Fwd: usa broke?

Thu Sep 23 13:20:53 2004

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Begin forwarded message:

> From: Clark Santos <clarksantos@argolink.net>
> Date: September 23, 2004 12:05:39 PM CDT
> To: Remembrances of Austin Ghetto <GHETTO2@LISTS.WHATHELPS.COM>,  
> austin-ghetto-list@pairlist.net
> Subject: Fwd: usa broke?
>
>
>
> Begin forwarded message:
>
>> From: Clark Santos <clarksantos@argolink.net>
>> Date: September 23, 2004 11:59:25 AM CDT
>> To: Remembrances of Austin Ghetto <GHETTO2@LISTS.WHATHELPS.COM>,  
>> austin-ghetto-list@pairlist.net
>> Subject: Re: usa broke?
>>
>> It seems logical we should encourage the politicians to double or  
>> triple the Social Security benefits and lower medicare eligibility to  
>> age 60, to benefit every one on the ghetto 2 and even the ghetto  
>> pair-list. According to my calculations as a CPA, there is plenty of  
>> cash to cover the additional government expense, even considering the  
>> current administrations fuckups, to get us to December 21, 2012. Need  
>> I say more....
>>
>> We could all observe the Mayan event together at the big Sagittarius  
>> Birthday Party in Real de Catorce. When Ed, Humberto, and I will be  
>> 70 (Fontaine less, Igor more). Even our younger non retired friends  
>> and relatives can all come since they won't be afraid to take off  
>> from work.
>>
>> El Patron
>>
>> p.s. You can't start planning a party to quickly, I might even write  
>> Lucano a hot check for several busses to hall everybody we know down,  
>> Rodger and Bauldauf could handle the Austin ones. Imagine seeing the  
>> end of some kind of error on peyote !!
>>                                                                        
>>         !!!!
>>                                                                        
>>               !!!!!!
>> On Sep 23, 2004, at 10:32 AM, telebob wrote:
>>
>>> Obviously this is not an election year issue. Yet it should be.
>>>
>>> http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/ 
>>> 2004/09/12
>>> /MNG2S8NOI21.DTL
>>>
>>> Washington -- The first of the 77 million-strong Baby Boom  
>>> generation will
>>> begin to retire in just four years. The economic consequences of this
>>> fact -- as scary as they are foreseeable -- are all but ignored by  
>>> President
>>> Bush and Democratic challenger John Kerry, who discuss just about  
>>> everything
>>> but the biggest fiscal challenge of modern times.
>>> Yet whoever wins the 2004 race will become the first U.S. president  
>>> to
>>> confront what sober-minded experts across the political spectrum  
>>> describe as
>>> an impending "fiscal catastrophe" lying right around the corner.
>>> Astronomical federal debt, coming due as the Baby Boom generation  
>>> collects
>>> Medicare, Medicaid and Social Security, is enormous enough to swamp  
>>> the
>>> promises both candidates are making to voters, whether for tax cuts,  
>>> health
>>> care, 40,000 more troops or anything else.
>>> "Chilling" is the word U.S. Comptroller General David Walker uses to
>>> describe the budget outlook.
>>> "The long-term budget projections are just horrifying," added Leonard
>>> Burman, co-director of tax policy for the Urban Institute. "I've got  
>>> four
>>> children and it really disturbs me. I just think it's irresponsible  
>>> what
>>> we're doing to them."
>>> What these numbers portend are crippling tax increases on workers,  
>>> slashed
>>> benefits for retirees, gutted budgets for homeland security,  
>>> highways,
>>> research and everything else, and an economic decline or a financial
>>> collapse that devastates the middle class, as happened recently in
>>> debt-strapped Argentina. Eventually, analysts insist, someone --  
>>> today's
>>> children or tomorrow's elderly or both -- will pay this debt.
>>> Traditional budget measures used by politicians and the press give  
>>> what
>>> Walker and many others call a highly misleading view of the U.S.  
>>> debt. These
>>> focus on publicly held debt already incurred, now at $4.5 trillion,  
>>> or
>>> 10-year budget forecasts like the one released last week by the
>>> Congressional Budget Office showing a record $422 billion deficit  
>>> this year
>>> and a $2.3 trillion 10- year deficit.
>>> 'Fiscal gap' in the trillions
>>> But these figures, worrisome enough, are deceptive because they  
