An Opportunity For Major Reform, If We Can Take It
July 27 | Posted by mrossol | Debt, Economics, ObamaCare, Party PoliticsSome thoughts on a July 19, WSJ article…
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Emil W. Henry Jr.’s “America’s Debt-Ceiling Opportunity” (op-ed, July 19) clearly states what should be obvious to all: The federal government is extremely poorly run and ignores the basic rules of business economics and accounting. In fact, it often crosses the line into what would be criminal for the rest of us.
As an attorney, if I were to take money out of my client’s escrow or trust account and spend it on personal or firm expenditures, I would be disbarred without any question, and possibly prosecuted for theft by conversion. Yet, there is no doubt that our government has raided and spent the $2.6 trillion that is supposed to be in the Social Security Trust Fund, the very fund that the government tells us will self-finance Social Security for 26 years. Should we disbar or prosecute Congress?
If a corporation told its shareholders in an annual report that a new project was going to save the company money, to the benefit of the shareholders, but management knew full well that this program would actually increase costs to the corporation and cause severe economic stress, would not the government go after the CEO and others for various securities violations, among other things? Yet, ObamaCare was touted as a cost-saving program and rammed down our throats by parliamentary tricks, and it is not credible to believe that the president and certain members of Congress were unaware of what are now widely exposed, but previously undisclosed, costs that will explode our deficit.
If it is a federal crime for us to lie to Congress, why is the converse not true?
John H. “Chuck” Watson
Marietta, Ga.
Very substantial and significant assets and liabilities are missing from the USA Inc. report, which concedes this with respect to liabilities but glosses over unreported assets, saying only that Treasury Department valuation is accepted for the report. This is an easy out for a knotty problem which could lead to a partial solution.
The fixed assets of the U.S. could be as massive as its massive debt, but I don’t know of any cogent analysis of what potential assets Uncle Sam really has. Presumably that process would be based on a fair market value, and a highest and best-use basis. Such an analysis would certainly expose a stunning amount of dead weight (with attendant suffocating, ongoing carrying cost) that could be shed. It’s the first thing any business of any size would do.
Kenneth D. Perkins
Sewickley, Pa.
Why is the elephant in the room being ignored? The present value (PV) for federal Medicare, Medicaid and Social Security (MMS) obligations is now about $46 trillion. The General Accountability Office projects the MMS share of GDP escalating from 10% to 24% during the next 70 years. That’s about 1.3% per year growth in GDP share. Adding in 3% inflation and 3.5% real GDP growth shows about $3.7 trillion per year growth in PV MMS entitlements—and it is accelerating.
I suspect that today’s young people and future generations will pare back the entitlements; after all, they didn’t sign up for financial servitude.
John Schuyler
Aurora, Colo.
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