Reflecting on the last 75 years
The Editor's Notebook on Dec. 16 (“Entitlement not dirty word despite what some believe”) resulted in my reflection on our past 75 years.
First is that the establishment of the Social Security program was designed supposedly to preclude the elderly poor from being in old folks homes. In reality it was the first legal Ponzi scheme, since the majority of members would never live to receive any benefits. The actuary age at the time was less than 62 and you were not eligible for benefits until age 65.
In the 1940s, the first $400 dollars of interest income was not taxed by the federal government. A number of the states had a temporary welfare assistance program which did not limit it to female head of households. Then in the 1950s they made Social Security participation required for all private sector jobs. The justification for taxing all savings interest income was because you could retire on your Social Security benefits.
In the 1960s the Johnson administration declared war on poverty and established Medicare for the elderly, paid by both the beneficiary and a workers wage tax in a 50/50 plan. The poor were to be funded by the federal government with households headed by a female instead of male. The politicians saw all that money in the Social Security trust fund and moved it into the general fund. That was to conceal the cost for the Vietnam conflict and cost for other social programs
In the 1970s the liberals declared the poor had a right to own a home and created the Community Reinvestment Act (CRA). The purpose was for banks to grant loans to citizens in the urban poor areas of cities.
The 1980s had to deal with the 1970s financial mess called the misery index which consisted of high unemployment and inflation reflected in an index of over 20 percent. President Reagan was able to convince a Democratic Congress to increase both the FICA rate and wage subjected to this tax. They also were successful in authorizing the creation of Individual Retirement Accounts and 401K accounts over liberal objections they would only be beneficial to the rich. Instead, many blue collar workers took advantage by switching union dues to IRA accounts and companies' creation of 401K programs.
The 1990s had President Clinton finally (after three attempts by a Republican Congress) address welfare reform and balanced the budget. Unfortunately, Sen. Chris Dodd and Congressman Barney Franks convinced the president to expand the poor's ability to own a home beyond financial reason. The case of a waitress in San Francisco purchasing a $500,000 home on her salary was an excellent example of why the housing market finally collapsed in 2007/8.
In 2008 we elected as president a person totally unknown except for his two autobiographies he authored. The Hope and Change campaign was so successful it even received the Noble Peace prize. We watched as multi-billions of taxpaying dollars were awarded to green energy companies that filed for bankruptcy just one or two year later. The national debt increased by almost $6 trillion dollars in four years. The administration didn't pass or operate under a budget in four years. The one proposed presidential budget was rejected so strongly that 99 senators rejected it. We are now confronted with a fiscal crises.
We normally use the phase HAPPY NEW YEAR at this time, but instead I will simply close my eyes and ears and take a long snooze.