where i agree with the dems

[Texas Contrarian]

I never thought I'd get a chance to type these words, but:

The article linked by WTF way back in past #15 is spot on!

And regarding a dissenting opinion:

Originally Posted by Mazomaniac

Here's why the theory doesn't hold up:

1. The timing is all wrong.

Johnson took office in 1963. The first unified budget, however, did not take hold until 1969 - the year Johnson left.

Johnson submitted the first unified budget to Congress in January of 1968. That was after all of the big social programs had already been introduced. It was also just six weeks before he announced his retirement from office. By the time Johnson submitted the first unified budget the gross federal debt had actually declined under his administration. The deficits from the Great Society programs were still years down the road. Johnson literally had nothing to hide.

If Johnson was really just trying to hide the deficit then he also did it at exactly the wrong time. Johnson only served under the '69 unified budget for four months. He gained nothing from it. None of his earlier budgets was affected by the change. It was actually Richard Nixon who was the big winner of this practice. The deficits really took off under Nixon and Ford, not Johnson. It was the Republicans who followed him that benefited from the new practice.

So Johnson didn't even start talking about a unified budget until more than four years into his presidency and he gained zilch by putting it into effect. He got nothing out of the deal. The timing just doesn't add up.

Whoa!

Back up and think about that statement for just a moment. You're arguing that Johnson had no motive for introducing the unified budget in early 1968, since he would not continue to serve as president for a long enough period to derive any significant political benefit therefrom. But in January 1968, he probably expected to cruise fairly handily to re-election. It was only in March that his prospects began to fall apart, and fall apart they did -- almost overnight. After LBJ turned in a very weak performance in the New Hampshire primary, Bobby Kennedy jumped into the race. Advisors to the Johnson camp thought the picture looked bleak and the president soon decided to hang it up. But does anyone seriously believe that he had not intended to benefit from unified budget adoption in subsequent years?

Politicians of both parties have been using this sort of legerdemain to make things seem a little better than they really are for more than four decades now. Maybe it fooled some people for a while -- but now, of course, the trick no longer works since there are no more SS "surpluses."

Originally Posted by charlestudor2005

The following article appeared today stating that SS will run out of money by 2037:

My Questions are:

1. Is SS really going to run out of money? Will the pols find another way to fund it?
2. If SS runs out of money, what will those retirees live on? Will they be kicked to the curb?

Since the SS "trust fund" is nothing more than a giant stack of IOUs, SS already has run out of money, at least insofar as the bills have to be paid with new Treasury debt issuance. With the burgeoning number of new retirees, the problem will just get worse. Until recently, it was expected that the "crossover point" (where SS outlays begin to exceed revenue) would not occur until around 2016 or 2017, but it's already occurred because of the rising unemployment rate.

I don't believe that retirees will ever be "kicked to the curb." Old people vote! There will probably be various adjustments to the way benefits are calculated, etc., and net benefits may not keep up with inflation over a long period of time, but I can't see politicians of either party completely reneging. People would start rioting in the streets, like in Greece.

They'll fund it the same way they've recently been funding everything else -- with borrowed money. When we find that the world does not have an unlimited appetite for Treasury notes and bonds, they'll just have the Fed expand its balance sheet and buy a few trillion more bucks worth of 'em. QE2, QE3, QE4, etc. When does it end?

If politicians never develop the discipline to reduce our huge budget deficits, the Federal Reserve will just create some new money and fill in the holes. What could possibly go wrong with that plan?

[WTF]

Originally Posted by CaptainMidnight

I never thought I'd get a chance to type these words, but:

The article linked by WTF way back in past #15 is spot on!

Right on brother!

Originally Posted by Mazomaniac

Unfortunately your little history doesn't make sense. It's actually the "history" as developed by the Republican Party in the late 80's to smack down rising support for spending on social programs.

.

Well Mazo, it hasn't worked with me. I think everything needs to be cut, Defense and SS spending.

What Johnson had proven was the theory of unintended consequences.

Nothing new there...from either party, just look at the report on the housing bubble that just came out.

I do think cuts need to be made to Medicare, the system was not set up for people living as long as they are. So I agree with the Repubs on that point. But only if you cut Defense spending. In other words unified cuts. I think both parties are slowly moving in that direction. What is is going to take is a leader that actually talks ALL sides into giving up something.


Great points btw.... I agree with almost everything you said except with what CM countered with. LBJ was doing what it took to get re-elected. Most might have needed a slide rule to figure out WTF was going on but LBJ didn't. Nobody else could of gotten the Civil Rights Leg. passed.

[Mazomaniac]

Originally Posted by CaptainMidnight

Back up and think about that statement for just a moment. You're arguing that Johnson had no motive for introducing the unified budget in early 1968, since he would not continue to serve as president for a long enough period to derive any significant political benefit therefrom. But in January 1968, he probably expected to cruise fairly handily to re-election. It was only in March that his prospects began to fall apart, and fall apart they did -- almost overnight. After LBJ turned in a very weak performance in the New Hampshire primary, Bobby Kennedy jumped into the race. Advisors to the Johnson camp thought the picture looked bleak and the president soon decided to hang it up. But does anyone seriously believe that he had not intended to benefit from unified budget adoption in subsequent years?

