Free Markets, Free People

Why are we in the mess we’re in? [update]

You don’t have to be a rocket scientist, brain surgeon, or even particularly smart to figure out that this trend means entitlements, as structured, will fail:

Last week, the Commerce Department announced that the gross domestic product shrank by 0.1 percent in the fourth quarter of 2012. And the Census Bureau reported that the U.S. birthrate in 2011 was 63.2 per 1,000 women ages 15 to 44, the lowest ever recorded.

Slow economic growth and low population growth threaten to undermine entitlement programs like Social Security and Medicare. Despite contrary rhetoric, they are programs in which working-age people pay for pensions and medical care for the elderly.

When Medicare was established in 1965 and when Social Security was vastly expanded in 1972, America was accustomed to the high birthrates of the post-World War II baby boom. It was widely assumed that the baby boom generation would soon produce a baby boom of its own.

Oops. The birthrate fell from the peak of 122.7 in 1957 to 68.8 in 1973 and hovered around that level until 2007. The baby boom, it turns out, was an exception to a general rule that people tend to have fewer babies as their societies become more affluent and urbanized.

So, when will our so-called “leaders” finally  figure this out? My guess, in fact it really isn’t a guess, is they know but haven’t intestinal fortitude, politically speaking, to do what is necessary.  That is cut them, privatize them or any of a host of other options they won’t even consider.

What they will consider, of course, is raising taxes and borrowing.

The fact of the matter is that both Social Security and Medicare are based in flawed models. The original models saw the base of the those paying into the system remaining constant, despite the “general rule that people tend to have fewer babies as their societies become more affluent and urbanized.”

The numbers don’t lie. Fewer and fewer workers are available to pay into these systems and continue to pay out at the rate at which they’re paying out now. This is no mystery. This is plain old everyday economics.  It’s as plain as the nose on your face. Yet our so-called “leaders” seem unwilling and unable to face the facts.  The facts are not going to change. We’re not going to suddenly have a baby boom again.

These are the sorts of problems elected leaders are supposed to face head-on. That’s why they’re elected, supposedly. Yet we continue to let our elected officials get away with malfeasance. So while it is easy to point at them and say they’ve failed, in fact we’ve failed. We have failed to gin up the courage to do what is necessary to fix these problems. To force our “leaders” to do the right thing. We continue to claim in poll after poll that entitlements must be fixed. Yet we continue to put in office, time after time, the same people who haven’t yet mustered the courage to do that (nor fund themselves held accountable for not doing it).

Whose fault is that?

UPDATE: Here’s a perfect and timely example of part of the point:

John Kasich, the fiercely conservative governor of Ohio, announced Monday that he’s going to expand Medicaid dramatically using federal money — a 180-degree turn from what conservative groups swore their allies in governors’ mansions would do when the Supreme Court gave them an out last year.

This makes John Kasich a big, fat liar.

Republicans should be the ones circulating recall petitions. He should be drummed out of office, out of politics and never again hold any office higher than dog catcher. But they won’t, because despite this, he’s “one of ours”.


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39 Responses to Why are we in the mess we’re in? [update]

  • I said it right after the election…
    We were given a choice between rational reforms and catastrophic failure.
    A bare majority of those voting chose catastrophic failure.

      • This isn’t Ronald Reagan’s Republican Party

        • You never put your foot in the same river twice.
          The GOP is BETTER in many respects than it was in Reagan’s day.  I was there.

          • They are about the same, but the RINOs didn’t completely run the party then. 

            The party leadership is entirely taken over by RINOs today.  And instead of being purged, they are doing the purging.

          • I have to resist your “RINO” use.  One can be a Republican (see Hagel, Chuck) and not have a conservation value in your head.  I think the use of RINO is dumb.  I recommend the use of COIN (conservative in name only).
            Review the leadership during Reagan’s terms.  They were hardly a bunch of conservative razors.

          • Through an odd twist of fate, I ended up at the 100th birthday party for Richard Nixon at the Mayflower Hotel on Jan 9th.  I came away believing that there are so many Republicans that I just don’t agree with.

          • Well the term RINO is more appropriate to me due to their alignment being more consistent with Democrats’ values circa the 80’s.
            And I can’t think of one thing about the GOP leadership that is one bit better than Reagan’s day.  Some Tea Party-ish candidates have gotten in, but they’ve been trivialized and/or purged.

