Medicare’s Benefits exceed Contributions by 300 Percentby admin on 06/19/2011 1:36 PM
Obama’s ‘Conversation’ on Entitlements
By HOLMAN W. JENKINS, JR, WSJ
A couple retiring last year paid $109,000 into Medicare but can expect $343,000 back from the system.
Nobody should be surprised that public-sector workers in Wisconsin and elsewhere are fighting to preserve every penny of their promised benefits.
Nobody should be surprised that state governors—and it doesn’t matter which party—are trying to trim those privileges and benefits. . .
News reporters may be naïve, and some of the protesters may pretend to be. But this fight was penciled in long ago, when politicians and union leaders made the strategic decision to negotiate benefits without negotiating for the funding to make good on them. The mock shock and horror is all the more laughable given that events in Wisconsin are a perfect microcosm of the battle that every sentient American knows, and has known for a generation, awaits Medicare and Social Security.
In keeping with the theatrics of naïveté, President Obama now calls for “beginning a conversation on entitlements.” One wonders what it was, then, that G.W. Bush began at the 2004 Republican convention, or what thinkers and activist groups that have been pushing visions of entitlement reform for decades have been doing.
Has the president not heard of the private sector’s pioneering work on “defined contributions”? Or Bill Clinton’s landmark Medicare commission in 1999? One might as well wonder what pain is coming to those Obama followers who have yet to suspect their thoughtful liberal might be a visionless apparatchik.
Don’t doubt that Mr. Obama’s real impulse . . . is to let things ride and then simply, amid a crisis, start slashing benefits for the “rich” while also raising taxes on “the rich.” Unspoken has been a Democratic assumption that an aging electorate, in a crisis, would be willing to tax itself to the hilt to prop up an unreformed or barely reformed Social Security and Medicare. . .
Medicare is the real killer. According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.
And don’t let that figure get your hopes up, because even that $109,000 is not available today. That money was spent long ago. The government’s trust funds are a fraud. Indeed, by some large amount, society missed out over many decades on domestic savings and investment that would have taken place had workers not been relying on unfunded government promises to support them in retirement. . .
Government is not the solution to our problems, government is the problem.
– Ronald Reagan