans without insurance. This means they are under 65 and not eligible for Medicare. If you simply reduced Medicare by 25%, you could cover all 50 million uninsured. the uninsured in most cases pay payroll taxes (Medicare). In my book, you have to be able to take care of yourself, before you can even contemplate helping someone else.
Those 65 and over represent 13% of the population, yet consume 37% of the healthcare dollars in the US. What started out as a noble effort to help seniors has turned into an all-you-can-consume buffet.
With the National debt at $11.5 trillion and interest rates will rise back to 5%. If we are truly lucky, they will stop at 5%. However, I think they will rise far more. This means that they will borrow money to pay the interest on the current debt (>$550 billion a year) while adding trillions more to the debt.
Unlike the depression, the only thing government did was provide for defense. How hard will it be to pay down the debt when you include 15.3% for Social Security and Medicare (was only 2% up till 1950), Medicaid did exist nor did the interstate, FAA and a host of other agencies and programs. WWII debt was paid down quickly because the federal government was mush leaner. It is now bloated and to pay down the debt as they did after WWII would require a 100% tax.
Have a great morning.
Someone should run for office and simply put the words “social security” with a circle and a line through it.
@Keith -
Yes, axe Social Security indeed. I’m sure that will go over tremendously well with all the seniors who count on receiving their social security check in the mail each month.
Its too bad Bush didn’t get his wish to privatize social security. I’m sure a lot of the Investment brokers and firms were licking their chops hoping social security would have been privatized. Just think of how much money could have been made by these firms/brokers in fees/charges if seniors would have handed over their social security accounts for them to “invest”. Thankfully, the privatization of social security did NOT happen, or we would have been in a worse predicament than we currently have. Nothing like living on a fixed income and seeing your social security check drop in value each month right along with the Dow Jones.
In fact, campaign on wiping out two federal programs while you are at it: Social Security and Medicare.
I KNOW the seniors absolutely hate that god- awful, socialized medicine program entitled MEDICARE.
One big problem people fail to recognize is seniors are the largest voting block in this country, and they DO show up at the polls. At the moment, the first round of baby boomers are getting set to retire, and the majority of them are COUNTING on obtaining their health insurance through socialized medicine: MEDICARE.
Try obtaining health insurance in the private market right now if you are 55 yrs of age or more. If you are lucky, you will have a monthly premium under $ 400 bucks, provided you bump up your deductible to around $2500/yr (maybe even $5000/yr). Forget about having dental or vision with that, as that would add more cost to your monthly premium. Better not have any “pre-existing” conditions either - that will cost you big time. The fact is these private health premiums are only going to continue to rise as more and more people head towards retirement. All the while, most of the top CEO’s of our nation’s private insurers earned outrageous salaries (AETNA’S CEO - Ronald Williams: 23 Million in 07, CIGNA’s CEO - H. Edward Hanaway: 25.8 Million in 07). Life’s good if you are at the top eh ??
Yes, I know, we are conditioned to believe socialized medicine (MEDICARE) is evil and bad. I wonder why some of the big private insurance companies want us to feel this way ? Could it be rather than providing a needed service for people, the healthcare industry has turned into a mega profitable industry that involves jacking up Americans’ premiums on a regular basis and denying claims based on bogus pre-existing conditions or some other insane excuse ?
Here’s a challenge for you. Go out on the street and ask as many seniors as you meet if they would be willing to give up their “socialized” medicine: Medicare. I’ll bet you’ll be hard pressed to find one senior out of one hundred (if even that) who would be willing to give up their Medicare insurance and pay privately through a private insurance company.
Then tell these seniors you are running for public office and intend to eliminate both social security and Medicare. I predict you’ll be a huge hit in the over 65 crowd.
“One big problem people fail to recognize is seniors are the largest voting block in this country”
Not quite the largest, in fact the potential voters under age 46 out number baby boomers and seniors combined by over 10%! Seniors age 65 and over number around 40 million.
If you were born after 1985 the best you can do from SS is 29 cents back for each dollar you paid in plus interest at the US Treasury rate. Not a very good deal. Now if you were born prior to 1938, they get more than $1 back for every dollar plus interest at the US Treasury rate. If you were born prior to 1924, you are getting more than $4.24 back and if you were married with a non workings spouse increase this by about 50%.
As for Medicare, let’s take a look at cost.
Age Group 1999
0-18 $1,646.0
19-44 $2,706.0
45-54 $3,713.0
55-64 $5,590.0
65-74 $8,167.0
75-84 $12,244.0
85 and older $20,001.0
In simple terms those who have no insurance are paying for Medicare. For some reason this is the cart before the horse. Just look at the cost to the worker for Medicare. $20,001 in 1999 is now over $25,000 for one senior age 85 and over. The payroll tax is 2.9% on all wages. Do you really think this is the correct payroll tax? Now count the Rx Program. How many seniors paid additional tax to pay for this while they were working?
To put it in terms most people know and hate, Bernie Madoff. He promised great returns for a small investment. It worked well until those depositing money were out weighed by those withdrawing money. SS and Medicare were able to pay great returns while few were eligible to collect. An 18 year old will take 49 years before full retirement age for SS and 47 years for Medicare. This is a long time to use their money to pay those who reached eligibility earlier. the only difference is our politicians bought senior votes using our money and raised the payroll tax from 2% in 1937 to 10.6% today, added SS-DI in 1957 for another 1.8% and Medicare in 1965 for a payroll tax of 2.9% on all income. The secret to a good ponzi scheme is to start out small, let them bite and take the bate. Once you got them, hank yard so that they feel the pain so they cannot determine what the right thing to do is and that is to let go and take the loss.
