Friday, October 4, 2013
Random ruminations from your resident curmudgeon...
The government shutdown has produced scads of angry rhetoric from both sides of the ideological spectrum, and has accentuated some of the worst aspects of those in Washington. While we can argue and debate the pros and cons of the position each side has taken, there is one aspect to this brouhaha that has caught my attention and has made me angry. The administration closed the World War II Veterans Memorial in Washington because, even though it was mostly built with private donations, it is managed by the National Park Service. Barricades ("Barry-cades") were erected around the open air memorial (yes, it is out in the open- there are no buildings to close) even though the administration knew that Honor Flight tours of World War II veterans were scheduled to attend. An Honor Flight tour of veterans, with the help of some Republican Congressmen, pushed aside the barry-cades for a group on the 2nd of October and allowed these distinguished veterans to have their time at the memorial. The next day, two Honor Flight tours, one from Missouri and one from Chicago, came to the memorial, where they were confronted by "protesters" that heckled them while they were at the site. The "protesters" claimed to be furloughed government employees demanding the government re-open so they could go back to work. In reality, they were members of the Service Employees International Union (SEIU) that were paid $15 per hour to harass these heroes as they made their tour. John Hinderaker of the acclaimed Power Line blog filmed the protest, and when he asked the participants to produce their federal I.D., they could not. Upon questioning the protesters further, they admitted they had been paid to come to the site and protest. You can read John's blog and watch the video here. Irrespective of your view on the government shutdown, this action typifies the pettiness and childishness of this administration and President Obama. Our country and our valiant veterans deserve so much more.
I have always wanted to be the last man on earth just to see if all those women were lying to me.
The Congressional Budget Office (CBO) recently released its report on the financial soundness of the Social Security program. According to the CBO, the long term outlook for the viability of this program has deteriorated substantially over the past 12 months. One contributing factor to this situation: we are all living longer. The CBO reported the obvious to Congress- that the longer we live, the more checks will have to be distributed. This is disastrous for this program, because a longer life span coupled with fewer people working and paying into the system means this program will run out money far more quickly than anyone in Washington has projected. The CBO concluded that one way to stave off insolvency of the program would be an "immediate and permanent" payroll tax increase of 3.4% (OUCH!). Last year, the CBO stated that a 1.9% tax increase would be necessary to keep the program afloat. The increase in taxes over just one year is 70% to keep Social Security alive. And it is only going to get worse. It is political- not to mention economic- suicide to push for that large of a tax increase. I would expect that in the coming months, we will begin to hear rumblings from Washington about a smaller tax increase coupled with raising the retirement age (again); means testing benefits; raising the cap on taxable earnings; and changing the cost of living adjustments. Any of these changes will have a dramatic impact on your wallet and on what you receive from the program. All of us would be wise to pay close attention to this issue.
Men are a lot like a box of chocolates. Wait to long to pick one, and only the weird, nutty ones are left.
Here is a heads up: the next crisis to emerge is in the federal student loan program. According to Department of Education, the national default rate on student loans for the prior two year period ending in 2011 rose from 9.1% to 10% In dollars, that means that the current amount of student loans in default is a staggering $146 billion. Student loan debt surpasses all forms of consumer borrowing except for mortgage debt. Our education policy in this country has been to encourage students to pursue a higher education (a great goal) at any cost (not so smart) including taking on a tremendous amount of student debt. With a job market that has cratered since 2008, those students that graduate are finding it difficult to land jobs that will allow them to pay their current living expenses and their student loan debt. Look for this trend of rising defaults to only get worse. And we all know who will eventually pay for this financial crisis.
I told my wife I was going for a walk last night. She asked how long I would be gone. I told her the whole time.
And that, my friends, is my view.