Demography, Contraception and Fiscal Melt Down

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 It should be the highest ambition of every American to extend his views beyond himself, and to bear in mind that his conduct will not only affect himself, his country, and his immediate posterity; but that its influence may be co-extensive with the world, and stamp political happiness or misery on ages yet unborn.

George Washington

 

Mark Steyn at National Review Online, notes that the fiscal lunacy of the Obama administration and the HHS Mandate are linked:

 

As for us doom-mongers, at the House Budget Committee on Thursday, Chairman Paul Ryan produced another chart, this time from the Congressional Budget Office, with an even steeper straight line showing debt rising to 900 percent of GDP and rocketing off the graph circa 2075. America’s treasury secretary, Timmy Geithner the TurboTax Kid, thought the chart would have been even more hilarious if they’d run the numbers into the next millennium: “You could have taken it out to 3000 or to 4000” he chortled, to supportive titters from his aides. Has total societal collapse ever been such a non-stop laugh riot?

Yeah, right.” replied Ryan. “We cut it off at the end of the century because the economy, according to the CBO, shuts down in 2027 on this path.”

The U.S. economy shuts down in 2027? Had you heard about that? It’s like the ultimate Presidents’ Day sale: Everything must go — literally! At such a moment, it may seem odd to find the political class embroiled in a bitter argument about the Obama administration’s determination to force Catholic institutions (and, indeed, my company and your company, if you’re foolish enough still to be in business in the United States) to provide free prophylactics to their employees. The received wisdom among media cynics is that Obama has engaged in an ingenious bit of misdirection by seizing on a pop-culture caricature of Republicans and inviting them to live up to it: Those uptight squares with the hang-ups about fornication have decided to force you to lead the same cheerless sex lives as them. I notice that in their coverage NPR and the evening news shows generally refer to the controversy as being about “contraception,” discreetly avoiding mention of sterilization and pharmacological abortion, as if the GOP have finally jumped the shark in order to prevent you jumping anything at all.

It may well be that the Democrats succeed in establishing this narrative. But anyone who falls for it is a sap. In fact, these two issues — the Obama condoms-for-clunkers giveaway and a debt-to-GDP ratio of 900 percent by 2075 — are not unconnected. In Greece, 100 grandparents have 42 grandchildren — i.e., an upside-down family tree. As I wrote in this space a few weeks ago, “If 100 geezers run up a bazillion dollars’ worth of debt, is it likely that 42 youngsters will ever be able to pay it off?” Most analysts know the answer to that question: Greece is demographically insolvent. So it’s looking to Germany to continue bankrolling its First World lifestyle.

But the Germans are also demographically exhausted: They have the highest proportion of childless women in Europe. One in three fräulein have checked out of the motherhood business entirely. A nation that did without having kids of its own is in no mood to maintain Greece as the ingrate slacker who never moves out of the house. As the European debt crisis staggers on, these two countries loathe each other ever more nakedly: The Greek president brings up his war record against the German bullies, and Athenian commentators warn of the new Fourth Reich. The Germans, for their part, would rather cut the Greeks loose. In a post-prosperity West, social solidarity — i.e., socioeconomic fictions such as “Europe” — are the first to disappear.

The United States faces a mildly less daunting arithmetic. Nevertheless, the Baby Boomers did not have enough children to maintain mid-20th-century social programs. As a result, the children they did have will end their lives in a poorer, uglier, sicker, more divided, and more violent society. How to avert this fate? In 2009 Nancy Pelosi called for free contraceptives as a form of economic stimulus. Ten thousand Americans retire every day, and leave insufficient progeny to pick up the slack. In effect, Nancy has rolled a giant condom over the entire American economy.

Go here to read the rest.  Our fiscal policy in this country has long been summed up in the phrase:  “Eat, drink and be merry, for tomorrow we die.”  The Founding Fathers who set up our Republic constantly talked about posterity and the duty their generation owed to it.  Our current political leadership rarely talks about future generations and with good reason.  The debt we are piling up, if it is ever paid at all, which I increasingly doubt, will doom future generations to a Herculean task of cleaning up our fiscal Augean Stables as their dominating task.  It only takes a very brief time, and one completely feckless generation, to doom for the foreseeable future a prosperity built up over centuries.  The Obama administration is the perfect avatar for the all consumed in self mentality produced by a contraceptive culture that can see no further than the brief span of time this globe is occupied by those who currently inhabit it.

