Robert Samuelson: 'The Twilight of Entitlement'

Source:The Washington Post- perhaps one of Robert Samuelson's loyal readers.

"We are passing through something more than a period of disappointing economic growth and increasing political polarization. What’s happening is more powerful: the collapse of “entitlement.” By this, I do not mean primarily cuts in specific government benefits, most prominently Social Security, but the demise of a broader mind-set — attitudes and beliefs — that, in one form or another, has gripped Americans since the 1960s. The breakdown of these ideas has rattled us psychologically as well as politically and economically.

In my 1995 book, “The Good Life and Its Discontents,” I defined entitlement as our expectations “about the kind of nation we were creating and what that meant for all of us individually”:

We had a grand vision. We didn’t merely expect things to get better. We expected all social problems to be solved. We expected business cycles, economic insecurity, poverty, and racism to end. We expected almost limitless personal freedom and self-fulfillment. For those who couldn’t live life to its fullest (as a result of old age, disability, or bad luck), we expected a generous social safety net to guarantee decent lives. We blurred the distinction between progress and perfection. 

Bill Clinton has a pithier formulation: “If you work hard and play by the rules, you’ll have the freedom and opportunity to pursue your own dreams.” That’s entitlement. “Responsible” Americans should be able to attain realistic ambitions.

No more. Millions of Americans who have “played by the rules” are in distress or fear that they might be. In a new Allstate-National Journal survey, 65 percent of respondents said today’s middle class has less “job and financial security” than their parents’ generation; 52 percent asserted there is less “opportunity to get ahead.” The middle class is “more anxious than aspirational,” concluded the poll’s sponsors. Similarly, the Employee Benefit Research Institute found that only 51 percent of workers are confident they’ll have enough money to retire comfortably, down from 70 percent in 2007.

Popular national goals remain elusive. Poverty is stubborn. Many schools seem inadequate. The “safety net,” private and public, is besieged. Our expansive notion of entitlement rested on optimistic and, ultimately, unrealistic assumptions: 

First, that economists knew enough to moderate the business cycle, guaranteeing jobs for most people who wanted them. This seemed true for many years; from 1980 to 2007, the economy created 47 million non-farm jobs. The Great Recession revealed the limits of economic management. The faith in a crude stability vanished.

Second, that large corporations (think: General Motors, AT&T) were so dominant that they could provide secure jobs and generous benefits — health insurance, pensions — for much of the labor force. Deregulation, foreign competition and new technologies changed all this. Companies became more cost-conscious, cutting jobs and squeezing fringe benefits. The private “safety net” has shrunk.

Third, that improvements in economic efficiency (a.k.a. “productivity”) would lift living standards and finance bigger government without steeper taxes. Government could pay for new programs by taking a fixed share of rising incomes. In reality, greater income inequality has dampened middle-class living standards, while existing programs — soaring health costs and the effects of an aging population — have claimed an ever-larger share of taxes. 

Fourth, that lifestyle choices — to marry, have children or divorce — would expand individual freedom without inflicting adverse social consequences. Wrong. Family breakdown has deepened poverty and worsened children’s prospects. About 30 percent of children live with either one parent or no parent; on average, their life chances are poorer than those in two-parent households.

Weighed down by these contradictions, entitlement has been slowly crumbling for decades. The Great Recession merely applied the decisive blow. We’re not entitled to many things: not to a dynamic economy; not to secure jobs; not to homeownership; not to ever-more protective government; not to fixed tax burdens; not to a college education. Sooner or later, the programs called “entitlements,” including Social Security, will be trimmed because they’re expensive and some recipients are less deserving than others.

The collision between present realities and past expectations helps explain the public’s extraordinary moodiness. The pandering to the middle class by both parties (and much of the media) represents one crude attempt to muffle the disappointment, a false reassurance that the pleasing past can be reclaimed. It can’t. This does not mean the economy can’t improve. Derek Thompson, writing in the Atlantic, suggests that when “millennials” end their delays in marrying, having children and buying homes, they will administer a welcome stimulus to growth. The trouble is that today’s grievances transcend the economy.

In the post-entitlement era, people’s expectations may be more grounded. But political conflicts — who gets, who gives — and social resentments will be, as they already are, sharper. Entitlement implied an almost-limitless future. Facing limits is a contentious exercise in making choices." 

