One Fifth

Borrowing, when there is no reasonable chance to pay back the funds, is not even close to what most of us would consider sound economic advice.  Unfortunately, this is how the government has been operating for quite some time now.  And Social Security, among other taxpayer funded programs...is in real trouble.

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Hello again, ladies and gentlemen, and welcome to another episode of Freedom's Creed. Believe it or not, ladies and gentlemen, I am starting the fourth year of the podcast. And so I'm pretty excited about that. I hope that over time the content that I am providing to each of you who listen regularly is something that you appreciate, and I'll do my best to continue to make that happen. Now, I have talked about the national debt before, and if you haven't taken a look recently, and if you're prone to depression, I wouldn't look at it if I were you. But the national debt currently stands at about $34.5 trillion. It goes up by about $100,000 every four seconds. To say that is disturbing would be a gross understatement. It's pretty bad when the Congress of the United States has to raise the debt ceiling, which only makes the hole deeper. It's insidious. To be sure, we don't really have a revenue problem. What we have is a spending problem. We only ever hear about taxing the rich or making the rich pay their fair share. We rarely, if ever, hear about how a political party or the Congress as a whole is going to cut spending. It never happens. And if it never happens, then we're going to have this problem for the foreseeable future. We're going to just pass it on to future generations. That's pathetic. Nevertheless, if you've listened to the podcast for any length of time, you know that I'm about solutions. I want to talk about things that we can do to solve the problems that we have. But if we don't identify the problem to begin with, then we can't really solve the problem. We just kick that can, as the adage says, on down the road. I want to share some numbers with you that I was able to obtain just on a recent internet search, and it's probably something maybe you have looked at before. If you make $400,000 a year, you are considered to be in the top 1% of earners. Now, one of the websites that I visited said that 2.3% of individual earners make over $300,000 a year. In other words, according to these numbers that I looked at, that would be $1.6 million people make over $300,000 a year. However, looking at that a little more closely, I figured, okay, there's roughly 330 million people in the country, but not all of those people work and have an income. So that $7.6 million was not accurate as far as I was concerned. So what I did is I took that same $300,000 a year, and I'm estimating that there are around 160 million working people in the United States. If you took that same 2.3% and you wanted to find out how many people make $300,000 a year, well, you would take, in my estimate, again, $160 million and multiply that by 2.3% or 0.023, and the number that I come up with is roughly 3.7 million people. The point in all of this is to say that there are very few people in the United States who make either $300,000 a year or more than $400,000 per year. Now, you may be wondering why the title of my episode is one-fifth. Well, I'm about to get into that. I found an article from Yahoo Finance from December of 2022, and it says, quote, when it comes to federal government spending, Social Security is right near the top of the list. About one-fifth or 21% of the 2022 federal budget went to Social Security, according to the Center on Budget and Policy Priorities. The total outlay was $1.2 trillion, the second biggest expenditure of any US government program. End of quote. Two things should readily stand out to each of you, and that is one-fifth of the federal budget, 21%, is Social Security, and the total outlay is $1.2 trillion. This is as of late 2022. The article goes on to say that, quote, the biggest chunk of the budget, $1.4 trillion, or 25%, went to a quartet of health insurance programs, Medicare, Medicaid, and the Children's Health Insurance Program, and Affordable Care Act Marketplace Health Insurance Subsidies, end of quote. In other words, nearly 50% of the budget of the United States of America goes to Social Security and Health Insurance programs. And I ask the simple question, irrespective of political party, is that sustainable? Clearly, the answer is no. It's interesting that in articles such as this and in the halls of Congress, billions and trillions of dollars get tossed around like it's no big deal. It's like us talking about a thousand dollars or a couple thousand dollars to do with whatever we need to do, pay bills, whatever. Is there any question that those that we elect to represent us are completely and utterly out of touch with we the people? Let me read another quote from this article. It says, quote, Social Security Administration expenditures mainly went to monthly retirement benefits for 49 million retired workers who averaged payments of $1,538 a month. But the SSA also provided benefits to about 3 million spouses and children of retired workers, 6 million surviving children and spouses of deceased workers, and 9 million disabled workers and their eligible dependents. End of quote. But irrespective of any of that, it would be cold and heartless for us to just discard people who are not able to support themselves and who need help. I'm not debating whether or not we should be doing it as a country at this point in time or anything of the sort. Certainly if family can help, that's the best way to go. But if family can't help and a church or community can't help, then the government is the next recourse for someone like that. What I'm simply talking about today is the staggering numbers that we're talking about. The article goes on to say this quote, retirement benefits, officially called Old Age and Survivors Insurance, or OASI, accounted for about $1.07 trillion of total Social Security spending in 2022, end of quote. Please recall the $68.5 billion of the Social Security Administration's expenditures went out as income to various groups of people. If government expectations are that the top 1% who are making $400,000 or more per year will raise over the next 10 years $60 billion per year, that doesn't even cover the $68.5 billion that's spent covering people who have disabilities, are blind, et cetera, et cetera. Again, just so there's no misunderstanding, I am not complaining about people who are disabled, blind, deaf, whatever, getting compensation, getting