Federal Fiscal Follies – Part II
I wrote the other day about the ridiculous economic cost of Federal regulation – which is estimated by two different credible sources to exceed 10% of the US GDP by 2014 if it hasn’t already done so. Well, today I’ll be continuing that theme.
I’ve written previously about Federal entitlement programs – Social Security in particular. We now have more hard data showing exactly how such programs are slowly bankrupting the US. Figures for this year’s Social Security payments through the end of August 2012 are now available.
They’re not pretty.
For those who didn’t know or who’d forgotten: the Federal government’s financial (fiscal) year runs from 1 October to 30 September. That means we’re nearing the end of the current Federal fiscal year.
August data showed that the Federal government has already paid more than $594.64 billion to Social Security beneficiaries – with one month remaining in the current Federal fiscal year. Assuming Social Security payments for September are the average of the previous 11 months, that means the Federal government will transfer nearly $650 billion from wage earners to Social Security beneficiaries this fiscal year. That will be close to a 10% increase from last year’s nearly $591.5 billion in Social Security payments – which was the previous record high.
To put this in perspective: the DoD Base Budget request for fiscal 2012 was about $553 billion. Another $118 billion was requested by DoD to support overseas contingency operations. Yes, you read that right – this year, the Federal government will spend nearly as much on Social Security alone as it did on DoD. Given upcoming near-certain cuts to DoD’s budget next year and demographics, I’d guess we’ll probably see “crossover” next year.
August 2012 also marks the all-time high for the number of people receiving Social Security benefits – 56,291,797. Based on the current US population estimate of a bit under 317.5 million, this means close to 18% of the US population – or approaching 1 out of every 5 US residents – is currently receiving income transfer payments from Social Security alone. And remember: that percentage does not include those receiving income transfers from other Federal entitlement programs like AFDC, Medicare, Medicaid, subsidized housing, or other welfare programs.
And today I’m not even going to discuss all of the issues with Social Security. More to follow on that score – tomorrow.
But let’s take a moment to recap what we have so far. Government regulation costs the US economy around $1.8 trillion annually. Let’s assume 2/3 of that regulatory cost is unnecessary. Social Security takes roughly another $650 billion out of wage earner’s pockets. So that means between waste due to compliance with unnecessary Federal regulation and Social Security, the Federal government has is responsible for taking close to $2 trillion from those who earned it.
And that nearly $2 trillion total doesn’t include income taxes, sales taxes, property taxes, excise taxes, employer payroll taxes besides Social Security OASDI – or any other taxes. That’s only the income lost to wage earners due to Social Security plus the waste caused by unnecessary governmental regulation.
H. Ross Perot was wrong. That “giant sucking sound” you hear isn’t jobs going South. It’s the sound of the Federal government siphoning off 12.3% of the GDP between government-mandated waste and support for Social Security.
And the truly scary part? That’ nowhere near all that’s being siphoned away from those who earn it.
Category: Defense cuts, Economy, Politics
Wait…Al Gore told me social Security was in a lock box!
Virtual Insanity: I think he actually said it would put us in a locked box – six feet under. But I may have misunderstood him.
And, SS can’t ever go broke, it’s like an insurance policy.
Now, I’m gonna sit back and pop up some popcorn, and wait for Instupid to show up and call everyone racists and ignorant because we don’t agree with him.
Nice how the gov’t raided and spent $2.6 trillion from the Social Security Trust Fund – move on, nothing to see here folks.
What pisses me off about SS, is that I’ve been paying into it for over 35 years…I’m “vested” in it. I’ve paid a shit load of money into it…
However, I will not get my full amount back because I have another govt retirement (that I also had to pay into for many years).
Thanks to Reagan, he changed it so if you got another govt retirement (like he did) then you couldn’t get your full amount from SS. But, some asshole who never even worked, can take money out of it.
I’m in the process of trying to get my Social Security and VA Pension now. Unfortunately I bit the big one at age 48, after “only” working 31 years. The program is solid in it’s reasoning, you put in and when you get old or disabled you get something back. Unfortunately it’s been worked so too many people can manipulate the system and get benefits out. There is nno way in hell that 1 out of 5 Americans are so jacked up that they should rate social security. My extended family has 55 people in it, and only 2, aged 65 and 83, draw any benefits.The System is rife with people who immigrate and get benefits without working even 5 years. There are also those who draw disability based on bogus doctor claims, not to mention the outright fraudulent claims for dead relatives, etc.
Your posts are great.
well honey Ur hondo I’ll quit drawing my ss sorry sob that i am as soon as i can than all you heros can save all the don’t give a s—s all over the world with the money.
8- ????
CI–newsflash–I’ve never been a “government employee” aside from my time on AD (which ain’t the same pot of cash as civilian gov’t employees) and it’s a virtual certainty I’m not going to see anywhere near what I put into the system, let along what I AND MY EMPLOYERS have put into the system–money that I could have invested and fucking near retired on by now at a relatively young age.
And 8? Drunk posting–consider this an intervention. Stop. Just stop.
but, but everybody KNOWS defense spending caused all of the deficits and $16 trillion debt…..
