The answer may be “in a cave up in the mountains, taking a guard duty shift at the mouth of the cave, projecting how long the canned food can last before another supply run is needed.”
Here is a screen capture from the White House proposed budget for 2022. It shows “accounts payable” and “accounts receivable” over the next nine years. It projects budget deficits in the 1.3-1.5 trillion dollar range.
In addition, it shows expected mandatory outlays. These start at 4 trillion and go to about 5.5 trillion. Dollars. These are things like Granny’s social security check.
Discretionary outlays are in the 1.6-1.8 trillion dollar range.
So, a little back of the envelope math. Public debt is “officially” around 23 trillion dollars, and as seen here only continues to increase at a yearly clip of over a trillion dollars.
How might we get the debt and deficits under control? Well, we could take an axe to discretionary spending and just completely wipe it out. No defense spending, nothing. Does that sound likely? No.
Or, we can cut social spending by a trillion and a half each year. Does that sound likely? No.
Trouble is, reality may do that for us, though. And how smoothly do you think those social changes will go? This from a 2020 SS Trustees report:
Under the Trustees’ intermediate assumptions, OASDI cost is projected to exceed total income starting in 2021, and the dollar level of the hypothetical combined trust fund reserves declines until reserves become depleted in 2035. Figure II.D2 shows the implications of reserve depletion for the combined OASI and DI Trust Funds. Considered separately, the OASI Trust Fund reserves become depleted in 2034 and the DI Trust Fund reserves become depleted in 2065.2 In last year’s report, the projected reserve depletion years were 2035 for OASDI, 2034 for OASI, and 2052 for DI.
2021 was last year by the way, and just after these budget projects run out, Social Security keels over.
How about Medicare? Same story.
The trust fund for Medicare Part A will be able to pay full benefits until 2026 before reserves will be depleted.
That’s the same year as predicted in 2020, according to a summary of the trustees 2021 report, which was released on Tuesday. If the reserves run out for the Hospital Insurance Trust Fund, then the program’s income should be able to cover 91% of scheduled benefits. Medicare Part A covers hospital care for enrollees.
Then there’s interest on the debt. From projections, just the interest on the debt runs from about 8% of net mandatory outlays up to around 17%. And that doesn’t take into account interest rates going higher.
Then there’s interest on the debt. From projections, just the interest on the debt runs from about 8% of net mandatory outlays up to around 17%. And that doesn’t take into account interest rates going higher.
The roughly $300 billion the federal government will spend on interest payments this fiscal year is more than it is expected to spend on veterans’ services and military retirement ($185 billion); transportation ($188 billion); food and nutrition services ($172 billion), including the Supplemental Nutrition Assistance Program (“food stamps”); housing ($100 billion); K-12 and vocational education ($77 billion); and higher education ($42 billion). By FY 2031, interest costs are projected to be larger than federal spending on Medicaid and unemployment compensation, and over 90 percent as large as defense spending.
…
Under current law, we project interest spending will total $5.1 trillion over the 2021 to 2031 budget window. If interest rates on the projected annual debt stock were 50 basis points (0.5 percentage points) higher than CBO currently projects – reflecting the continuation of the current disparity between projections and reality – interest costs would increase by $1.7 trillion, to $6.8 trillion total. If interest rates were 100 basis points (one full percentage point) above CBO’s forecast, interest costs would total $8.6 trillion over that period, which is a $3.6 trillion increase over current law.
If interest rates begin at 50 basis points (0.5 percentage points) above CBO’s projections and gradually rise to 200 basis points (2 percentage points) above CBO’s forecast – bringing ten-year rates to just above their 30-year average of 4.3 percent by 2031 – interest costs would total $11.1 trillion over the 2021-2031 budget window, which is $6.0 trillion more than under current law.
The asteroid is heading for Earth. Impact is projected to be smack in the middle of North America. And no laser in existence is going to deflect it.
So, be careful on that supply run down into the valley. The cannibal gangs are merciless.