something to help them in their lives to support them. I'm not complaining about that. What I'm complaining about is the funky math that gets thrown in our face, and because the numbers are so outrageously high, we can't even comprehend where it's going. It's a shell game that the government plays with us every year, or whenever they feel like talking about it. It's ridiculous. How long have we heard that Social Security is going to be insolvent at some point in time in the future? At least since 1985, based on the Board of Trustees' long-term funding shortfall, which is a NASDAQ article, I'll quote from here in a minute. We've heard about this for a long time, for a generation, if not more. And what's been done about it? Absolutely nothing. Oh, wait, wait, of course, of course, I'm wrong here. There has been something that's been done about it. The debt ceiling has been raised so that we can spend more money that we don't have, which means that the spigot for spending is wide open. No one's at the switch. No one's doing anything about it. It's a joke, and it's being perpetrated on all of us. We should be outraged by all of this, and what we should do is no, not riot, no, not seek to hurt people, but actually elect people who are gonna do the hard work to get this thing solvent again and make it so that people who do depend on it for their lives don't have to worry about it anymore. Once again, ladies and gentlemen, Social Security was never intended to be a long-term retirement plan, but that is exactly what it's been made to be. And some of you may not like this next comment, but I'm gonna make it anyway. People who are crossing into our country illegally and who are being paid to work in this country under the table illegally, guess what? They're not contributing to Social Security. What kind of nonsense is that? If there are people in Congress who are really concerned about Social Security and about whether or not it's going to be solvent 10, 20, 50 years from now, whatever, they would be doing their utmost to make sure that we would cut down on illegal immigration into this country. Plain and simple. It hurts everyone, and it hurts, as is usually the case, the most vulnerable in our society. I alluded to a NASDAQ.com article, and I want to read from that article this short quote. It says Social Security laws cannot be amended in the Senate without sixty votes in favor. This means bipartisan cooperation is a must to address the program's most pressing issues. End of quote. This NASDAQ.com article, which is entitled The One Social Security Problem Congress Can't Fix That Could Cost America Dearly, was written in mid-February of this year. Pretty recent. All we seem to ever hear about in Congress is the partisan nature of the whole system. It's Democrats fighting Republicans, they all want credit for the things that they want to put forth, legislation that they put forth, whatever it is, most of it has nothing to do with the immediate help that people need. It's about some stupid nonsense that doesn't really impact a lot of people. Well, guess what? Social Security impacts millions of people. And the current Congress won't do any bipartisan legislation on Social Security because why? Because of their selfish tendencies to claim 100% credit for what they do. Democrats want 100% credit. Republicans want a hundred percent credit. That's ridiculous. That's worse than kindergarten because kindergartners don't know better. They don't know better that they should share. They don't know better that, hey, that's my blanket, get off of it before I punch you, or whatever they say nowadays. I don't know. But it's that's the way our Congress acts. Our Congress acts like little children. They want the credit for it, and if they don't get credit for it, they're gonna cry and they're gonna go to the corner and they're gonna talk bad about the other person. It's stupid. In an online article written in the Motley Fool in September of 2022, the writer indicates that there is this Social Security shortfall, and she writes about how the current administration is supposedly going to fix this. It says this quote, right now workers must pay Social Security taxes on income up to $147,000 per year. Any income above that limit is not subject to Social Security taxes at all. Under Biden's proposal, income between $147,000 and $400,000 per year would not be taxed, but those earning more than $400,000 per year will be subject to Social Security taxes, end of quote. Now, remember the numbers that I talked about earlier, where over the next 10 years, those making $400,000 or more would raise $600 billion over that time span, or in other words, $60 billion per year? And remember the $68.5 billion in expenditures that goes out for various Social Security disabilities that I talked about? Guess what? How does taxing those who make more than $400,000 a year create cash flow when it's still a deficit for just one of these programs that Social Security pays money to? Unbelievable. Again, no one seems to want to talk about the importance of cutting spending. We cannot continue down this road with the spending habits that we have. Raising the debt ceiling so that we can borrow more money. Yeah, that makes sense. Idiots. We have idiots running the country right now, and they're running it straight into the ground. But wait, wait, here's something that I don't know, maybe it will give you some comfort. Quote Right now, none of these proposals are concrete. So it's still uncertain exactly how lawmakers intend to solve Social Security's cash shortage. The SSA will continue to pay out benefits until 2035, at which point cuts may be on the table. End of quote. Cuts may be on the table. Please, cuts will be on the table. They should be on the table now, not necessarily for Social Security recipients, but for other expenditures that the government freely doles out on a yearly basis, thanks to the American income taxpayer. In truth, we really shouldn't need the executive branch of the government, regardless of the party that holds the executive branch. What we need is Congress to grow a pair and get in, because they hold the purse strings based on the Constitution, get in there and figure this out. Figure out how you can make Social Security solvent, particularly for those who can't work for themselves and who are not able to do so. Get this taken care of. Cut spending in other areas. Remember, nearly 50% of the budget of the United States government is Social Security and health care. 50%. The problem is spending. Spending is out of control. Can you imagine that a household