I think that's a perfectly reasonable view of it. I think you overstate the impact of the New Hampshire vote, though. Johnson did, after all, win that primary by 7 points.

If I were to put a reason on why he dumped I'd place a lot more blame on the anti-war movement than the budget. It was pretty clear from the '68 convention that the anti-war platform and not the deficit was the driving force among the Democrats that year. I think Johnson just realized that there was no way to claim the nomination as long as the war continued.

Anyway, time will tell. We don't have access to all of the Johnson presidential papers yet. One day the argument will be settled.

Cheers!
Mazo.

[I B Hankering]

The Battle of Khe Sanh and Walter Cronkite: “[I]t is increasingly clear to this reporter that the only rational way out then will be to negotiate, not as victors, but as an honorable people who lived up to their pledge to defend democracy, and did the best they could.” - February 27, 1968.


LBJ purportedly said, “If I've lost Cronkite, I've lost Middle America.” Later, Johnson announced he would not seek reelection.

[Texas Contrarian]

Originally Posted by Mazomaniac

If I were to put a reason on why he dumped I'd place a lot more blame on the anti-war movement than the budget. It was pretty clear from the '68 convention that the anti-war platform and not the deficit was the driving force among the Democrats that year. I think Johnson just realized that there was no way to claim the nomination as long as the war continued.

I certainly agree with that assessment.

My point was essentially that at the dawn of 1968, it probably looked like concern about a possible budget deficit could become a problem for the administration, and that ways to ameliorate that concern might have looked quite attractive at the time.

[Mazomaniac]

Originally Posted by WTF

Well Mazo, it hasn't worked with me. I think everything needs to be cut, Defense and SS spending.

Absolutely agree.

In fact, I'll take the opportunity to raise the great taboo subject of budget cutting: the military retirement system. That's the one nobody wants to touch.

Very few people realize it but the military equivalent of social security went bust decades ago. As of today the system has an unfunded liability of $700B. (Compare that to the $2.6T surplus in the Social Security system!)

On top of that, we don't have any direct means of eliminating the unfunded liability in the military retirement fund. Members of the military don't pay any of their salary into the system the way civilians do with SS. They get it all for free so you can't just raise the contribution rate on current servicemen. On top of that the military retirement benefits are ENORMOUS compared to social security. An active duty soldier can retire as early as age 38 (average age of retirement is actually in the mid-40's) and collect 50% of his highest base pay. If he stays in longer he can get as much as 75% of his top pay. The average military pension is now twice what the average civilian gets from social security and it starts twenty years before social security kicks in.

On top of that ex-servicemen can work in the civilian world for the rest of their career and collect social security from those earnings in addition to the military retirement pay. I had a friend who's dad retired as a lieutenant commander. Between the military retirement and social security he ended up getting more than $40,000 per year when he retired at 62. Add that to the health care benefits, the low cost loans, etc, etc, and it's quite a package that we're paying for.

So where does all the money for this come from?

Straight from the general budget, of course.

As noted above the military doesn't contribute to their own retirement or other benefits out of their pay. We all pay for it out of the general budget. Right now for every $100 in salary the military spends we pay another $35 just to fund the retirement program - three time the rate of social security.

I know I'm going to get my ass slammed on for even suggesting that something needs to be changed here. To those who will do so I say fire away. Unlike most politicians I'm man enough to stand up to a veteran and tell him that his nice little retirement package is just a little too rich for my gullet. If we're going to spread the pain of fixing the federal retirement system then the military needs to step up and take some of the load as well. They tried to do it in '85 but the Pentagon went ape-shit and the politicians backed down. I'm all for giving our soldiers a decent life after their service but not when they don't have to contribute to it and not at 3X the price everybody else pays.

Cheers,
Mazo.

[pjorourke]

Governments do not have the required financial integrity to run defined benefit pension plans and thus should not be allowed to -- whether its state employees, municipal police & fire or SS. Defined contribution plans, with intelligent investment strategies and/or insured annuity options are the only way to go. The beauty of these plans is that they can't fuck with them.

[I B Hankering]

Originally Posted by Mazomaniac

As noted above the military doesn't contribute to their own retirement or other benefits out of their pay. We all pay for it out of the general budget. Right now for every $100 in salary the military spends we pay another $35 just to fund the retirement program - three time the rate of social security.

When we need food, most of us go to the grocer and buy what we need. The grocer pays the supplier who pays the farmer for the fruits and vegetables and the rancher for the beef, etc. You can bitch about the price of eggs or milk, but short of buying your own chickens and a milk cow there is not much you can do but pay the going rate: and that holds true when paying for national defense. If you are not willing to do the job yourself, you will have to pay the price.