Yet, millions of illegal invaders have been and continue to pour across the border, with DemoCommies giving them SS and other public benefits without paying anything in. What could possibly go wrong?
Now, for the conspiracy theory of the day. Early on in the plandemic, several DemoCommie Governors, including our own insecure, feckless version, kept plugging old people with WuFlu into nursing homes. Further, they were quick to put ventilators on those that went to the ICUs, causing many to die. These actions are looking more and more by design, as more data is released. I mean, if the SS money is running out, they either have to refill the coffers with fiat money or kill off a few million recipients. The Dems always accuse the GOP of wanting to kill grandma, deflecting from the fact that they are the ones actually doing it. Now, we have proof.
Knowing that the real national debt exceeds the national wealth by quite a bit, I’ve been praying that we will get adult politicians who will be willing to say “we have a choice–we can take a serious hit to our social programs now, or we can have a catastrophe later. Which do we want?”
Praying also for adult voters to make the right choice, as our implicit choices so far are the latter.
You guys are so 20th century. All the cool kids now believe in Modern Monetary Theory (MMT).
Some say such spending would be fiscally irresponsible, as the debt would balloon and inflation would skyrocket. But according to MMT:
– Large government debt isn’t the precursor to collapse that we have been led to believe it is;
– Countries like the U.S. can sustain much greater deficits without cause for concern; and
– A small deficit or surplus can be extremely harmful and cause a recession since deficit spending is what builds people’s savings.
MMT seems (to me) to be based upon proof by assertion.
If I believe in Santa hard enough, surely the presents will show up on Christmas morning without adult intervention (which I have been duped into providing lo these many years).
At the end of the movie “Dumb and Dumber,” Nicholas, the kidnapper, holds Lloyd and Harry at gunpoint demanding the briefcase containing the ransom money.
***
Lloyd : Listen, about the briefcase, my friend Harry and I have every intention of fully reimbursing you.
Nicholas: Open it up. Open it up!
Lloyd: Go ahead, open it up. Do what he says. Hurry.
Nicholas: What is this? What is this? Where’s all the money?
Lloyd : That’s as good as money, sir. Those are I.O.U.’s. Go ahead and add it up, every cent’s accounted for. Look, see this? That’s a car. 275 thou. Might wanna hang onto that one.
***
For decades, the federal budget ran short in the General Fund but had a surplus in the Social Security fund so they lent themselves all the Social Security money and replaced it with IOUs. That’s what “trust fund reserves” means – IOUs from the General Fund to the Social Security Fund – which they have every intention of repaying.
Just like Lloyd and Harry.
I’m not worried at all. What could go wrong?
MMT may be an attempt to “fiat” things (simply declare rather than prove, pun intended), but I’m also compelled to point out that it also amounts to an agreement to ignore the hyperinflations of the past century like Weimar Germany, interwar Austria, Hungary, Zimbabwe, Argentina, Brazil…..really pretty much most of the countries of Africa and Latin America, as well as a lot of the countries of the old Warsaw Pact after their independence from Moscow.
I’m not arguing for or against MMT as a theory. I’m saying that it is now policy. The Biden administration has adopted MMT.
The debt and those deficits are no longer accidental or a misunderstanding or just something that got kinda got out of control. The notion that facts or rational arguments will have the slightest effect is wrong. The debt and those deficits are now completely intentional, on purpose, and considered to be desirable.
One of the casualties of the current inflationary spiral is MMT.
Whatever currency (har!) it had among serious economists vanished with 6% inflation. You cannot propose MMT when inflation is significant, any more than you can suggest you ran up too little credit card debt when American Express cutting up your card.
Not saying that you won’t find a few defenders of MMT in academia, but most of the economists who boosted the idea in the 2010s will look away and change the subject if you ask them about it now. Apparently it actually is possible for the supply of dollars to outrun the demand, even when the dollar is the accepted reserve currency.
Not grandma’s social security, Mr. Kouba, MY social security.
