Sunday, August 11, 2013
Random ruminations from your resident curmudgeon...
Presented without comment for your consideration:
The U.S. Post Office has to come up with $5.6 billion to pay for its share of health and retirement benefits for its employees. According to Post Office officials, they will be unable to make this payment. The Post Office also defaulted on an $11.1 billion payment for 2011/12.
According to the Congressional Budget Office, the Highway and Surface Transportation Trust Fund, into which our gasoline taxes flow, is spending well more than it takes in in tax revenue and will have insufficient resources to meet its obligations. In fact, the Trust Fund has been broke since 2008. It avoided a default on its obligations by a transfer authorized by Congress from the General Fund to the tune of $51 billion. The situation will get critical again within the next 14 months.
The Social Security Disability Trust Fund is running out of money quickly, and considering there are now over 11 million people receiving Disability Income payments, this is huge. In October 2014, if nothing is done, those receiving DI will face an automatic 25% cut. So far, Congress has not addressed this problem.
The Federal Budget is due October 1. Most likely, there will be a continuing resolution passed by Congress to keep the government running. If so, this will be the 5th year that Congress and the White House have failed to pass a budget.
The debt ceiling will be reached in mid October. Expect nothing to be done and the debt ceiling to be extended.
Entitlement programs continue to spend significantly more than they take in. Congress has not shown a willingness to address meaningful reform. Every month that goes by without constructive measures to effectively make these programs self sustaining means that the solution will be even more painful.
Doctors say there are now 7 million people overweight, but that is just a round number.
A new study by University of California-San Diego economics professor James Hamilton finds that our country has $70 trillion in off balance sheet liabilities. That amount is nearly 6 times the on balance sheet deficit of $16.74 trillion. Where does that amount come from? According to Hamilton, it comes from mortgage guarantees, other loan guarantees, and future obligations under Medicare and Social Security. And that number may be optimistic. According to Boston University economics professor Laurence Kotlikoff, who served on president Ronald Reagan's Council of Economic Advisors, the off balance sheet number is actually closer to $211 trillion. Kotlikoff factors in the total expected payments under our existing entitlement programs as well as defense spending and promises to pay for other programs to arrive at his number. Either way, the numbers are staggering and represent an economic predicament that is going to be extremely difficult to resolve.
I have a friend that is a fisherman who cannot fish because he suffered an injury. He pulled a mussel.
Immigration reform continues to be debated in Washington, and it remains to be seen what final version may emerge from the bowels of our legislature. But here is something to keep in mind. Homeland Security reports that their department has lost track of more than 1 million immigrants that they know entered the country but cannot prove they have left the country. Washington does track who has entered the country, and in 1996, a law was passed that established an entry/exit tracking system. 17 years later, the system is not in place- at least an effective operating system- and those immigrants are now "lost'. The original law established that biometric identifiers such as fingerprints were to be used to track those coming and going through our borders. for some reason we still cannot get this system in place and working. Effective immigration reform and systems that work in keeping track of those immigrants inside our border is essential to our national security and economic well being. And Washington is failing to provide those effective systems.
My first job was at an origami plant, but it folded.
And that, my friends, is my view.