          • There is such an investment in our “Capitol City” by both parties that they are now both working to protect the funding.  Yes, all politics are local and the DC metro area is local to itself, except it’s constituents can tax the rest of the country.

          • What’s amusing is you think that is NEW.  It ain’t.  Read Cicero.

    • Correct. It’s always easier for children to choose candy over medicine. And to be honest, the “rational reforms” weren’t even that radical or drastic. Oh well, these things tend to correct themselves. I don’t think people will enjoy the process though.

      • So the snarky version … which I shouldn’t even say because it will get me in trouble is death panels and sales taxes is how we do this.Paul Krugman

      • I’m not sure many are willing to take the medicine.  Almost anyone you speak with, even if you just had a conversation about how unsustainable the situation is and they agree with you and has a “I h8 Dems” button, when the time comes absolutely expects to get ‘their share’. 

  • As another interesting development which can only accelerate the failure of our “entitlement” boondoggles…

  • Another factor to consider – off the shelf birth control….and certainly abortion wasn’t performed in clinics on main street.
    Increased sex without the usually natural consequences of increased population.
    I’m not judging, I’m just saying.
    The wife and I done our part to replace and increase for the greater benefit of Social Security,   🙂

  • In terms of going forward…assuming we have the time left…
    This deserves some exposition.
    What he says about our appeal to feelings seems to be at least somewhat novel. In fact, (which conflicts with “novel”) there seems to be a growing consensus around this idea, stated in terms of changing our messaging.
    Personally, I recognize that I have resisted this in some respects. “Out-caring” Collectivists has been a distasteful notion to me. I’ve always thought in terms of “out-thinking” or “out-using rational thought” against them. “Out-caring” has always implied a bidding war, and I am hardly alone in that.
    But that is not what Horowitz means. Instead, he simply means NOT couching everything we believe in rational expression. Conservatives DO care deeply about people, and our ideas WORK and are sound. We have to learn to SHOW that better, and somehow do it over the din of the Collective propaganda saying otherwise.
    Catastrophic failure is the LEAST caring thing we could allow to happen.  It MAY be dialed in now, the trajectory set, but we still have to CARE enough to try.  Churchill would…

    • I don’t think I believe that. I remember a good round of goofing on Dems after the last mid-terms because they blamed losing on the messaging, rather than the message.
      In this economy, you had one candidate pushing jobs, and the other one pushing punishing the rich. I can’t blame the messaging here. Women voted to be Julia. People voted for “revenge” (Obama’s word)
      How could different messaging change that? IT CAN’T.

      • It isn’t as simple as “messaging”, shark.
        Think about Milton Friedman and Ronald Reagan.  One of the MANY things that made me love both those guys is seeing how much they cared about people.  Yes, they DID have a rational, workable ideology they were ALSO projecting, but it was really about people for them.
        Funny, the more I learned about Mittens, the more that came out about him, too.  But most never got that.

        • I think Mitt should have added a plan to shrink the too big to fail banks. Hard cap of $100 billion in size, and with a leverage ratio. Repeal a bunch of other regs too. I’d add in a personal performance bond requirement for financial just to be vindictive. Execs must put up a bond that will be forfeit if they fail. (Maybe just have this instead of the cap and make it a % of the bank size…you want to run Citi as a 2 trillion dollar bank? Well, come up with 2 billion dollar performance bond and we will talk.)

          • I should have explained more…this would have mitigated some of the “GOP is in bed with Wall Street” problem. It relieves the problem of TBTF, allows fairer competition by removing the TBTF implied subsidy but it also show someone doing something about the financial industry’s trump card. I think it would meet bipartisan and Main Street approval.
            I think the GOP also should be pushing school vouchers. This is a key to both reducing union power and brainwashing in schools, AND it will improve education. Sweden does this. Just keep saying that, and the libs will have to shut up. This is another bread and butter middle class issue.
            I think the “jobs creator” meme did not work. Too many employee schlubs just cannot connect to that. They cannot connect the dots. So instead, work on cutting the corporate tax rate focusing on JOBS only. Talk about Canada doing this during their reforms. Explain we have the highest corporate tax rate in the world, so investment goes to Canada instead of here.
            Contrast Texas with California.

        • Eh. The kind of women who vote because they see themselves as waking uterus’ and the “get the rich” crowd won’t be swayed by that.