You mean when SS mails me my survivor benefit, they will no longer be able to go to Fort Knox, open the safe deposit box with my name on it, and pare off the fraction of a krugerand that is earmarked for my monthly payment?
Someone has been irresponsible.
Pain will no doubt have to be inflicted on taxpayers. Higher taxes or reduced benefits or most likely both. As Mr Kouba states — the issue has existed for decades…the only thing that has changed is the date at which the trust fund is exhausted requiring a reduction in benefits to match inflows. This has always been somewhat of a moving target. The choice will be whether to raise the retirement age, raise the payroll tax % (which has remained the same for over 30 years), raise the income threshold or eliminate it entirely, or make the benefit cuts when the time comes. I think it will be a combination. Early retirement (currently 62) is a goner for sure, maybe 65 as well. I also see raising the payroll tax by a point (.5% for employers, .5% for employees), and also taxing high earners with a second floor at perhaps $500K in income, hitting them with payroll tax above that line. And then, in 10 or 15 years, maybe even reducing benefits…
And guess which party raided the SS money, moved it into the General Fund and replaced the money with IOUs?
Guess which party, led by a certain current resident of the White House led the charge to tax SS benefits, then voted to increase those taxes a few years later? Yet, the remainder of the greatest generation and many of the boomers, keep electing these money grabbing losers.
When Bush the First reformed social security in the early 1990s, he raised the retirement age. I know just what that cost me: $31,000 in retirement benefits.
In my working lifetime I paid about $380,000 in SS taxes.
How much will SS pay me if my life expectancy is average?
About $380,000. I gave the government a loan at 0% for forty five years.
Yeah, us Boomers got such a great deal out of social security.
Oh, I dream of getting 0% interest on my Socialist Insecurity……I think the over/under on what I’ll get is about -2% or so. Only one thing could be worse; government investing in private companies and filling out the proxy statements to make every last one of them act as liberals.
Not sure whether or not this is a threadjack, but, it’s related to high tax and spend policies.
Yesterday, Gary Sinise announced that he’s moving the HQ of his foundation from L.A. to Nashville. During his interview, he said he looked at all zero/low tax states.
If you want to know how we got here, read John Maynard Keynes The Consequences of the Peace (1920): https://oll.libertyfund.org/title/keynes-the-economic-consequences-of-the-peace
It’s quite short and can be read in an hour.
What Keynes does in the essay is compare the economy of the Victorian age with the emerging Modern age.
Keynes praises the economy of the Victorian age. We are used to thinking of the Victorian age as an age of immense poverty, but Keynes noted that the 19th century was a century of immense economic growth (world GDP grew 19x from 1800 to 1900, while in the 20th century it has grown a relatively paltry 9x).
Keynes demonstrated that the prosperity and growth of the 19th century was a result of the high savings rates and the investment in producing children made by the Victorians. The first provided the capital needed for economic growth, the second meant that families could be largely economically independent. Parents supported children when they were not economically productive, children supported parents in their old age.
World War One had broken private savings by inflating currencies and had broken the independent family by killing young adult males on the battlefield. After World War One savings decreased dramatically, starving the economy of investment capital, and people stopped having as many children.
Keynes thought that therefore the state had to step in to provide investment capital and economic security for families.
Keynes ideas were adopted quickly in Europe and a bit more slowly in the US.
For those who don’t know, Gary Sinese played Lt. Dan in Forrest Gump and runs a foundation for wounded veterans, but he’s also in The Lieutenant Dan Band which is a crowd favorite at EAA Airventure fly-in at Oshkosh every summer. The guy is a plain awesome human being.
And now Gary is on the TNian’s shit list for blowing the TN cover.
I’m with boss on this one. Kill off the seniors and import voters to keep the elites in power. Take money from one pocket and put it another and shout from the rooftop at all the money you just found. Push the ball downhill and when you are at the bottom, just dig deeper until you find yourself in that cave, 9 years from now, waiting to go on the run to scrounge your tribe some spam.