>>> ignore
>>> future liabilities such as Social Security and Medicare payments to  
>>> the Baby
>>> Boomers. An array of government and private analysts put the actual  
>>> U.S.
>>> "fiscal gap," which means all future receipts minus all future  
>>> obligations,
>>> at $40 trillion (Government Accountability Office) to $72 trillion  
>>> (Social
>>> Security Board of Trustees).
>>> These are not sums, but present-value figures, heavily discounted to  
>>> show in
>>> today's dollars what it would cost to pay off the debt immediately.  
>>> The
>>> International Monetary Fund estimates the gap at $47 trillion, the  
>>> Brookings
>>> Institution at $60 trillion.
>>> "To give you idea how big the problem is," said Laurence Kotlikoff,
>>> economics chairman at Boston University, who has written extensively  
>>> on the
>>> subject, to close a $51 trillion fiscal gap, "you'd have to have an
>>> immediate and permanent 78 percent hike in the federal income tax."
>>> These obligations are not imaginary. And unlike the 1980s and 1990s,
>>> economic growth cannot bail out the government because the Baby Boom
>>> retirement is at hand. Those born in 1946 will reach age 62 in 2008,
>>> allowing them to take early retirement and receive Social Security  
>>> benefits.
>>> "It's a number that's so large that people find it implausible, and  
>>> so they
>>> don't think about it," said Alan Auerbach, a UC Berkeley economist  
>>> who
>>> studies the issue and consults for the Kerry campaign. "But it's  
>>> based
>>> simply on the projections we have for Social Security and Medicare.  
>>> People
>>> aren't making these numbers up."
>>> A pathbreaking study by Jagadeesh Gokhale of the Federal Reserve  
>>> Bank of
>>> Cleveland and Kent Smetters, a former deputy assistant secretary at  
>>> the
>>> Treasury -- commissioned by former Treasury Secretary Paul O'Neill --
>>> estimated a $44 trillion fiscal gap. It laid out a few painful  
>>> options on
>>> how to meet the liabilities:
>>> -- More than double the payroll tax, immediately and forever, from  
>>> 15.3
>>> percent of wages to nearly 32 percent;
>>> -- Raise income taxes by two-thirds, immediately and forever;
>>> -- Cut Social Security and Medicare benefits by 45 percent,  
>>> immediately and
>>> forever;
>>> -- Or eliminate forever all discretionary spending, which includes  
>>> the
>>> military, homeland security, highways, courts, national parks and  
>>> most of
>>> what the federal government does outside of the transfer of payments  
>>> to the
>>> elderly.
>>> Such corrective actions grow more severe each year. Waiting just  
>>> until 2008,
>>> the end of the next presidency, would mean raising the payroll tax  
>>> to 33. 5
>>> percent instead of 32 percent, the study found.
>>> Gokhale said that fresh numbers from the Medicare trustees show the  
>>> fiscal
>>> gap has since grown to $72 trillion, $10 trillion of that for Social
>>> Security and an astonishing $62 trillion for Medicare, the  
>>> government health
>>> care program for the elderly.
>>> "The long-term picture is pretty bad," Gokhale said.
>>> Election's absent issue
>>> These numbers are seldom discussed, least of all in the 2004  
>>> presidential
>>> race. Ironically, as the Baby Boom retirement has neared -- and the  
>>> remedies
>>> grow more painful -- political discussion has faded. Gone is Ross  
>>> Perot's
>>> anti-deficit crusade. Gone is Newt Gingrich's call for Medicare  
>>> restraint.
>>> Gone is Al Gore's "lockbox" for the Social Security surplus.
>>> Instead, Kerry and Bush promise only to halve the current deficit in  
>>> four
>>> years -- "both (of them) relying on pretty imaginative accounting to  
>>> get
>>> there" said Burman -- while promising more spending and more tax  
>>> cuts.
>>> Yet today's deficit is a tiny fraction of the government's actual
>>> liabilities, which are so daunting they promise to make Bush's tax  
>>> cuts a
>>> distant memory and Kerry's health care plan a fantasy.
>>> While Bush and Kerry propose to address parts of the problem, "the  
>>> numbers
>>> don't add up on either side," Walker said.
>>> Medicare makes up the bulk of these liabilities, driven mainly by the
>>> expanding elderly population and rapidly rising health costs. Social
>>> Security, more often discussed as a looming problem, actually  