23 Responses to Demography, Contraception and Fiscal Melt Down

  • Obama — our Director of Hatcheries and Conditioning

  • You do know that our total debt as a percent of GDP fell from the end of WW2 until 1980 when our tax policy (not our spending) took a dramatic change. The percentage has since risen except for the 90’s when our tax policy briefly took a minor reversal from their current direction. The direction of the deficit and then the debt changed abruptly again as the tax policy changed in 2001. I know there are going to be many comments claiming it was all about spending, but that is not what the data shows. The relationships between tax policy and the point when the graphs of the current balance and the total debt change direction are clearly related to tax policy. The recent massive debt does have a spending component in that the severe recession we entered in 2008 did cause an increase in spending, but the larger effect was a decrease in tax collections due to the recession.

    I do disagree with the HSS ruling, but if we are going to show charts of rising debt, then we should lay the blame where if belongs. It belongs on our unwillingness to pay for the things we want. We were promised (both nationally and at the state level) that if we cut taxes we would see prosperity and increased . The lowest federal tax rate since WW2 at the federal level has brought massive deficits and the worst 10 years of employment since WW2. A 15 year recorded of increasing tax cuts in Michigan (coupled with the fall of the American auto industry) have devastated our state. At the very least we should stop seeing the claims that tax cuts will improve our economy and increase government revenues as a result since the evidence is to the contrary.

  • Justice and peace!

    Obama’s policies are destroying the evil, unjust private sector.

    It’s working.

    Pharaoh’s economic reports hide the huge decline in number of Americans with jobs.

    Mark Steyn: Obama, Romney and Santorum are talking about sex while the nation goes broke. Each day, 10,000 Americans retire but “leave insufficient progeny to pick up the slack. In effect, Obama has rolled a giant condom over the entire American economy.”

    America can’t employ more people.

    In 30 years, there will not be enough taxpayers to pay for the entitlement masses, $100,000,000,000,000.00 present value of cash flow due. Taxes won’t cover interest on the national debt.

    Then, grandpa will be left out in the cold.

    Justice and peace!

  • “The lowest federal tax rate since WW2 at the federal level has brought massive deficits and the worst 10 years of employment since WW2.”

    Complete hogwash Paul. No possible jacking up of the tax rates can possibly pay for our completely out of control entitlement spending, which is apparently insatiable. Your argument would have a tinge of merit if the European welfare states, paying higher taxe rates than we do, were not also on the same quick path to national bankruptcy.

  • And for those who might still labor under the illusion that congress and this admin-
    istration are in any way serious about this situation, please reflect on the fact that it
    has been almost three years since the federal government has had a budget.

  • No possible jacking up of the tax rates can possibly pay for our completely out of control entitlement spending, which is apparently insatiable.

    Federal spending is currently about 24% of domestic product. There is a mess of junk in the federal budget that ought to be excised, but that is a policy choice. We could certainly levy the taxes necessary to pay for it.

  • ‘The Obama administration is the perfect avatar for the all consumed in self mentality produced by a contraceptive culture that can see no further than the brief span of time this globe is occupied by those who currently inhabit it.’ Yup.

    George Washington’s quote ends with their choice – to stamp misery on ages yet unborn.

    Laughing at religion and conscience like silly jokers, talking about sex enough to train the needy national psyche away from their sleight of hand, and accommodating no one but their handlers with money.

    ‘ and leave insufficient progeny to pick up the slack. In effect, Nancy has rolled a giant condom over the entire American economy.’ As she said on the video, something like uh – more bang for the buck – er – that’s what the economists say.

  • The United States faces a mildly less daunting arithmetic. Nevertheless, the Baby Boomers did not have enough children to maintain mid-20th-century social programs.

    For the record, postwar birth cohorts have varied between 2.9 million and 4.3 million, with no secular trend in size. Our total fertility rate has been at replacement level or above for that entire time bar a brief run of years in the late 1970s. Escalating burdens of caring for the elderly have been a function of improved life expectancy, a problem which can be finessed by having the retirement age on an appropriate escalator.

  • To pay for entitlements Art would require doubling tax rates. Not only is that politically inconceivable, the impact on our economy can be imagined.

    http://www.heritage.org/budgetchartbook/entitlements-double-tax-rates

  • Since the late Fifties Art, the rate of fertility has declined from 3.8 children per woman to 2.06 today. 2.10 is considered to be the replacement rate, and since 2000 we have been at that for only one year: 2008.

  • Given the Pelosi pic, I think a better title for the post should have been– “Demography, Comtaception, and Facial Meltdown.”. After all, the Pelosi facelifts are taxpayer supported.

  • Don, please tell me what I said that is hogwash. The federal tax revenues are the lowest as a percentage of GDP since WW2. The 10 years of employment since 2001 (when the income tax rates were cut followed by tax cuts on capital gains and dividends) are the worst since WW2. I could give you numerous links including the federal government’s budget page. Also, do you deny that our budget was in surplus before the tax cuts of 2001 and 2003?

