Disinherited

Subheading of the book being ‘How Washington Is Betraying America’s Young’ and Part I is on “Unfunded Promises” and “Paying for Parents’ Health Care”.

Excerpts follow:

At the state level, runaway pension plans for public-sector employees pose a serious threat to state budgets. As well-connected public-sector unions fight against any changes to generous pensions, it is the poorly represented taxpayers, the young people just starting their careers or those who cannot yet vote, who will end up footing the bill. (page 13)

“The American body politic has acquired deficit-attention-disorder.” Christopher Demuth (page 17)

By the end o f2013, total [Social Security] beneficiaries amounted to 58 million….[and] cost $808 billion……[Medicare] enrolled 52 million and cost $583 billion. (pages 20-21)

The Medicare Modernization Act of 2003 requires that the Boards of Trustees determine each year whether the annual deficit exceeds 45 percent of total Medicare costs in any of the first seven fiscal years of the 75-year projection period. If it does exceed 45 percent, then they must include a report on “excess general-revenue Medicare funding.” If two of these reports are required consecutively, then there is a “Medicare funding warning” that forces the president to respond to the overrun by proposing legislation within 15 days of the next budget submission. Congress is then required to consider the proposal with priority. So far, Washington has not responded to the funding warnings that have been a part of seven of the last eight reports. Politicians are breaking their own law. Again, Washington does nothing and then wonders why our fiscal position is deteriorating.  Washington did pass a law constraining Medicare’s growth. reimbursements to Medicare physicians are supposed to be trimmed whenever Medicare exceeds a pre-set growth rate. But Washington repeatedly repeals the proposed cuts to Medicare physicians. If it failed to do so, no doctor would participate in Medicare. (pages 21-22)

States hold an additional $5 trillion in liability, of which $4.4 trillion represents debt for pensions and other post-employment benefits. This does not even include the pension or capital-market debt of cities, counties, and other local government entities.  (pages 22-23)

Using a discount rate that represents actual returns makes plans’ fiscal conditions look worse, but showing an accurate picture of funding levels is something that benefits all stakeholders – public-sector workers, retirees, elected officials, and taxpayers. How can policymakers achieve their goals if they do not have a clear picture of what is going on? In other words, lying with numbers does no favors for anyone. (page 25)

Since insurance companies are not allowed to charge older people more than three times as much as younger people (a provision known as “modified community rate”), the law artificially holds down the premiums of older people and raises the price for the young. (page 31)

 

17 responses to this post.

  1. Posted by Eric on May 5, 2016 at 8:48 am

    John:
    If we did not fight, and continue to fight, all of these costly, senseless wars around the world, at the behest of the globalists, like the “bought and paid for” Hillary, and the rest of the elite establishment, we could have easily funded medicare, social security and pensions.
    Obviously, the “powers that be” do not view these programs, to which taxpayers and workers have contributed to, and partially funded, worthy or important enough to sustain them in their current form.
    The error in the math regarding this story is that the young people will have the means and the will to fund them. There are no more middle class jobs, paying a living wage, for the young. This is why they are living in their parents’ basements with school loans that are no longer able to be discharged in bankruptcy court.
    Eric

    Reply

  2. i have observed the greed and hoarding of wealth by older people, probably traumatized from the depression. but sacrificing their children and grand children is not a right response.

    most families do not help their children at all. instead, they stash and hoard their money in a 401k. its sick.

    Reply

    • Posted by dentss dunnigan on May 5, 2016 at 10:25 am

      I think your wrong on that most older people don’t help their kids ,My family has done without from day one when my kids were born by doing with I mean never buying a new car or latest TV (my first in1980) always doing my own home repairs to this day i still mow my own lawn ..I made sure my kids education was paid for never took out a college loan for any of my 3 kids ..and to this day I pay for one’s masters …Of course Obama’s debt forgiveness makes me look foolish ,by proud .On top of all that I funded my 401K never has a pension .My biggest expense now is property tax ,and why I still stay here is a mistery to my 3 kids ,who have said they will never move back despite all the great memories .

      Reply

      • Posted by Anonymous on May 5, 2016 at 10:31 am

        Amen….
        Rule #1… don’t not fund your retirement savings at the expense of your childrens education/non emergency expenses. You will be more of a burden on them if you can’t afford your bills when they have a family of their own.
        Absent an emergency your retirement should come first….

        Reply

      • it would be very good for individuals to understand that not everyone is like them.

        most people ARE hoarding their wealth. you might not know them, but they are and they do.

        please send good thoughts to people whose families are not like yours and be thankful for yours

        but please do not deny that there are many many suffering

        Reply

    • Posted by luke ustaszewski on May 5, 2016 at 12:41 pm

      Totally disagree. I know I paid for my daughter’s college and plan to pay for her grad program as well. we paid for her home down payment and pay about half of her expenses becuase her job won’t cover them and she is single and alone. if this is not the norm then shame on the rest of the parents who can afford to help their children, but don’t. This above column is just more right wing prpaganda to help the rich keep all of their wealth. The top tax rate needs to go back to 60% federally, then everything will balance out. Programs will be affordable and infrastructure will be repaired and jobs plentiful.

      Reply

      • Sounds like Luke plans on receiving a juicy pension.