      • The Dems put lipstick on a pig and blame the lipstick when noone wants to marry the pig. The Reps put sackcloth and ashes on Bar Rafaeli and blame her when noone wants to marry her.
        Messaging is important, but it won’t work by itself. You need something to work with.

        • Bar Rafaeli?  I’d take her in ashes, sack cloth, and unshaven legs.
          Oh wait… this was a political discussion wasn’t it?
          Besides SHE would probably be sadly disappointed with the deal….

    • I think the only caring they worry about is that someone will give them something for what they interpret to be nothing.   We know that world doesn’t exist, and that it screws everything up, but that takes too long to see, and the people they’re appealing to are not exactly cause and effect people.
      You can’t tell the children they can’t have any pudding if they don’t eat their meat and expect them to welcome that, it won’t happen.   The interpretation of anyone who wants something, and doesn’t give a rat’s back side how you get it for them is not going to favor someone who tells them we care, but aren’t giving them free (x).
      The other side will just go on promising that you CAN eat ice cream all day and not gain weight, and that they’ll provide the ice cream, just let them worry about where it comes form.  You can’t outcare them on this because ‘caring’ is merely lying for the short term of the election cycle and afterwards keeping the carrot just far enough away from their noses as a distraction from the cliffedge they’re leading the country over.
      Maybe we shouldn’t have bowdlerized the Grimm’s fairy tales to have happy ever after endings.

  • APNewsAlert WASHINGTON (AP) – AP source: Obama to ask for short-term budget fix to delay across-the-board automatic cuts.

    The possible scenarios are endless

    • Obama used the impending automatic cuts / tax increases to get tax increases.  But when its time to make cuts.  “ohhh wait a second now…”

      And the Media will act like that is perfectly normal.  F****** crazy. 

      • Now that he got his tax increases, is trying to put off sequestration which he agreed to initially.
        I hope Repubs don’t cave on this because otherwise he’ll never cut one dime on non-defense expenditures.

        • Shoot, you didn’t ever REALLY think there were cuts coming, and I mean real cuts,  did you?

          • The idea of the sequestration came form the White House originally, but now the OM (Obama Media) are fighting to just make this a bipartisan, 50-50, thing.
            It seems that this tact by the Republicans in the House is working much better than most gave them credit for.


        The Washington Post Tuesday, February 5, 11:16 AM
        President Obama on Tuesday will call on Congress to pass a small package of spending cuts and tax changes to delay deep reductions in domestic and defense spending from starting next month, a White House official said.

      • Boehner reminded members of the press that House Republicans have, on two separate occasions, passed legislation that would replace the sequester with an alternative package of cuts less heavily weighted toward the defense budget. “It’s time for the Senate Democrats to do their work,” he said. “It’s time for the president to offer his ideas about how to replace the sequester.”
        Moments later, the White House announced that President Obama will propose a short-term package of spending cuts and tax increases that would delay the sequester until the formal budget process can be completed (Obama’s budget is already past due).

        Yeah. The White House is required by law (no less) to provide a budget request by the first Tuesday in February (i.e. yesterday), but failed.

    Kasich, unfortunately, is hardly the Lone Rearranger…
    One thing about ObamaCare…it makes “comprehensive immigration reform” simply unaffordable.

  • I wonder if FOX news will report this flip-flop by their former comentator?

  • I’ll note that G. W. Bush actually put social security reform on the table. Oh, sure, he expanded Medicare, but he was actually trying to fix something.

  • John Kasich, the fiercely conservative governor of Ohio, announced Monday that he’s going to expand Medicaid dramatically using federal money — a 180-degree turn from what conservative groups swore their allies in governors’ mansions would do when the Supreme Court gave them an out last year.

    This makes John Kasich a big, fat liar.
    Perhaps there’s context I’m missing, but unless he spoke for one of those “conservative groups” or signed some pledge to do otherwise, I’m not seeing the lying.
    Now, a bad idea? Sure. “Not very conservative”? Absolutely.
    Even reading into the (broken into four pages to whore page hits) article, I’m not seeing him lying.
    He might, maybe, be a hypocrite re. a previous (and otherwise current) opposition to “big government” or “spending”.
    But I’m not seeing a lie

  • The figures are not broken down by race because that would be racist, but it would also reveal that the country is breeding more takers than makers.

  • You might remember when I predicted that all of the governors would cave in. Eventually they all will. It is a political inevitability, so don’t be so hard on Kasich.