    As for entitlements, the problem continues to be Medicare, yet every proposal to fix the problem by doing what has been successful in every other country is rejected in this one.
    As compared to the European welfare states please the chart below. The data is sorted by the larges Debt as a percentage of GDP by country. Of the welfare states in Europe that have economies comparable to the US, you could only rank Italy as having a higher debt burden than the US. And only the UK has come anywhere close to the US in the increase of debt from 2000 to 2010 (I included the 2009 numbers to demonstrate that this did not all occur under President Obama). The problem in Europe is that they decide to include countries like Greece in the Euro zone and Germany absorbed East Germany. These actions are close to the US agreeing to a common currency with Mexico, this might help Mexico but would be a significant burden.

    National debt as a percentage of GDP
    2009 2009-2000 2010 2010-2000
    Japan 197 66 220 89
    Italy 109 2 119 12
    United States 67 22 94.36 49.36
    Germany 73 14 83.96 24.96
    Canada 65 -6 83.95 12.95
    France 80 21 82.33 23.33
    United Kingdom 59 17 75.5 33.5
    India* 66 -4 71.84 1.84
    Brazil* 66 -2 66.84 -1.16
    Spain 56 -7 60.12 -2.88
    China* 32 9 3 3.83 10.83
    South Korea 31 18 33.44 20.44
    Russia* 5 -14 11.75 -7.25

    Sorry to be so long winded in a com box, but I felt the need to respond.

  • Sorry, I spent 20 minutes trying to format the chart and then the columns still did not line up.

  • The pig’s not getting any cleaner Paul. A more pertinent list is that of the total national debt as a percentage of the country’s annual gross domestic product. Go to the link below to view the list.

    http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

    The numbers for most of the European nations are especially shocking when consideration is given that they spend next to nothing on defense as compared to the US.

    The idea that the solution to this problem is to raise taxes is simply wrong. The only solution is to radically slash government spending and such a solution will come, probably after the financial crash the West is inevitably headed for.

  • Integrity I wish Obama had some.

  • Don, Still you said my original post was hogwash and make the claim that the answer is not raising taxes. Although I agree the answer is not just raising taxes. Anyone who would claim that the federal government (or any other institution) could not improve it’s efficiency would be silly. However, you have yet to answer what part of The current take of the federal government being the lowest since WW2 or the decade of job performance since the taxes were dropped were “hogwash.” Plus you avoid commenting of the fact that we had a surplus before taxes were cut in the early 2000’s.

  • We did not have a surplus under Clinton Paul. We had the dot.com bubble, a Republican Congress and blue smoke and mirrors with social security funds.

    http://www.craigsteiner.us/articles/16

    If the Bush tax cuts were completely repealed, we could expect to have around 200 billion a year in additional taxes. The deficit for this year is estimated to be 1.327 trillion dollars. Increasing taxes isn’t even a bandage on the underlying problem of run away entitlement spending.

  • Yes Don, unfortunately when the social security taxes were doubled in the 1980’s President Reagan insisted that SS funds were counted in the deficit calculations. And that did allow the issue that the article points out. It is also true that President Clinton had the advantage of the computer industry expansion and dot com bubble to the income side. But Pres. Clinton does deserve credit for stopping his party from spending the money and he stopped the Republican party from issuing tax cuts instead of responsibly reducing our deficit during good times. If you don’t believe this draw a graph of the current balance of the federal government from 1980 through 2010. It has a point of inflection at two points. In 1993 it changes from constantly going more negative to going less negative. In 2001 it changes from constantly going less negative to going more negative. The curvature did not change when congress changed from Democratic to Republican in 1995, nor did it change when the congress went back again in 2008. It changed when President Clinton gained control of the budget process and it changed again President Bush gained control of the process. There is a lot President Clinton did I do not agree with, and some things I find abhorrent, but if the data does not show you that he was responsible for the improving current balance of the federal budget during the 1990’s than you are choosing not to look.

    By the way, you still have not pointed which of my original comments are “hogwash.” Since this is a nice way of saying I am lying, I wish you would at least attempt to support the claim in some way.

  • To pay for entitlements Art would require doubling tax rates. Not only is that politically inconceivable, the impact on our economy can be imagined.

    Heritage is an advocacy group. They are not necessarily going to be terribly explicit about it that when they speak of the federal income tax they are not discussing the whole menu of federal or state taxes. The federal income tax comprehends about half of all federal tax collections and about a quarter of all tax collections.

    As we speak, the ratio of federal tax collections to domestic product is 0.149. I believe that is lower than it has been at any time in the last 50-odd years. However, there was a revolution in state and local expenditures during the years running from about 1965 to 1975, so total tax collections are not so low, but not abnormal in context.