        Reply

      • Posted by dentss dunnigan on May 5, 2016 at 4:20 pm

        Luke when the top tax rate was 60% most states had no or very low state tax rates ,no or low sales tax ,property tax was .05 or 1% of property values not 2.75% on very high home prices ….I won’t even mention Obamcare …

        Reply

  3. “Since insurance companies are not allowed to charge older people more than three times as much as younger people (a provision known as “modified community rate”), the law artificially holds down the premiums of older people and raises the price for the young. (page 31)”

    Actually, based on data I have seen the three times rule is quite reasonable for those under age 65. But the rule is not described correctly. It is a maximum of three times. States have the option to set the rate no higher for those in late middle age than for the young. One state has done so. Guess which?

    https://larrylittlefield.wordpress.com/2013/11/23/new-york-government-of-by-and-exclusively-for-todays-seniors-leaving-nothing-for-those-coming-after/

    Those on the right want to “fight for the young” by forcing them to accept lower senior benefits, while those on the left “fight for the young” by forcing them to pay higher taxes. It’s all a show, a fraud by Generation Greed.

    Reply

    • Posted by george on May 5, 2016 at 12:53 pm

      Medical care is a highly regulated market. So what you end up with is consumers, like the elderly, being forced to pay for monopolies, work rules, and regulations that they do not benefit from and eventually the government transferring wealth to the elderly to pay for it all. There is no reason for medical care to cost as much as it does in the US, especially as compared to other countries.

      One beneficiary of government regulators is the most young workers in the health care field, one of the last large employers in the US that pays a living wage.

      Reply

      • “There is no reason for medical care to cost as much as it does in the US, especially as compared to other countries.”

        It isn’t a good reason, but there is a reason. Sex and death.

        Since I’m off cable and watch over the air broadcasting, I find it amazing how many commercials there are promising to “make you the man (or woman) you used to be.” As if aging doesn’t have to mean aches, pains, limitations, and the loss of expectations about sex with women in their 20s.

        And those without perspective fear death, even after a long life. Better to live on as suffering undead as long as possible. Maybe that’s why there are so many zombie movies.

        These factors allow the health care sector to sell, sell, sell what in the long run it cannot deliver. Look at the pyramids, the quest for the “fountain of youth,” and all the resources spent on aphrodisiacs over the centuries to see the desire for youth, sex, immortality. If others are paying, all the better.

        Reply

  4. Posted by S Moderation Douglas on May 5, 2016 at 1:55 pm

    Very busy lady. She has model legislation to “Solve the pension crisis.”

    “Authority for such a federal law comes from the Constitution, which gives Congress the power to enact “uniform laws on the subject of bankruptcies throughout the United States”

    Only this legislation does not give states the right to file bankruptcy (which could result in losses to bondholders) it only affects pension costs:

    “This proposed legislation would involve only pension debt, and not the entire debt of the state. In the past, the U.S. Supreme Court ruled that it is not necessary to have identical treatment for every class of creditor.”

    And:

    “yes, pensions to current and future retirees could be affected, depending on how the state legislature wants to reform the system.”

    But don’t worry, it’s not arbitrary

    “States would be authorized to enact pension benefit changes only after determining that funding obligations damage the performance of essential state services.”

    Retirees, you WILL have a fair trial before you are shot!!!

    “America’s Young” should be very pleased, for now. But remember:

    “First they came for the Socialists, and I did not speak out—
    Because I was not a Socialist.”

    Then they came for ….you?

    Reply

  5. Posted by S Moderation Douglas on May 5, 2016 at 10:38 pm

    ARE MILLENNIALS THE SCREWED GENERATION?

    BY JOEL KOTKIN ON 7/16/12,  Newsweek

    “Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”
    ________________________________
    And, my favorite quote:

    “…….prospects for improvement are dismal for the younger generation.

    One key reason: their indebted parents are not leaving their jobs, forcing younger people to put careers on hold. Since 2008 the percentage of the workforce under 25 has dropped 13.2 percent, according to the Bureau of Labor Statistics, while that of people over 55 has risen by 7.6 percent.”

    So why does seemingly everyone want to ….increase… retirement age? According to Gallup, in the early 1990s the average retirement age was 57 in both 1991 and 1993. From 2002 through 2012, the average hovered around 60. Over the past two years, the average age at which Americans report retiring has increased to 62. (And still rising.)
    ______________________________

    Why don’t we put these superannuated folk out to pasture and give the millennials the reins?

    Reply

  6. Posted by MJ on May 6, 2016 at 9:03 am

    Nothing new here folks, same story….way too much promised to way too many without any way to pay for it due to not making the appropriate actuarial changes and putting limits on what Medicare will pay for……85 year olds getting hip and knee replacements? Collecting SS for 30 years or more?? Less younger workers, salaries are stagnant, economy is limited, more needy people….adult children putting parents in nursing homes because they can’t afford to be home with them all at Medicaid expense…….do we need all these smart experts writing books to tell us how it will turn out?

    Reply

  7. Posted by lFor fairness on May 6, 2016 at 12:31 pm

    The cuts in government employment and infrastructure improvements due to the Reagan and Bush tax cuts to the top tax margins have reduced employment by government and construction which has left the middle class to struggle to find a job and has left them unable to afford to spend the money that used to be spent throughout the economy. and they have starved government so that they cannot afford to fund pensions, infrastructure improvements or any of the needs of the people. I am not sure if these were intended or unintended consequences of the conservative movement, but they are certainly the consequences of it. Their motto was always starve the beast, so maybe they knew exactly what they were doing.

    Reply

  8. Posted by summer on May 6, 2016 at 12:44 pm

    don’t forget the 30% tax cut from Whitman which started the slippery slope of not funding pensions. While she and husband and wealthy friend got massive breaks. the average person got 50 bucks.

    Reply

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