Monday, December 03, 2012

Words Do Matter

Perhaps if those interested in government that serves the people stopped talking about “entitlements” and started describing programs that help millions of  Americans live decent lives as “safety nets,” we would have a more rational public discourse about fiscal responsibility.


schmidleysscribblins, said...

Sadly, the word 'entitlement' has taken on a pejoritive connotation. Truth about SS is that it is an insurance program we all paid into all our working lives.

My working life was from age 16 to age 64 when I retired for health reasons. Immediately, I went on SS, which as a government employee became my retirement fund. I went on Medicare at age 65, at which point my insurance company breathed a sigh of relief, I am sure.

Sadly, during the so-called "boom" years of the Clinton administration, the SS funds were used to pay for other entitlements. Now paybacks are hell in a weak economy and with the payroll tax (which helped support SS payments) suspended.

I have no problem with helping the truly needy, but it disturbs me that many people cannot see that the medical programs in this country are in dire straights.

Serious talk would involve payments made to third parties such as insurance companies and drug manufacturers and not just how the taxpayers can pay more and more every year to subsidize health care for all, plus any other boondoggle the politicians dream up.

Medicaid is a serious cost for some states. To pay for the latest increase in Medicaid payments, VA faces cuts to education and mental health clinics. I don't consider that progress.

VA keeps its tax rates low to attract retirees from frozen places (like MI), After they arrive, said retirees help defray the cost of everything from schools to streets when they pay local taxes.

Commerce is also drawn to VA because of lower taxes and because VA is a 'right to work' state. Businesses are not fond of unions that overreach like those in MI.

On the negative side, some taxes should be raised. For example, gas taxes in our state (VA) are stuck at the 1986 rates and infrastructure relies on the funds from gas taxes for rebuilding. I would reform our woefully inadequate gas taxes before one of our bridges collapses.

The trick is to make sure the funds are used to rebuild roads and bridges, not divert funds to unfunded federal projects.

This latter is why I for one am very happy the Supreme Court decided States could not be penalized if they refused to expand Medicaid rolls.


PiedType said...

"Entitlements" galls me in ways I can't describe, even though it is technically correct. I don't much care for "safety net" either. Both make me sound like a poor, money-grubbing, ne'er-do-well who never worked a day in her life. We had a deal, a contract, with the government: we paid into the pool all our working lives, in exchange for which the government would start paying us back, plus interest, when we retired. We're talking "earned benefits," "contractual obligations," etc. Let's put the onus where it belongs.

Dick Klade said...

Pied has a good point; "safety net" also has a negative connotation for the benefit recipient. Because Medicare and Social Security are insurance programs, perhaps we should just call them that.

Medicaid is welfare, so it is neither an entitlement nor an insurance program.

By law, surplus social security receipts are invested in interest-bearing government bonds. Thus the treasury is borrowing from the trust fund as it would from any entity that buys government bonds. Bond proceeds are used to finance general federal programs, including defense expenditures which have been a heavy burden in the past 10 years.

Back when the Obama administration pushed through a suspension of part of the payroll tax that funds Social Security, I wrote that this was a serious mistake. The idea was to put stimulus money into the hands of workers. That's ok, but as I said it is easy to lower a tax and very hard to restore it. Failure to collect those funds weakened social security. The administration denies that, but we have yet to see how the treasury will make up the income difference as promised. The payroll tax forgiveness already has been extended once, and now Democrats are proposing another extension. We need to make Social Security sustainable for future generations of retirees, not weaken it by lowering the revenue that finances the system.

I agree with Dianne that the medical programs are the most serious problem. There must be cuts in Medicare and Medicaid expenses and added revenue for Medicare to make these programs viable. I don't see any serious reason not to raise the Medicare enrollment age to 66. That would help a lot.

Dianne, you can expect to have more neighbors from Michigan rather soon. Michigan had the lowest tax rates for retirees of any state in the U.S. until last year. The new governor proposed and got a huge cut in those benefits. The savings were used to eliminate a tax on businesses. Many are predicting a fairly large exodus of retirees once they see what happened to their real estate and state income taxes a few months from now when they file 2012 returns.

We're staying put, but I don't appreciate the big Michigan hit on elders. We have no time or any good way to replace the lost cash.

Anonymous said...

We need to do something to end the confusion between reducing the federal debt and making social security and medicare self-sustaining. Sometimes I think the politicians deliberately cloud the distinctions.

joared said...

I agree with Schmidley that we do need to address the pharma and ins. companies if we want to make any just reasonable changes to health care costs. I keep saying that as a provider, all the middle people -- depending on where I work -- between what Medicare pays for my services and the portion I actually receive is considerable. Some of these "middle people" apply significant markups for their portion.

Clearly too many Congresses and administrations have been negligent in caring for SS solvency.