Wednesday, April 16, 2014

Why our economy is as screwed as our politics

I know this article from CNS News has been highlighted on the Drudge Report today, and mentioned on a number of blogs, but I think it's worth mentioning it here too.  It demonstrates, clearly, concisely and in irrefutable arithmetical fact, precisely why our economy - and our politics - are neck-deep in the dwang.  What's more, they're going to stay there until our feckless politicians stop making promises they can't afford to keep, and start living within the nation's means.  I don't foresee that happening with any of the current crop in Washington.

Here are a couple of key quotes from the article.

86M Full-Time Private-Sector Workers Sustain 148M Benefit Takers

. . .

The 86,429,000 Americans who worked full-time, year-round in the private sector, included 77,392,000 employed as wage and salary workers for private-sector enterprises and 9,037,000 who worked for themselves. (There were also approximately 52,000 who worked full-time, year-round without pay in a family enterprise.)

At first glance, 86,429,000 might seem like a healthy population of full-time private-sector workers. But then you need to look at what they are up against.

The Census Bureau also estimates the size of the benefit-receiving population.

. . .

There were 108,592,000 people in the fourth quarter of 2011 who lived in a household that included people on "one or more means-tested program."

Those 108,592,000 outnumbered the 86,429,000 full-time private-sector workers who inhabited the United States in 2012 by almost 1.3 to 1.

. . .

There were 49,901,000 people receiving Social Security in the fourth quarter of 2011, and 46,440,000 receiving Medicare. There were also 5,098,000 getting unemployment compensation.

And there were also, 3,178,000 veterans receiving benefits and 34,000 veterans getting educational assistance.

All told, including both the welfare recipients and the non-welfare beneficiaries, there were 151,014,000 who "received benefits from one or more programs" in the fourth quarter of 2011. Subtract the 3,212,000 veterans, who served their country in the most profound way possible, and that leaves 147,802,000 non-veteran benefit takers.

The 147,802,000 non-veteran benefit takers outnumbered the 86,429,000 full-time private sector workers 1.7 to 1.

How much more can the 86,429,000 endure?

As more baby boomers retire, and as Obamacare comes fully online — with its expanded Medicaid rolls and federally subsidized health insurance for anyone earning less than 400 percent of the poverty level — the number of takers will inevitably expand. And the number of full-time private-sector workers might also contract.

Eventually, there will be too few carrying too many, and America will break.

There's more at the link.  You really should read the whole thing.

Those of us who understand reality had better be preparing now for what will happen when it bites us all in the ass - because it will.  Mathematics is an exact, precise science.  The figures cited above are mathematical reality.  So is their inevitable consequence, no matter how much our politicians might like to ignore reality and pretend it'll never happen.



Rolf said...

Yup. It's a numbers game. And the pols are abusing the numbers for their own advantage, and lying to us about it, hoping to get a chair before the music stops. It's simple, if painful, to fix, but the longer they put it off the uglier it will be.
For some, of course, that is the goal. You can't "save" a strong system, only a failing one, by riding in with "free" government money to save the day.
I hope the right people get hung come judgement day.

Anonymous said...

Isn't there an almost 1:1 relationship between the folks receiving Social Security and the folks receiving Medicare? Mathematics is an exact, precise science... but this isn't math, it's just grandstanding addition by an author too partisan to think about what goes in their columns. For that matter, why kowtow to "veterans, who served their country in the most profound way possible", most of them never in combat, and ignore the much more significant contributions to the economy of all those Social Security recipients? Why is someone who's been a fireman for 40 years less valuable than the guy who hands out boots at Fort Bragg?

Old NFO said...

Yep, we're screwed... 2014 is our LAST chance to change this. IMHO...

Peter said...

@Anonymous at 12:30 AM: The numbers aren't from the author, or from CNS News, but from the Census Bureau. One may question how the author added them up, but I think overall the message remains as clear as daylight.

There are now more people drawing benefits and payments from the government than there are people earning their own living (not being paid by government) and paying taxes on that living to the government. Furthermore, the monetary value of the benefits being handed out so freely to 'takers' is increasing year after year, as is the tax burden on the 'makers' - those who earn the money that is taxed to pay the benefits.

That's simply unsustainable in the long term.

Roger.45 said...


Divemedic said...

The statistics used here are misleading. The numbers are from the Census bureau, but they are being twisted here. The two sets of numbers are not independent.

For example: My mother, who is receiving Social Security and Medicaid, lives in my home with me. I am a tax paying wage earner and thus one of the 86 million, but since I have a person in my household who is part of two means tested programs, we both count as part of the 147 million people who are in a household with a person receiving benefits.

This means that my household has contributed to the numbers in a 1:2 ratio. This skews the numbers, and I am guessing that this is a pretty common event. At least common enough to be statistically significant.

Think about this: a family of four has a single wage earner father who works full time as a Doctor, a wife that sells real estate part time, and three children. They are taking care of a grand parent who lives in the home with them. That works out to one full time year round worker, and six people who live in a household with a means tested recipient.

As I said, misleading use of the numbers.

Paul said...

Mixed households could skew the numbers. With out analysis of the source numbers you would have issues identifying anything.

even though social security is a paid in plan and military was pay for a sacrifice the only number the government considers sacrosanct is the unearned welfare that is take from us all.

No, I think the biggest problem is the lack of the rule of law for the government class. That is the major issue right now.

I don't think we can vote ourselves out of this mess as the biggest part of government is unelected and self selected.

I would expect we will see inflation take off, then they will issue new money to replace that at which time they will be able to pay off all outstanding debt.

Once the outstanding debt holders start to call their notes the process will accelerate to the end point.

Glenn B said...

I would be considered a Benefit Taker by that author, as I suppose would every federal government retiree. He would be wrong though at least regarding some federal agents. Instead of being a Benefit Taker, I made money for the government, over the course of my 32 year career, that amounted to more than my total pensionable and non-pensionable salary, all of my benefits and 20 years worth of projected pension earnings. It was much more at that.

I did that by way of making monetary seizures, mostly from drug smugglers or their associates who laundered money for the drug smugglers. In fact, when I figured it out, I estimated that I seized enough money to have also partly paid, in a good amount, the salary of another federal employee as I seized at least 2 - 2.5 times my total pensionable earnings plus my estimated pension over 20 years to come.

Even though my career lasted 32 years, and I made some seizures while with other agencies, the money I specifically am talking about was seized only during my stint with the U.S. Customs Service, and only during a period covering about 10 years while in Customs. I was, at best, a slightly above average investigator. many others did likewise regarding seizures and many seized much more - and I really do mean from drug smugglers as in cartel money - not money from some street pushers.

Of course, the government had the perfect solution for the U.S. Customs Service, Office of Investigations, seizing all that drug money. They did away with the Customs Service. The G then put the Customs Agents into ICE along with Immigration agents (please do not tell me that the current CBP or ICE are the same as the former U.S. Customs Service, they definitely are not). Then Tom Ridge gave away almost all of our money laundering investigative authority to the FBI and the FBI basically destroyed the largest ever (at the time), and highest seizure producing (at the time and maybe still), money laundering case ever by sitting on it and doing nothing.

Oh well, at least it is nice for me to realize I was not a benefit taking slug throughout my career.

All he best,
Glenn B

CarlS said...

Numbers? From the Census Bureau? Thought to be accurate and reliable? From the Census Bureau?

Come again?

Stu Garfath said...

What happened before is definitely going to happen again, they can only kick the can down the road so far, and the end of that road is well within sight.
As for the number crunchers, remember this.
'There are lies, damn lies, and statistics'.