    Currently, federal expenditures amount to about 24% of domestic product, just a wee bit higher than they were in 1984. (Federal tax collections as a share of domestic product are lower than they were, so public sector borrowing is at this time 9% of domestic product rather than 6% of domestic product). All things being equal, the relative size of the public sector (beyond a certain baseline) is inversely related to measures of economic dynamism. There is a cost to be paid in static utility and in economic vibrancy each time you expand the public sector’s take and that cost has to be taken into account in assessing any proposed program.

    Now, how are we financing this expenditure? We are financing it through a mix of taxation and public sector borrowing. One might expect that it does diminish utility to finance an activity from coerced contributions (taxation) rather than voluntary contributions (borrowing). Keep in mind that the diminution of utility would be some fraction of 9% of domestic product, perhaps expressed in anemic growth rates experienced as the tax increase is imposed (recall that the money is not being invested, but parked in Treasury issues). That is not what you want, but it is not economically devastating either).

    If you wish to make an argument against a particular manifestation of public expenditure, make that argument; there’s plenty to choose from. If you wish to argue that there are perverse incentives encoded into entitlement programs, make that argument. If you wish to make an argument that optimal public expenditure is of a particular dimension, make that argument. What you really ought not to do is contend that it would be economically devastating to maintain a public sector of a given relative size when we have in fact done so for 35 years or more (and other countries have maintained larger such sectors for longer periods).

  • The idea that the solution to this problem is to raise taxes is simply wrong. The only solution is to radically slash government spending and such a solution will come, probably after the financial crash the West is inevitably headed for.

    I think it might benefit you if you have the time to review the Appendix to the Budget of the U.S. Government and the analytical tables (not the executive summaries, which can be misleading). There are clunky pdfs available online. Review it with two notions in mind.

    1. You cannot welsh on debt service;

    2. The elderly and disabled have very limited capacity to adjust to reduced economic circumstances; diminution of benefits to these sectors (that would be Social Security, Medicare, and that portion of Medicaid which finances nursing homes) has to be undertaken quite gradually and is not going to net you much over the course of the next several years.

  • And I would suggest Art that you contemplate the deficits for the last five years and consider this truism: “Something that can’t go on forever will not go on forever.” National public debt is currently at 99% of GDP. Our capacity to finance the government by conjuring money out of thin air is coming to an end and probably sooner rather than later due to an increasing realization that we can never pay off this amount of debt, at least not with a currency that has anything close to its present value. Slow motion debt repudiation, hyper inflation, currency devaluation, whatever it is called, it is eventually going to occur with severe damage to our economy.

  • I am perfectly aware of the problem. However, cessation of public sector borrowing requires:

    1. More revenue; and

    2. Less spending.

    My complaint about your posts on this matter is a deficit of specificity as regards the latter and your insistence that the former cannot occur. There’s quite a mass of bilge in the federal budget. There are roughly 55 independent agencies you could shut down with little damage to the public interest; two cabinet departments that could be shut down with like consequences; a third department which could have its budget cut by >90% with like consequences; and another that could use a 22% cut. The thing is, you pump out the bilge and you still have problems.

    A. Reducing the bloat derived from the structural defects in entitlement programs takes time;

    B. Removing excess spending in legitimate programs requires intensive attention to granular details or requires you make an arbitrary cut and tell the agency chiefs to figure out the details.

    C. Some sorts of cuts will induce or exacerbate fiscal crises in state and local government. Liquidated programs are properly partially replaced with formulaic revenue sharing.

  • Medusa, the Gorgon, is Nancy Pelosi. Medusa had snakes for hair. Nancy Pelosi has snakes (lies) for hair. The sight of Medusa turned men to stone. Nancy Pelosi turns men to stone. Nancy Pelosi gives her son a stone when he asks for a loaf of bread and a snake when he asks for an egg. As a public servant, all citizens are constituents of Nancy Pelosi. We, the people, are her public, her national community. Yet, Nancy Pelosi consistently gives us, her constituents, a stone, when we ask for a loaf of bread, and a snake when we ask for an egg. If untruth, or perjury in the public court of law is permissible, then, Nancy Pelosi has handed us, her constituents, a stone when we ask for a loaf of bread and a snake when we ask for an egg.
    In Greek mythology, Perseus slew the vile Medusa by viewing her in the mirror of his shield for if he had looked at Medusa straight away, he would have been turned to stone. Medusa had snakes for hair, the sight of which turned men to stone. Perseus, son of the Greek king of gods, Zeus, separated Medusa’s ugly snake-generating head from her body with his sword. Separating Nancy Pelosi from her snake-generating lies with our vote in November will free us, her constituents, from turning into stone.
    St. Patrick drove the snakes out of Ireland. It is time to drive the snakes out of the United States Congress.

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