>>> accounts for
>>> far less in future debt.
>>> While Congress squabbles over whether the administration hid the new
>>> prescription drug benefit's 10-year cost -- pegged by the White  
>>> House at
>>> $534 billion versus CBO's $395 billion -- the actual liability  
>>> incurred by
>>> the new drug benefit is estimated at $8 trillion to $12 trillion.
>>> Kerry and Democrats call the drug benefit inadequate. They would do  
>>> little
>>> to restrain Medicare costs other than allowing the importation of  
>>> price-
>>> controlled drugs from Canada.
>>> Bush and Republicans added the drug benefit along with costly  
>>> subsidies to
>>> providers. Even optimists do not expect their modest market reforms  
>>> to cut
>>> costs.
>>> Promises, promises
>>> Kerry has promised not to cut Social Security. "I will not cut  
>>> benefits," he
>>> said recently. "I will not raise the retirement age."
>>> Democrats generally cite "trust fund" numbers that show Social  
>>> Security - -
>>> and Medicare to a lesser extent -- remaining solvent for decades,  
>>> even
>>> though government officials repeatedly call the numbers an accounting
>>> fiction. CBO director Douglas Holzt-Eakin last week said the funds  
>>> contain
>>> nothing but "electronic chits" that measure government obligations to
>>> itself.
>>> Bush proposes adding private accounts to Social Security for younger
>>> workers, which could reduce future government obligations, but would  
>>> do so
>>> by diverting a portion of the payroll tax, adding $1 trillion to the
>>> short-term deficit. That might have been feasible when Bush took  
>>> office in
>>> 2000 facing a projected $5.6 trillion surplus, but the surplus is  
>>> gone.
>>> Similar plans in Congress that instead rely more on benefit cuts  
>>> have gone
>>> nowhere.
>>> "The country's absolutely broke, and both Bush and Kerry are being
>>> irresponsible in not addressing this problem," Kotlikoff said. "This
>>> administration and previous administrations have set us up for a  
>>> major
>>> financial crisis on the order of what Argentina experienced a couple  
>>> of
>>> years ago."
>>> If this sounds far-fetched, former Bush Treasury Undersecretary  
>>> Peter Fisher
>>> and former Clinton Treasury Secretary Robert Rubin both alluded to  
>>> such a
>>> scenario at a June budget forum in Washington.
>>> "Having been involved in markets for a long, long time," Rubin said,  
>>> "I can
>>> tell you these things can change unexpectedly and without warning,"
>>> referring to potential financial market reactions to the U.S. fiscal
>>> position.
>>> Fisher warned of a "pivot point" when "the collective wisdom of bond  
>>> traders
>>> thinks that the deficit horizon has turned," adding, "Both Bob and I  
>>> are
>>> nervous."
>>> The world has seen fiscal imbalances of this sort before, in Asia  
>>> and Russia
>>> in the late 1990s and more recently in South America. Such financial  
>>> panics
>>> can be triggered by any number of events -- a flight from Treasury  
>>> bonds by
>>> the foreigners who buy much of the U.S. debt, for example -- if  
>>> investors'
>>> views of the market, which are focused on the short term, suddenly  
>>> change.
>>> "If you look at financial crises, they occur seemingly overnight,"  
>>> said
>>> Kotlikoff. "More and more pieces of straw drop on the camel's back,  
>>> and all
>>> of a sudden, the camel collapses. ... Nobody knew exactly what day  
>>> Argentina
>>> was going to go south or exactly what day Russia was going to  
>>> default. The
>>> timing is up for grabs."
>>> But early signs of a problem are now appearing, analysts said,  
>>> starting with
>>> the mounting deficits under Bush caused not just by the recession and
>>> terrorist attacks, but also by enormous spending increases and tax  
>>> cuts. The
>>> brief window of surpluses that appeared during the late 1990s  
>>> economic boom
>>> offered a chance to address long-range liabilities, but those  
>>> surpluses now
>>> are gone.
>>> "Maybe the public doesn't want to hear it," Kotlikoff said. "Maybe
>>> politicians think ... the American public can't understand the truth  
>>> or hear
>>> the truth or bear the truth. I think this is garbage. I think that  
>>> people
>>> care about their kids and grandchildren and need to know the dangers  
>>> facing
>>> them --
>>> and us."
>>>

