Wehrwolfen
Senior Member
- May 22, 2012
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Analysis: Default Is Coming, But We'll Call It Reform
Ace
Something which can't be sustained, won't be.
One way or another, then, entitlements will be cut. Don't call it default. The correct term is entitlement reform.
You saw this day coming and saved for your own retirement. Don't call it default when Washington inevitably confiscates some of your savings, say, by raising taxes on dividends and capital gains. Taxpayers accept the risk of future tax hikes that may make the decision to save seem foolish in retrospect.
According to economists Robert Novy-Marx and Josh Rauh, state and local taxes would have to increase by $1,385 per household immediately to make good the pension promises to state and local workers, including firefighters and cops. That's not going to happen given all the other demands on taxpayers. Default, in this case, is the proper word for cities and states using bankruptcy to repudiate their pension obligations.
Now let it be said that inflation isn't fundamentally a solution to the entitlement problem, but the Federal Reserve is being led by increments to accommodate inflationary financing of future deficits. Don't call it default. Inflation is a risk savers are deemed to have accepted by putting their faith in the U.S. dollar.
Here's what you weren't told about Medicare during the presidential debates. Under the Paul Ryan plan, the affluent would pay more. Under the Obama plan, the affluent would flee Medicare to escape the waiting lists, shortages and deteriorating quality as Washington economizes by ratcheting down reimbursements to doctors and hospitals. Don't call either default. You don't have a legally enforceable right to the free care you imagined you were promised.
You saw this day coming and saved for your own retirement. Don't call it default when Washington inevitably confiscates some of your savings, say, by raising taxes on dividends and capital gains. Taxpayers accept the risk of future tax hikes that may make the decision to save seem foolish in retrospect.
According to economists Robert Novy-Marx and Josh Rauh, state and local taxes would have to increase by $1,385 per household immediately to make good the pension promises to state and local workers, including firefighters and cops. That's not going to happen given all the other demands on taxpayers. Default, in this case, is the proper word for cities and states using bankruptcy to repudiate their pension obligations.
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Now let it be said that inflation isn't fundamentally a solution to the entitlement problem, but the Federal Reserve is being led by increments to accommodate inflationary financing of future deficits. Don't call it default. Inflation is a risk savers are deemed to have accepted by putting their faith in the U.S. dollar.
Here's what you weren't told about Medicare during the presidential debates. Under the Paul Ryan plan, the affluent would pay more. Under the Obama plan, the affluent would flee Medicare to escape the waiting lists, shortages and deteriorating quality as Washington economizes by ratcheting down reimbursements to doctors and hospitals. Don't call either default. You don't have a legally enforceable right to the free care you imagined you were promised.
[excerpt]
Read more:
Jenkins: None Dare Call It Default - WSJ.com
