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June 01, 2011 at 08:00 PM
It seems a bit like the old classic saw, doesn’t it? We borrow money from China and other places, and then give it to other countries, say Pakistan or Afghanistan. And, while we are involved in that exercise, the debt clock is racing forward: tick, tick, tick. Peter will loan us money as long as he believes we’ll pay it back, and Paul will accept our charity, so long as the purse is open.
Part of our largesse is to protect our sources of oil. (Canada supplies the most, but Mideast oil is very important.) And, of course, one of the reasons is we like governments that we understand. It’s not so much that we favor tyrants, but more that we like leaders we comprehend and know and that we fear the unknown. As brutish as Saddam was, he would probably still be in power if he had not played the weapons-of-mass-destruction card. (Yes, we probably should have known that Saddam, when it came to nuclear threats, was all braggadocio, but that’s moot now, water over the dam.)
And the money we are not giving away, we are spending for public programs, like Medicare and Medicaid.
Politicians, particularly those running for office, like to play on debt fear. One of the favorites is Social Security. There’s a whole segment of the population that thinks it won’t be around in 30 years, or, if you don’t like that number, pick your own. This comes about because there is little deep thinking in this country.
According to the Social Security Administration, one-third of retirees rely on Social Security for 90% of income, and another third relies on it for half or more of income*. By extrapolation, that suggests 75% of retirees find Social Security income critically important. So, who would discontinue Social Security? If it was discontinued, there could be anarchy and even blood in the streets. The absence of a retirement income program could be the one thing to topple the republic.
The other thing is this about Social Security: We pay for it. And, if we work past age 65, we pay for it again, by paying taxes on the money we receive from the taxes we already paid. Only the worst pension actuary in the world couldn’t make Social Security work. It’s a defined benefit plan, and the first pension I ever sold was a defined benefit plan. DB plans are easy-peasy to design and to fix.