It's true, having the draft was cheaper. When I first got in, my monthly salary was right around $200 per month: about what it would cost (in those days) to rent a cheap apartment for a month. But I didn’t need to worry about that, the Army gave me a room with a bunk. I just had to share the room with 60 other guys.

Under the draft, there was no cost to entice men and women to enlist and then keep them there; thereby preserving the county’s investment. Yet there are many in this country (Bill Clinton comes to mind) that got on with their lives while others served in their place to protect and preserve the American way of life: to protect and preserve the value of the American dollar (if you think that doesn’t matter, ask a southerner what his Confederate dollar could buy in 1869). Instead of serving, these individuals went to college, finished in a timely manner and are now drawing down large salaries. These individuals who “got on with there lives” were in no danger when suicide bombers destroyed a barracks in Beirut in 1983 killing or wounding over 300 American service personnel deployed on a peace keeping mission in Lebanon. The same is true when a bomb went off in a German discotheque and killed or wounded 52 U.S. service personnel in 1986. They were not among the 92 who were killed or wounded in Mogadishu while on a humanitarian mission to feed and protect thousands of starving Somalis. Nor were they were they among the 56 killed and wounded on the U.S.S. Cole in 2000. I didn’t mention the wartime losses on purpose, because it is a hazard everyone who enlists or reenlists agrees to accept. There are several jobs that are dangerous, but there is no other job that requires you to put your life on the line when told to do so. A policeman or a fireman can resign on the spot and walk away. Service personnel cannot.

The cases I mentioned occurred while this nation was at “peace.” I could mention other “peace time” casualties, but I’ll stop. Yeah, we could reinstitute the draft, and that might reduce defense costs. Then again, given the condition of today’s youth, it might drive costs up. Yet it would still be cheaper than earning the worthless dollars of a defeated nation.

[Texas Contrarian]

Originally Posted by pjorourke

Governments do not have the required financial integrity to run defined benefit pension plans and thus should not be allowed to -- whether its state employees, municipal police & fire or SS.

That's for sure! The problem is assuming frightening proportions at the state level. Truly scary numbers.

Originally Posted by pjorourke

Defined contribution plans, with intelligent investment strategies and/or insured annuity options are the only way to go. The beauty of these plans is that they can't fuck with them.

Therein lies the problem. If corrupt political hacks can't fuck with 'em, they ain't gonna allow 'em!

[discreetgent]

IB, in 1983, 1986, 2000 there was no draft.

[WTF]

Originally Posted by CaptainMidnight

Therein lies the problem. If corrupt political hacks can't fuck with 'em, they ain't gonna allow 'em!

[I B Hankering]

Originally Posted by discreetgent

IB, in 1983, 1986, 2000 there was no draft.

Sorry you misunderstood. I know the draft ended in '73. I was just stating that monthly salaries and entitlements were substantially lower when there was a draft, than they are today with an all volunteer force. A private today earns $1447.00 base pay per month (if you account for inflation, is this more or less money than $200 in 1973? IDK), but rank is awarded faster today than when I first entered service, and a PFC (after 6 months) earns $1,706 base pay per month. Plus, back during the Vietnam Era, you had to be a corporal or higher to live off post. Today, lower grade soldiers are allowed to live off post with families; thus, more entitlements.

This article states that military pay lagged behind comparable civilian pay until 2008. I got out in 2003, so I guess I never enjoyed equitable pay—especially when you consider I was making $200 a week as a roust-a-bout before I went in the Army.

http://www.milspouse.com/military-vs-civilian-pay.aspx

[atlcomedy]

Originally Posted by I B Hankering

When we need food, most of us go to the grocer and buy what we need. The grocer pays the supplier who pays the farmer for the fruits and vegetables and the rancher for the beef, etc. You can bitch about the price of eggs or milk, but short of buying your own chickens and a milk cow there is not much you can do but pay the going rate: and that holds true when paying for national defense. If you are not willing to do the job yourself, you will have to pay the price.

That is a really flawed analogy...

There is a great deal of competition for packaged and prepared foods as well as many viable substitutes most products...

[I B Hankering]

Originally Posted by atlcomedy

That is a really flawed analogy...

There is a great deal of competition for packaged and prepared foods as well as many viable substitutes most products...

I don't know. I think if you put the uniform on, you would be less likely to bitch about how much it cost to pay and support you.

[Mazomaniac]

Originally Posted by I B Hankering

I don't know. I think if you put the uniform on, you would be less likely to bitch about how much it cost to pay and support you.

And this emotional argument is exactly the reason why politicians will never address this issue and we'll just keep pumping money into it for ever and ever.

Cops and firemen "put on the uniform" and put their lives up for it every day (unlike the vast majority of the military who never come in harms way any time during their entire careers). The volunteer firemen in my town don't even earn social security credit for what they do. Yeah, you make a great argument.

Mazo.