The year is 1991 and the country of Hungary is restructuring itself after the fall of the Soviet Empire. The scars that are left on Hungary's people include a dependency on a paternal government. The Soviet Union provided a generous social safety net coupled with harsh penalties for those caught cheating. When Hungary became independent, the people clung to their safety net, but they wanted it without the harsh tactics and punishments of the communists. The politicians, being politicians, promised the people whatever they wanted, no matter how dire a future it might create. What happened over the next 15 years would destroy the fledgling country and force it into bankruptcy. I now fear the same thing will happen here, in the United States of America.Hungary's system was set up, as ours is, to provide for people in their old age and to help those that were too disabled to work. When Hungary was released from communism's grasp, the average age of it's disabled and retired people was 62, it is now 48. The politicians, smelling a good issue, promised more and more to a constituency that grew large as more and more of them joined the government disabled list. One politician even went so far as to promise and then deliver a "13th month" of pay for the retired and disabled. Politicians that opposed adding onto the programs were run over by the large constituency and simply lost. Soon 10 million of Hungary's 30 million people we're no longer working and the burden on the government grew and grew as did the taxes on those stupid enough to continue working. Because of the burden on the masses, people spent less, invested less, and saved less. Soon the outgoing money vastly surpassed the money coming in and Hungary fell in to the deep, dark pit of bankruptcy. It is now hanging on only with loans from the International Monetary Fund and is struggling to get it's people to understand the cuts and changes it must make to survive.
As the "Baby Boomers" age, a great deal of them are finding themselves without pensions and without retirement funds. With no money or health insurance and with a declining economy squeezing them out of the workplace, many of them are turning to exaggerating their health problems. With liberalism taking a strong hold, particularly in the Social Services sector, claims for disability are being granted without much contesting. Word gets out fast and with the help of the Internet, aging boomers are working their way into the system and onto the disabled list.
Here in Michigan, we are especially hard hit by the sagging economy. We are now at 15.2% unemployment, the highest in the nation, and on pace to break all unemployment records dating back to the Great Depression. This has created even more incentive for people to game the system and the results are in. Over the past ten years, the amount of people on public insurance that are under 65 in Michigan has increased from 11% to 22% according to the Wall Street Journal. It doesn't take a genius to figure out that we cannot continue to fund these increases. The state of Michigan is now $1.4 billion in the red with another $2 billion owed the Feds for just unemployment benefits. Michigan has 1.84 million people on some sort of Social Security and with the Baby Boomers entering retirement age that number is sure to go up. We now have 274,000 people in Michigan on disability and that number is climbing the fastest of any group requesting Social Security assistance. With increased disability claims, an aging Baby boomer population, increased National Debt liabilities and decreasing GDP, it's hard to see a way out. When the amount of people on Social Security crosses 33%, it will take 2 people to cover the costs of 1 Social Security recipient. If we don't find a way to stop these increases, it's hard to see how this country will survive having both that kind of debt load and that percentage of a constituency that will refuse any cuts. Move over, Hungary, the U.S. is right behind you, following your lead. H.C.
4 comments:
Can't wait to get my own scooter chair and start clogging up the aisles at the local Meijer's.
Hey Hack,
With all the people getting on disability, you might want to get that chair reserved before they run out. Great comment, thanks for the early morning grin:)
I really have to believe our elected officials won't allow this to happen. But I'm not holding my breath.
Republicans have convinced people that sacrficing for their country and investing in its future (along with caring for the millions of poor and stuggling citizens) through restorative taxation is a practice taken directly out of the evil Soshulizum playbook. Meanwhile, those weak ass Democrats are allowing that fear/hate mongering to go unchallenged. They seem to forget that WWII was powered a great deal by people's sacrifices. Giving up on certain products (rubber, silk, metal), buying war bonds, and focusing less on personal consumption is what greatly contributed to advancing the country's interests. Sure, a bunch of people got rich or stayed rich in the process. That's the nature of the beast. But all the industry of the war boosted this economy massively. It set the stage for the U.S. to become one of the world's superpowers.
Hey Dre,
What the Hungary example shows us IMO is that the politicians either can not or will not make the kind of self sacrifice that your pointing to in the Great Generation. The constituency of the entitled (retired/disabled) is going to grow to a point where they will not allow themseves to be cut. Who shows up at the polls the best? The people who fear being cut-they are the most motivated. Unfortunately, what the politicians fear most is a motivated opposition. If we blend the retired, who are increasing every day due to the aging of the massive Baby Boomer generation with a younger pre-retirement population abusing a disability social safety net, you soon find yourself with a large segment of the population that doesn't work and is entirely dependent on government entitlements. That constituency is going to be a major roadblock against any politician doing the right thing by restricting access to disability (which will be viewed as heartless) or lowering benefits for the elderly or increasing the age of eligibility. (which will be fought tooth and nail by the AARP who is already one of the most powerful lobbies.) The only other choice is to increase taxes, which will lower the median wealth of the population and start an economic death spiral. Long story short-two people can not feasibly support one person without a serious reduction in standard of living. Mark my words Dre, this WILL be the next economic crisis.
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