Now let us take a look at cutting healthcare costs. This means engineers and workers in pharmasutical industries will have to have their wage and benefits cut, Mutual funds will earn less return on investments, Doctors will have to cut their incomes by 50 to 60%, no longer making $180K, but $80 to $90K as in England, Germany and Switzerland and less in Canada. The sad truth is we are not born equal when it comes to genetics. We are not all born equal when it comes to learning capacity, creativity, imagination and resourcefulness. The only way to add 50 million people to the healthcare sector without spending more is to cut the costs paid to providers. Nurses, technicians, clerks and everyone in the healthcare network will have to be compensated less. But then maybe you do not think you are paying enough now for healthcare. Maybe you have $10K a year extra and are generious enough to give this to charity so that those less fortunate may have the funds needed for healthcare?
The bottom line everyone must ask themselves is, how much more are you willing to pay for healthcare? Is it $5000 more a year? If you are not willing to pay more, then you must be willing to use less? What are you willing to do without? In Canada if you are over a particular age, they deem some procedures not useful and they are not covered.
Being an unfortunate to be in the wrong place at the wrong time, I am part of the VA network, I have a good idea of what national Healthcare would be like. You will not like it at all!!!
I speak to the young and try to energize them to take part in the political process. The young outnumber the seniors and baby boomers combined. How many young workers like paying SS and Medicare taxes? Ask a few if they would rather give up all claims to SS and Medicare in exchange for keeping their 15.3% payroll tax? What do you think their answer will be? On one hand they keep $4,590 a year or pay this so they can compete for healthcare with seniors who are using their money to bid up the cost?
I guess Andy’s family tree is lacking the sarcasm detection gene.
As one senior citizen who is being taken care of by the federal medicare system( and is drawing social security) - I am opposed to it big time - It is the biggest waste of money our government has ever engaged in!!!
In the first place, our co-pay of $15.00 for a doctor visit and $100.00 for a visait to the emmergency room DOES NOT encourage financially capable seniors to avoid a visit for every dumb hangnail and other things we avoided seeing a doctor(or today even a specialist!)for when we had our own “major medical” health insurance plan paid foir by our employer!
Yes,Andy, a $2500.00 deductable policy to take care of the serious medical cases does make sense for seniors who planned ahead. IT DOES NOT MAKE SENSE FOR THOSE WHO FEEL THAT THE REST OF THE WORLD OWES THEM EVERYTHING JUST BECAUSE THEY HAVE LIVED SO LONG!!!
My wife signed me up for AARP when I turned 50 some 23-1/2 years ago. After I read their propaganda, I quickly cancelled my membership - NO WAY was I going to contribute to an organization that wanted our county to go socialistic like they desire!
And, Andy, why don’t you try to take a poll of elders who are responsible, conservative, yes even penny-pinching citizens to really see how they feel about this monstrosity that our president is attempting to saddle us with??
You will be suprized at the results!
Plus, Andy, IT’S THE STUPID PEOPLE THAT THIS CONTRY ELECTED TO REPRESENT US IN WASHINGTON WHO CREATED THE FINANCIAL DIFICULTIES OF THE LAST YEAR! Don’t blame the captains of industry who are the only people who will get us out of this mess!!
The 1930’s results of the New Deal DID NOT correct the economy then and the Obama RUSH TO ILLIQUIDITY will not do it either!
Keith Cumtwa wrote “Someone should run for office and simply put the words “social security” with a circle and a line through it.”
Andy replied with “Thankfully, the privatization of social security did NOT happen, or we would have been in a worse predicament than we currently have. Nothing like living on a fixed income and seeing your social security check drop in value each month right along with the Dow Jones.”
Andy does not see the cause and effect of SS on our economy in terms of standard of living, wages, savings and national debt. He is looking at what seniors get only. The fact is the median income of a senior is $85,000 a year (includes capital gains). This means 50% of seniors have this much income. Do you know how much in investments you need to produce this? Excluding pension and SS, the median income drops to just a tad over $50,000 a year. This is more than the median income of a family of four.
Now my dad paid the maximum into SS his entire working life. Pretty simple to determine how much in total SS-OASI dollars were paid and because the SSA identifies the Interest paid for each one of these years, it is also very simple to calculate what his theoretical balance would have been when he retired at age 62. My mom did not work so she received a benefit equal to 50% of my dad’s (non working spousal benefit). My dad paid 2/3rds of his total SS-OASI contributions in the last three years he worked. Not difficult to do since the max tax was just $30 up till 1950 and then went to $45 a year. It did not reach much until the mid 80’s when the tax and based were substantially increased. The bottom line is based on my dad’s benefit; he would have exhausted his theoretical balance after just seven years. When you include my mom’s benefit, it is exhausted two years sooner. The problem is the 62 year old has a life expectancy of 17 years. How do you pay a benefit that is four times more generous? The answer is you cannot for very long.
We have now reached the point between the rock and the hard place. Do we raise the payroll tax and reduce the ability of families to save for retirement, buy a house, pay for healthcare, pay for college and more or do we cut SS benefits? There simply is no free lunch, but Obama and nearly every republican and democrat thinks there can be.
I would definitely support anyone who “ran for office who simply put the words “social security” with a circle and a line through it.” I think it is a great idea. You could also add “budget deficits” and “ear marks” to the circle to name two more. By no means am I implying there are only three valid ones. Here is another “politicians.” This is coming from a person who is 53 and who is sick and tired of being asked to pay more for SS every time it needs fixed. SS is an addiction and needs to be treated as such.
no one blames the whole society that leads to ecomomy crisis inevitable.