Why Bar Flys Shouldn’t Read Economics
 
© 2008 Gregory Norman Smallwood
 
For years I've ran at the mouth about the pending Social Security mess. I knew
it was a bad cocktail topic when I was at a party in Dallas and a woman asked me,
"Did you here that on Rush?"
 
Well, your retirement plans have likely shrunk to retirement dreams in the past 
few months and you're likely expecting that they'll bounce back. They likely
will have a bit of a dead cat bounce as hope springs eternal with the new president
(unless the Supreme Court does their job and really makes a mess of the election).
 
I'm just finishing a book I started this summer. The best part of it is toward
the end when it discusses Americas finances from a purely British and hence, seemingly
neutral point of view. It says, the Social Security and Medicare problem is so 
huge, that you would think someone would talk about it. And it's a bomb that
gets worse every day you don't address it. To cover Americas "implicit"
obligations to Seniors, you would have to immediately double taxes. Every day you
don't do something, the problem gets bigger. The book goes on to explain that
Margaret Thatcher (likely the greatest politician ever of the 20th century at least)
made the sort of small changes to the British system back in the 80's, that 
I've advocated to make to the US system for over a decade. Those changes are
why Britain sits apart from America, Italy, Germany and Japan.
 
I'm not advocating doubling taxes. I'm advocating overhauling the entire
system. You'll notice Barry hasn't appointed a Social Security czar or 
even acknowledged the problem. The financial crisis is just a symptom. Until someone
grabs the social security bull by the horns and the old people of AARP wake up to
their responsibilities to their children, then America is facing financial crisis
for the rest of my natural life.
 
If you're interested, the book is "Colossus: The Rise and Fall of the American
Empire" by Niall Ferguson. http://www.amazon.com/Colossus-Rise-Fall-American-Empire/dp/0143034790
 
If you think an 11 trillion dollar deficit is a problem, how about 45 trillion in
social security and medicare promises to the baby boom that is completely unfunded.
All the people I know say, "I know I'll never collect any social security...."
Then why do you pay it?

The Dallas Sports Princess asked me for what I’d do to fix the problem. So I said:

Princess,

If you think the Brits hate Thatcher, you should meet the Kiwi's and the Ozzies.  They think she was Hitler.  I have never met a figure so hated in my life.  They hate her more than Bush, which is sort of amusing.  But she was good for Britain.  She said "no" to every special interest and did what was best for Britains interest.  Now they're economically sound because she was so mean.  A little tough love never hurt anyone.

What I would do for Social Security would be to try and spread the pain around but I'd spread it around starting today.  Every day you wait, you make the changes much more painful.  My original plan was to turn down the COLA's.  The cost of living adjustment is automatic and pegged to the highest inflation number which economists have said for years is overstated.  So cut the COLA in half or don't have one for a couple years and reinstate it a lower percentage.  The seniors will scream like you cut off their arm, but I'm really screwing you and me more.  The seniors will see a few dollars less in their social security raise every year but the impact is compounded.  By the time we get around to retiring we might have some money.

Second, I'd tell everyone who's not 60 already that they have to work till 65.  No more retiring at 62.  Then if you're not 55, I'd tell you that you have to work till you're 67 and if you're under 50 that sorry, the new 65 is 70.  AARP would fucking flip out and act like we're turning old people out in the street but it spreads the pain around.  If you want to retire early, save some fucking money.

Next you have to do something about health care.  I'd institute catastrophic policies for old people on Medicare.  Any thing more than $2,000 (we can argue this number) is covered.  Anything less you need to pay yourself.  There needs to be some free enterprise concept in American healthcare and seniors need to care about what their health stuff costs.  Heart transplants for smokers, liver transplants for drinkers (that should equally fuck both of us) and crazy stuff for people who just don't give a damn about their health should be out.  Also, when it's apparent that someone is going to die, send them to a happy hospice without all the tubes and costs.  Gomez for health Nazi.  After we work that model out for old people, I'd be willing to use it for people under 18 who can't afford health care.

That's the rational way from Gomez.