From The Washington Post 

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Robert Wenzel: 'Business Insider: Taxes Need to Be Raised'

Source:Business Insider- is an economic and current affairs publication.

"Business Insider, co-founder, CEO and Editor-In Chief, Henry Blodget loves government so much that he wants to take more of your money and give it to the state. He writes:

We DO have a spending problem.

And if we are ever to get our budget deficit under control, we need to trim long-term spending growth.

But blaming the whole deficit problem on "spending" ignores the other half of the problem: Taxes.

Our federal tax revenue right now is historically low.

To begin to address our deficit problem, therefore, we need to trim spending growth and increase taxes.

Note: No discussion by Blodget of the coercive nature of taxes. No discussion of the bureaucratic machine that is fed by tax money. Just a call for increased taxes. Hey Henry, I have a great idea. In 2013, I am thinking of leeching off the government and grabbing every penny I can.. So let's eliminate the bureaucratic paperwork and middlemen and send a check directly to me in the amount of what you have determined you want to pay in higher taxes."  

From the Economic Policy Journal

Big Government: John Galt: "Price Gouging?" NJ Governor Chris Christie is Already Talking About Raising Taxes to Pay For Hurricane Sandy

Price gouging? Chris Christie is already talking about raising taxes to pay for Hurricane Sandy

The more I learn about Chris Christie is the more different he is from the Tea Party, he's sane for one and he's also a Governor. And public official who puts doing his job and his people over whatever partisan political philosophy and movement. That he might be subscribed to, he just got hit with perhaps the worst hurricane in the history of the Northeast and in October at all times. When the weather in New Jersey is starting to get cold, this was not one of those late summer hurricanes that we see in the Southeast. When the weather is still hot and humid but in the Northeast in October when the weather is starting to get cold. He got with and teamed up with President Obama simply because he needed his help and put his state over his party and. Whatever political movement that he might be part of right now and because of all the damage and because of. How both New Jersey and the Federal Government are scrapped as far as cash right now, is considering doing. Something he normally wouldn't do, which is to raise taxes to pay for the cleanup of Hurricane Sandy.

The whole Hurricane Sandy episode that the Northeast the is still experiencing and having to deal with rather. Then watch it on TV like the rest of the country, does bring up a couple questions that needs to be answered in the future. Especially with the situation of the economy, debt and deficit, whose best to deal with disasters like this and how do we fund it in a way that can prevent us from having to put the money. On the national debt to pay for in the future, so do we need a National Disaster Fund to pay for these cleanups that. Could be run by the states with the resources to pay for it and do we need some type of Disaster Insurance System. To help property owners who watch their properties get wiped out when a disaster like this happens, that again could be run by the states as well. Not talking about new Big Government Federal programs but things the states could run by themselves.

CNN Money: Tammy Luhby- 'Will FHA Be The Next Big Government Bailout?'

Source:CNN Money- the bankrupt Federal Housing Administration.

"Continued trouble in the housing market has further eroded the Federal Housing Administration's reserves, leaving it with a very thin cushion to protect it against future financial losses.

And should housing values continue to plummet, the agency may have to turn to taxpayers for a bailout, according to its annual report, which was released Tuesday.

The agency's reserves fell to 0.24% in fiscal 2011, down from 0.5% the year earlier, according to independent estimates in the report. This ratio measures the net worth of the reserve fund compared with the value of the loans FHA has insured." 

From CNN Money

The Federal Government has a history of setting up enterprises that are somewhat self-financed and independent. But really aren't because the Federal Government still has a role in its management. 

The Postal Service, the Federal Housing Administration, Amtrak, Social Security, and Medicare aren't bankrupt yet. But both are in need of reform to avoid that same thing with Medicaid down the road. And the 2010 Affordable Care Act that I by in-large support, makes Medicaid financial outlook even worse. Because it adds millions of people to Medicaid without a way to pay for it. 

Medicaid is Health Insurance for low-income people, who can't afford to pay for their health insurance, so the revenue is going to have to come from somewhere else. 

FHA, Freddie Mac and Fannie Mae are what's known as government sponsored enterprises (or GSE) which is the big part of the problem right there. 

Government shouldn't be in the business of sponsoring enterprises, especially in a capitalist economy like America. Government is not a for-profit organization, but a public service designed to serve, not to make money and collects revenue to do those things, not to make money. Doesn't mean it should run debt and deficits either, but they are not in the business to make money. But to serve the people that they represent.