--Apple-Mail-5--459082651
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	charset=US-ASCII

Begin forwarded message:

<excerpt><bold><fontfamily><param>Helvetica</param><color><param>0000,0000,0000</param><smaller><smaller><smaller>From:
</smaller></smaller></smaller></color></fontfamily></bold><fontfamily><param>Helvetica</param><smaller><smaller><smaller>Clark
Santos <<clarksantos@argolink.net>

<bold><color><param>0000,0000,0000</param>Date:
</color></bold>September 23, 2004 12:05:39 PM CDT

<bold><color><param>0000,0000,0000</param>To:
</color></bold>Remembrances of Austin Ghetto
<<GHETTO2@LISTS.WHATHELPS.COM>, austin-ghetto-list@pairlist.net

<bold><color><param>0000,0000,0000</param>Subject: </color>Fwd: usa
broke?

</bold></smaller></smaller></smaller></fontfamily>

Begin forwarded message:

<excerpt><bold><fontfamily><param>Helvetica</param><color><param>0000,0000,0000</param><smaller><smaller><smaller>From:
</smaller></smaller></smaller></color></fontfamily></bold><fontfamily><param>Helvetica</param><smaller><smaller><smaller>Clark
Santos <<clarksantos@argolink.net>

<bold><color><param>0000,0000,0000</param>Date:
</color></bold>September 23, 2004 11:59:25 AM CDT

<bold><color><param>0000,0000,0000</param>To:
</color></bold>Remembrances of Austin Ghetto
<<GHETTO2@LISTS.WHATHELPS.COM>, austin-ghetto-list@pairlist.net

<bold><color><param>0000,0000,0000</param>Subject: </color>Re: usa
broke?

</bold></smaller></smaller></smaller></fontfamily>

It seems logical we should encourage the politicians to double or
triple the Social Security benefits and lower medicare eligibility to
age 60, to benefit every one on the ghetto 2 and even the ghetto
pair-list. According to my calculations as a CPA, there is plenty of
cash to cover the additional government expense, even considering the
current administrations fuckups, to get us to December 21, 2012. Need
I say more....

We could all observe the Mayan event together at the big
<color><param>FFFD,161D,161D</param>Sagittarius Birthday Party</color>
in Real de Catorce. When Ed, Humberto, and I will be 70 (Fontaine
less, Igor more). Even our younger non retired friends and relatives
can all come since they won't be afraid to take off from work.  

El Patron

p.s. You can't start planning a party to quickly, I might even write
Lucano a hot check for several busses to hall everybody we know down,
Rodger and Bauldauf could handle the Austin ones. Imagine seeing the
end of some kind of error on peyote
<color><param>494F,49A8,FFFD</param>!!</color>

<color><param>FFFD,4001,F6B1</param>!!!!</color>

<color><param>FFFD,87CF,237B</param>!!!!!!</color>

On Sep 23, 2004, at 10:32 AM, telebob wrote:

<excerpt>Obviously this is not an election year issue. Yet it should
be.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/09/12

/MNG2S8NOI21.DTL

Washington -- The first of the 77 million-strong Baby Boom generation
will

begin to retire in just four years. The economic consequences of this

fact -- as scary as they are foreseeable -- are all but ignored by
President

Bush and Democratic challenger John Kerry, who discuss just about
everything

but the biggest fiscal challenge of modern times.

Yet whoever wins the 2004 race will become the first U.S. president to

confront what sober-minded experts across the political spectrum
describe as

an impending "fiscal catastrophe" lying right around the corner.