/sarcasm off/
First off you have given zero “credible” sources. The one source is Competivie Enterprise Institute, an organization whose stated goal is to stop government regulations. There slogan is “Free Market and Limited Government”. http://cei.org/about-cei Using them as a “credible source” is like me quoting Al Jazera on an article about Israel. Plus, your second “source” the SBA is not standing by that number- nor can i find a record of them using the 1.8 trillion figure other than the CEI’s article. In fact CEI admits to pulling the 1.8 trillion number out of their ass in their own prospectus: ============================================================= A wave of assumptions and guesses without scholarly pretension underlie this tally, and all data and sources are subject to change at this author’s discretion. Estimates for existing and pending regulatory costs in future editions of Tip of the Costberg or in the annualTen Thousand Commandments aren’t merely subject to change, they are guaranteed to change at the discretion of the author and upon receipt of new information. ============================================================= This is the “credible source”? a source that admits to making guesses without scholarship? If you want to argue government regulations, that is fine. I’m happy with clean air, clean water and safer working conditions. I’m not sure how CEI arives at the 1.8 trillion but simply talking about the cost of regulations without talking about what the regulations are is just dishonest. As far as SS goes: for people who claim to love guns so much you Conservatives sure have crappy aim. Osama Bin Laden attacks us on 911 and you guys go after Sadam Hussein. A massive debt is caused mostly by 1. Bush tax cuts 2. a massive unnecessary war 3. a poorly fought war 4. An unpaid for medicare drug giveaway 5. the massive Bush systemic economic meltdown. 6. efforts to recover from the massive Bush Systemic economic meltdown. You know what HASN’T contributed to the debt at all? Social Security and Medicare. In fact, Social Security has been largely suplementing the military for all these years. So what do you want to do? You want to… Read more »
Credible by whose standards, sippy?
You? The same person who considers SS an “insurance” plan?
Stop. Hurt. Sides. Laughing.
By rational standards. The stated mission of CEI is to get rid of government regulations. I’m not making it up, i gave you the link.
You’re laughing because you have a mental deficiency. It’s been called an insurance plan for 70 years. Just because you can’t grasp the idea that government insurance operates in a different way than private insurance does not invalidate it being insurance.
What part of “limited government” do you fail to understand? I don’t think you’ll find a rational person here who is in favor of NO government. But then again, we find subservience to an all-powerful government to whom all flows and from whom all is given is just as abhorrent.
There’s another word for that–slavery. Thanks, but no.
And if it’s an “insurance” plan, sippy–where’s the guaranteed payout? I mean, even a whole life insurance plan guarantees payout at a certain age should I survive to said point.
So where does such a guarantee exist in SS? Please show me where I’m guaranteed ANYTHING.
There are 10s of millions of people whose entire existence depends on these program functioning.
Only because liberals and their policies have taken away any sense of self-reliance and responsibility away from them and created a false sense of security at the cost of their freedom.
Gee, what would have happened had SS and Medicare not come into being? Seniors dropping dead in the streets? Children starving to death?
Spare me the histrionics.
You’re not guaranteed a pay out if you don’t have a fire either. If you get old you get paid, if you get disabled you get paid. If you don’t get old and don’t get disabled you don’t get paid. But you still have the peace of mind knowing it’s there.
I mean, you guys want to run on getting rid of SS and Medicare, have at it. The idea of a permanent Democratic majority sounds good to me.
@16= You REALLY need to pick up a history book, sparky. Elderly dying in the streets was exactly the conditions that existed prior to SS. Even Medicare cut elderly poverty in half. These programs were not forced down people throat. They were demanded by the public because the old system was not working.
And the security is not “false” it’s been paying out for 70 years. The actual false “security” has been private pension funds.
Sorry, but I don’t recall “peace of mind” being part of the fucking equation either, sippy.
And guess what? Elderly are dying in the streets today. So are the young and everyone in between. Welcome to the cycle of life. Not everyone gets to reach three score and ten, not everyone gets to retire a millionaire like the old board game of LIFE. Now really, should I feel badly for someone who sat on their asses and expect the rest of us to provide for them not only if they can’t, but they won’t? What’s also happening is a HUGE number of people ABUSING the system. People drawing SS Disability because they want to sit around the house and shit in adult diapers all day while they call some bitch in a leather nightie and a whip “mommy.” Is that was SS was created for, sippy?
Last month the workforce increased by 96,000 jobs. Whoop-de-fuckin-do. At the same time, 368,000 QUIT LOOKING. A lot of those people (over 150,000) went on SS disability–meaning they chose not to be productive members of society anymore. Let me say that again:
THEY CHOSE NOT TO BE PRODUCTIVE MEMBERS OF SOCIETY ANY MORE. THEY QUIT. THEY GAVE UP. This is what your beloved Obumbles has created…a huge dependent class which produces nothing, but demands subsistence from the backs of others.
How long is such a system sustainable when fewer and fewer produce, and more and more suck at the teat of welfare and redistribution? Well, give credit to the Soviets, they managed to hold on for about 70 years before they went tits up. Then again, similar programs (Social Security) have been in place nearly as long, and Medicare is rapidly approaching the half-century mark. So if Medicare hits 70 years in 2035, SS/Medicare is projected to go bankrupt about then…yup, right on fucking schedule.
