In his book, "Applied Economics," Dr. Thomas Sowell refers to the ability to analyze not only the short term (Stage One) political impact, but to also think ahead to their long term (Stage Two, Three, etc) economic impact. See, there is the problem with our progressive friends...economics and Stage Two thinking. 1. For example, FDR, August 14, 1935, on signing the Social Security Act: We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age, 2. See, soft heart: who could argue with the intent? But where is the fiscal know-how? a. No one considered that life expectancy would increase? b. No one considered that the balance of workers and retirees might change? c. No one calculated the long-term costs? d. Ida May Fuller, the first person to begin receiving benefits, in January, 1940, when she was 65- she lived to be 100. worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits. Social Security Online e. Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program's actuary. Social Security in the red this year - Washington Times f. redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about 75 percent of scheduled benefits through 2084. Trustees Report Summary 3. Of course, Republicans passed Medicare Part D, but, credit where credit is due, progressives, unchecked, leave those budget time bombs: the New Deal gave us Social Security, Obama gave us Obamacare, and the Great Society left us Medicare. Beck, Balfe, Broke, p. 207 a. Prior to passage, estimates for Medicare were about $1.1 billion for the following two years, and several billion over this decade. And this, just after passage, The first full-year cost was estimated as $6.5 billion. Medicare, 1965 Legislative Chronology | Journihilism and The House Ways and Means Committee estimated that Medicare would cost only about $ 12 billion by 1990 (a figure that included an allowance for inflation). The Medicare Monster - Reason Magazine b. But in 1990 Medicare actually cost $107 billion. Ibid. c. Current annual budget for Medicare: $498 billion. Obama?s 2011 Budget Proposal: How It?s Spent - Interactive Graphic - NYTimes.com 4. . As background to its estimates, the CBO notes that spending on Medicare, Medicaid, and Social Security will rise rapidly in the future, pushing up "primary" federal spending (excluding interest payments on the debt) from 18.2 percent of GDP today to 28.3 percent in 2050 and 35.3 percent in 2082. With interest payments included, spending will hit 41.8 percent of GDP in 2050 and 75.4 per¬cent by 2082 ."[t]he tax rate for the lowest bracket would have to be increased from 10 per¬cent to 25 percent; the tax rate on incomes in the current 25 percent bracket would have to be increased to 63 percent; and the tax rate of the highest bracket would have to be raised from 35 percent to 88 percent. The top corporate income tax rate would also increase from 35 percent to 88 percent." Peter R. Orszag, Director, Congressional Budget Office, letter to Representative Paul Ryan (RWI), May 19, 2008, Taxes to Pay for Medicare, Medicaid, and SSI | Medicare Insurance | eons.com 5. Spending on the three major entitlements, Medicare, Medicaid, and Social Security, will more than double in the next 40 years. Without major reforms, entitlement spending will consume all federal tax revenues by 2052. http://www.issues2010.com/pdf/Entitlements.pdf Did you get that? Every penny of taxes for these three entitlements...we won't even be able to pay for the interest on the debt!!!! Thanks, progressives.