Astronomical federal debt, coming due as the Baby Boom generation
collects

Medicare, Medicaid and Social Security, is enormous enough to swamp the

promises both candidates are making to voters, whether for tax cuts,
health

care, 40,000 more troops or anything else.

"Chilling" is the word U.S. Comptroller General David Walker uses to

describe the budget outlook.

"The long-term budget projections are just horrifying," added Leonard

Burman, co-director of tax policy for the Urban Institute. "I've got
four

children and it really disturbs me. I just think it's irresponsible
what

we're doing to them."

What these numbers portend are crippling tax increases on workers,
slashed

benefits for retirees, gutted budgets for homeland security, highways,

research and everything else, and an economic decline or a financial

collapse that devastates the middle class, as happened recently in

debt-strapped Argentina. Eventually, analysts insist, someone --
today's

children or tomorrow's elderly or both -- will pay this debt.

Traditional budget measures used by politicians and the press give what

Walker and many others call a highly misleading view of the U.S. debt.
These

focus on publicly held debt already incurred, now at $4.5 trillion, or

10-year budget forecasts like the one released last week by the

Congressional Budget Office showing a record $422 billion deficit this
year

and a $2.3 trillion 10- year deficit.

'Fiscal gap' in the trillions

But these figures, worrisome enough, are deceptive because they ignore

future liabilities such as Social Security and Medicare payments to
the Baby

Boomers. An array of government and private analysts put the actual
U.S.

"fiscal gap," which means all future receipts minus all future
obligations,

at $40 trillion (Government Accountability Office) to $72 trillion
(Social

Security Board of Trustees).

These are not sums, but present-value figures, heavily discounted to
show in

today's dollars what it would cost to pay off the debt immediately. The

International Monetary Fund estimates the gap at $47 trillion, the
Brookings

Institution at $60 trillion.

"To give you idea how big the problem is," said Laurence Kotlikoff,

economics chairman at Boston University, who has written extensively
on the

subject, to close a $51 trillion fiscal gap, "you'd have to have an

immediate and permanent 78 percent hike in the federal income tax."

These obligations are not imaginary. And unlike the 1980s and 1990s,

economic growth cannot bail out the government because the Baby Boom

retirement is at hand. Those born in 1946 will reach age 62 in 2008,

allowing them to take early retirement and receive Social Security
benefits.

"It's a number that's so large that people find it implausible, and so
they

don't think about it," said Alan Auerbach, a UC Berkeley economist who

studies the issue and consults for the Kerry campaign. "But it's based

simply on the projections we have for Social Security and Medicare.
People

aren't making these numbers up."

A pathbreaking study by Jagadeesh Gokhale of the Federal Reserve Bank
of

Cleveland and Kent Smetters, a former deputy assistant secretary at the

Treasury -- commissioned by former Treasury Secretary Paul O'Neill --

estimated a $44 trillion fiscal gap. It laid out a few painful options
on

how to meet the liabilities:

-- More than double the payroll tax, immediately and forever, from 15.3

percent of wages to nearly 32 percent;

-- Raise income taxes by two-thirds, immediately and forever;

-- Cut Social Security and Medicare benefits by 45 percent,
immediately and

forever;

-- Or eliminate forever all discretionary spending, which includes the

military, homeland security, highways, courts, national parks and most
of

what the federal government does outside of the transfer of payments
to the

elderly.

Such corrective actions grow more severe each year. Waiting just until
2008,

the end of the next presidency, would mean raising the payroll tax to
33. 5

percent instead of 32 percent, the study found.

Gokhale said that fresh numbers from the Medicare trustees show the
fiscal

gap has since grown to $72 trillion, $10 trillion of that for Social

Security and an astonishing $62 trillion for Medicare, the government
health

care program for the elderly.

"The long-term picture is pretty bad," Gokhale said.

Election's absent issue

These numbers are seldom discussed, least of all in the 2004
presidential

race. Ironically, as the Baby Boom retirement has neared -- and the
remedies

grow more painful -- political discussion has faded. Gone is Ross
Perot's

anti-deficit crusade. Gone is Newt Gingrich's call for Medicare
restraint.

Gone is Al Gore's "lockbox" for the Social Security surplus.