I’d be kind of curious as to those people who were “demanding” SS and Medicare how they’d view their creation today. Bit of Frankenstein’s monster, no?
All government regulation is good, and super necessary, and should be handled at the federal level, because the people cannot be trusted with the power over such things. Any ratio of voters per representative better than 1: 700,000 is subversive to democracy.
This is what I see every time insipid posts something.
Speaking of regulation, insipid, how about those Dodd/Frank reforms? Pretty awesome, huh? They certainly prevented that MF Global meltdown. Stopped that Republican scumbag Corzine from bankrupting all of those retirement accounts that MF was managing. Yessir, that was some seriously needed and non-costly federal regulation right there.
Well, I see Sippy the Pinhead finally found this article. I was wondering how long that would take. Denying facts don’t change them, Sippy. Give it up regarding the “no credible estimates” BS. You may not like the CEI. However, whether you like them or not – or what their stated purpose in life might be – is irrelevant as to whether or not their estimate is credible. In fact, their estimate for total cost of Federal regulation agrees very well with a recent estimate produced by the Federal government itself regarding that same cost. Specifically, it agrees within 6% with an estimate for government regulatory cost produced by the Small Business Administration ($1.7 trillion annually – and it’s not clear whether or not that SBA estimate included “Obamacare” costs). Last time I checked, the SBA is a part of the Federal government and, therefore, part of the Obama Administration. That SBA estimate is cited in the CEI article that you obviously didn’t bother to read (or perhaps your reading comprehension misfired on you again). When two estimates are done by two different, independent agencies with very different agendas agree fairly closely – then yes, that makes each more credible. So yes: there ARE INDEED two credible estimates for the cost of Federal regulation to the US economy – one produced by the Federal government itself, and one produced independently by a private-sector “think tank”. And they agree within 6%. Of course, I guess you could take the position that your beloved omniscient Obama Administration is full of it and can’t accurately estimate costs. OK, go ahead and do that. Then you can explain why anyone should believe a damn thing they say about AHCA’s costs. I don’t believe them, frankly. Why? For starters, history. Just take a look at Medicare – which was originally estimated to cost “as much as $500 million annually” at it’s beginning. That equates to considerably less than $5 billion in today’s dollars. Medicare costs a little bit more than that – and I’ll discuss Medicare in the future too. Very few government programs ever… Read more »
There were plenty of folks who fought the implementation of social security because they saw it for what it was from the beginning. It was a method to suck people into government dependancy and it worked exactly as those who forced it upon ordinary, hard-working Americans intended.
It was never an insurance plan. It is still not an insurance plan. But those who want to hide their intent like to redefine terms, or simply lie about them.
@21- I said that CEI was not a credible source. I do not know whether their estimate is correct and- by their OWN admission- neither do they. According to CEI the SBA no longer stands by those numbers and claims it’s an “urban legend”. Either way your source for the SBA claim seems to be CEI! I’ve looked and I can’t find any site or link in which the SBA made that claim.
Plus the SBA is a pretty weird secondary source. They generally don’t handle budgetary and accounting statistics- certainly not for the whole USA. Their focus is on helping small business. The CBO or the OMB are generally considered much more credible agencies for something like this. According to your link, the OMB puts the cost businesses pay in complying with Federal Regulations at 88 billion. Still a lot of money but nowhere near 10% of the economy. CEI doesn’t believe them, which is their right and is, in fact, the entire purpose of the “Tip of the Costburg” site. They believe that the government isn’t doing the job right and they’re attempting to fill that gap.
But they admit they’re not accurate. They also admit that the SBA does not stand by the 1.7 trillion figure. They claim they’re bowing to political pressure- which may be true, but that’s still hardly a great second source.
But my main point is- even if true- the number is meaningless without knowing WHAT the regulation is in question and what the benefits of the reg is. To simply anounce this costs X therefore we should get rid of it is a stupid argument when talking about the cost of regulations OR the cost of defense for that matter.
social security is robbed to pay for wars and other programs at the disposial of the powers that be. People pay in to the system all their life and never draw a dime die before retirement. How can it be going broke if it is used for what it is designed to be. The system is abused for example to come in to this country become legal do not pay in to the retirement system then leave put up a mailbox on the border on the usa side cross back over only to get there check whats up with that. A lot of young people I know 18 to 30 get right it that has never worked lazy and wont work. paid within 6 months that really is not disabled. I come up old school at the age of 17 raised in the country from a family of loggers carried a chain saw in the logging woods for 20 years become disabled took a lesser job worked another 17 years became more disabled got laid off one year before my matched retirement 5 disks hernated tore rotor cup and seprated shoulder paid in to the system all my life. Going on 5 years not on my DSS yet still just now waiting on decesion from judge if i ame disabled or not.Please give me a break. Don/t take it out on people who really are disabled from people who are just 2 dame lazy to work and want a free ride.If your able to work you should work for the rest of us old timers who paid in worked hard phisical labor disabled now can/t work anymore give us our diserved god given right DSS.