would say, hey, you know what? As a really smart and ingenious plan of spending, we are going to deficit spend now in our house. So it doesn't matter if we don't have the money coming in. We'll just put it on a credit card and we'll just pay for our groceries that way. And then we'll just spend that way. And we won't have to worry about paying it back because, well, we can't. Well, guess what? That is exactly what is happening right now for many Americans because they can't afford to buy the necessities of life for whatever reason. And they are spending this money that they don't have. And this is so much more devastating to the individual or the family, because individuals and families don't have taxpayers sending them money every year, like the government does. The government knows it's going to get trillions of dollars in taxes every year, however much it is, I don't care. It's a lot of money. And they just spend it no matter what. They earmark it for this or that, and it's a waste, most of it. Instead of saying, look, we have a spending problem, we need to fix it so that we can be solvent, not only in Social Security, but in every other government expenditure. It's a joke. We're a laughing stock. People all over the world are laughing at us. As great of a nation as we are, we can't even spend money correctly. It's ridiculous. I can't even I'm running out of words to describe it. It's I'm gonna have to start swearing here in a minute just to get my point across. I won't, as though I often, well, not often, but sometimes do on the podcast because I get so upset about it. And this is something that we all should get upset about. It should anger us. And we should do something constructive to get it done and to accomplish it. And the only way we can do that is to elect people who are going to take this responsibility on themselves and not be scared of anybody else. Go out and tell the truth about Social Security so that it can get fixed. Try to get people on board with you in the Congress who are going to be serious about getting this fixed and controlling the spending in the country. We can't, it's unsustainable. We cannot continue doing the things that we're doing. I feel sorry for my grandkids who, when they get to be my age in this country, if things aren't taken care of and fixed, this country is going to be a hell hole for sure. It's terrible. Unfortunately, a lot of times when we talk about deficits in certain government programs, there's always a drumbeat that wants to sound off on taxing the rich. The top 1%, the top 5%, top 10%, whatever percentage you want to apply to it. Well, guess what? That's not going to fix it. It's not even a drop in the bucket considering the trillions of dollars that are spent on these government programs. Taxing the top 10%, even, will not get it done. It just won't. The way that it needs to get done is to tax the people who earn an income at a fair rate and cut spending. It's not difficult. It's not rocket science. It's simple mathematics. Take a look at how. You can fairly tax people, which I'm not a big fan of income tax and the tax system in our country. I get it. We're taxed so that we can have roads and bridges and so forth. I get it. I get all the talking points. But what I don't get is why this continuous drumbeat about taxing the rich, taxing them for their fair share of taxes. Well, guess what? If you're wealthy in this country and you're in the top 1% or 10%, and there are tax laws that exist so that you get away with paying the minimum amount of taxes on your wealth or income, then why wouldn't you take advantage of it? Every member of Congress does, and members of Congress ingratiate themselves by being in Congress. And a lot of times people come in making average money on a yearly basis, and then they leave Congress and all of a sudden they become millionaires, or worse yet, they become millionaires while serving in a government position, a position that they are elected to by we the people. That is disgusting that anyone would go into Congress and take advantage of that situation, essentially take advantage of us, the people who elected them to their position, and they become amazingly wealthy because of it. I don't think that's what the founders had in mind at all, ladies and gentlemen. Well, listen, I hope that I've given you some things to think about, and I hope that you actually do think about them, that you do your research. I said long ago when I first started the podcast that I was not going to spoon feed you. I have too much respect for individual intelligence and motivation to spoon feed people. If you want to find something out, then go find it out. Try to find the truth because there's so much annoying untruth out there. In fact, there's just outright lies that you find on the internet and elsewhere. It's difficult to find the truth. But that is what we seek. That's what I seek. I want to seek the truth and the things that I discuss on this podcast. And if I make a mistake, I will come back and correct it. I'm a human being. I make mistakes. Sometimes I may misspeak, I may say something incorrectly. If it's pointed out to me, I will own it. That's what you do as a responsible human being, as a responsible citizen of our country. I'm going to close by reading a quote from Kevin O'Leary, and he said this quote, What I've learned to do and what has really helped me in maintaining growth in my own personal investing is anytime I pick up something I'm going to buy, I say to myself, Do I really need this? Because if I don't buy it, the money is going to be invested and make money every year for me while I'm sleeping. And unfortunately, if you ask me, we have many members of Congress who are asleep at the wheel, or worse yet, just plain drunk off their gourd, and have no desire to want to fix anything that they've been elected to do in Congress. It's irresponsible, and I dare say it's criminal. And it's about time we start holding people accountable to us because they work for us. We need to make the system work for us. And how do we do that? We have to elect people who are going to have respect and deference to the Constitution. And they need to have respect for the voters who put them in office. Wouldn't it be great if all these members of Congress had the same attitude about the taxpayers' money, had the same respect for the taxpayers' money that Kevin O'Leary does for his own wealth creation and his own money? I think it would be great, and I'm an optimist. The glass is always half full. Ladies and gentlemen, if you can think it, you can plan it. If you can plan it, you can do it.