Instead, Kerry and Bush promise only to halve the current deficit in
four

years -- "both (of them) relying on pretty imaginative accounting to
get

there" said Burman -- while promising more spending and more tax cuts.

Yet today's deficit is a tiny fraction of the government's actual

liabilities, which are so daunting they promise to make Bush's tax
cuts a

distant memory and Kerry's health care plan a fantasy.

While Bush and Kerry propose to address parts of the problem, "the
numbers

don't add up on either side," Walker said.

Medicare makes up the bulk of these liabilities, driven mainly by the

expanding elderly population and rapidly rising health costs. Social

Security, more often discussed as a looming problem, actually accounts
for

far less in future debt.

While Congress squabbles over whether the administration hid the new

prescription drug benefit's 10-year cost -- pegged by the White House
at

$534 billion versus CBO's $395 billion -- the actual liability
incurred by

the new drug benefit is estimated at $8 trillion to $12 trillion.

Kerry and Democrats call the drug benefit inadequate. They would do
little

to restrain Medicare costs other than allowing the importation of
price-

controlled drugs from Canada.

Bush and Republicans added the drug benefit along with costly
subsidies to

providers. Even optimists do not expect their modest market reforms to
cut

costs.

Promises, promises

Kerry has promised not to cut Social Security. "I will not cut
benefits," he

said recently. "I will not raise the retirement age."

Democrats generally cite "trust fund" numbers that show Social
Security - -

and Medicare to a lesser extent -- remaining solvent for decades, even

though government officials repeatedly call the numbers an accounting

fiction. CBO director Douglas Holzt-Eakin last week said the funds
contain

nothing but "electronic chits" that measure government obligations to

itself.

Bush proposes adding private accounts to Social Security for younger

workers, which could reduce future government obligations, but would
do so

by diverting a portion of the payroll tax, adding $1 trillion to the

short-term deficit. That might have been feasible when Bush took
office in

2000 facing a projected $5.6 trillion surplus, but the surplus is gone.

Similar plans in Congress that instead rely more on benefit cuts have
gone

nowhere.

"The country's absolutely broke, and both Bush and Kerry are being

irresponsible in not addressing this problem," Kotlikoff said. "This

administration and previous administrations have set us up for a major

financial crisis on the order of what Argentina experienced a couple of

years ago."

If this sounds far-fetched, former Bush Treasury Undersecretary Peter
Fisher

and former Clinton Treasury Secretary Robert Rubin both alluded to
such a

scenario at a June budget forum in Washington.

"Having been involved in markets for a long, long time," Rubin said,
"I can

tell you these things can change unexpectedly and without warning,"

referring to potential financial market reactions to the U.S. fiscal

position.

Fisher warned of a "pivot point" when "the collective wisdom of bond
traders

thinks that the deficit horizon has turned," adding, "Both Bob and I
are

nervous."

The world has seen fiscal imbalances of this sort before, in Asia and
Russia

in the late 1990s and more recently in South America. Such financial
panics

can be triggered by any number of events -- a flight from Treasury
bonds by

the foreigners who buy much of the U.S. debt, for example -- if
investors'

views of the market, which are focused on the short term, suddenly
change.

"If you look at financial crises, they occur seemingly overnight," said

Kotlikoff. "More and more pieces of straw drop on the camel's back,
and all

of a sudden, the camel collapses. ... Nobody knew exactly what day
Argentina

was going to go south or exactly what day Russia was going to default.
The

timing is up for grabs."

But early signs of a problem are now appearing, analysts said,
starting with

the mounting deficits under Bush caused not just by the recession and

terrorist attacks, but also by enormous spending increases and tax
cuts. The

brief window of surpluses that appeared during the late 1990s economic
boom

offered a chance to address long-range liabilities, but those
surpluses now

are gone.

"Maybe the public doesn't want to hear it," Kotlikoff said. "Maybe

politicians think ... the American public can't understand the truth
or hear

the truth or bear the truth. I think this is garbage. I think that
people

care about their kids and grandchildren and need to know the dangers
facing

them --

and us."

</excerpt></excerpt></excerpt>
--Apple-Mail-5--459082651--