Soft Truth or Hard Truth? Take Your Pick.

I submitted a letter to the Joplin Globe editor this week.  It hasn’t run yet and of course I can’t be sure it will, but it says something simple about the debt crisis that I think is worth repeating, so here it is (below) in blog form.

A Joplin Globe editorial caught my attention Tuesday (8/9/2011), not because it was controversial, or pithy, or new, but because it was none of those things. Titled “Time To Wise Up”, I would summarize it in my own words this way:

It sometimes makes sense for government to borrow money, just as it does for families, but it is just common sense that borrowed money needs to be spent wisely. However, the current economic woes have been caused by the government of the U.S. borrowing too much money and then not spending it wisely.

The editorial ends with, “Our rather simple conclusion is that it is time for our national leaders to ‘wise up’ in the way we use our borrowed money.”

I think this leaves the public with the impression that the $14.2 Trillion national debt and the federal budget deficit, wherein we now borrow 42 cents of every dollar spent, are due “simply” to rash spending by those unspecified “leaders”, and that it can be fixed by stopping such behavior. The truth is that this completely mischaracterizes the problem. The problem is not current discretionary spending but established entitlement spending.

2010 Federal Spending

Based on the Wikipedia page for the 2010 federal budget, discretionary spending amounts to only 19% of the total and that 19% includes running the entire bloated government itself, all the departments (except DOD) and all the agencies. The DOD (Department of Defense) is 20% and other “mandatory” commitments are 12%. Together, Medicare, Medicaid and Social Security account for a whopping 43% of the budget. (6% is interest on the debt and that’s growing fast.)

The problem is not simply unwise spending by the current “leaders”, it is that past “leaders” have painted us into a corner on entitlements. Until we face that fact, no facile exhortations to “leaders” are going to fix this dilemma. We need entitlement reform, and soon. The Joplin Globe should know better. If the press won’t tell us the hard truth, who will? It is obvious our “leaders” won’t.

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About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Independent, tending progressive as the GOP recedes from its Eisenhower roots.
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7 Responses to Soft Truth or Hard Truth? Take Your Pick.

  1. IzaakMak says:

    Well said Jim. Unfortunately, truth from the media these days is about as rare as it is from the politicians.

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  2. johncerickson says:

    I find it intriguing to compare our problems with debt, with those of the EU countries having the same problems, and their answers. Every country that has received an ECB bailout has “massaged” entitlements, especially for retirement. Ages have gone up, and amounts have been reduced. Whenever recommendations for deficit reduction are provided, they are primarily directed towards these entitlements. Our bankers and financial “experts” applaud these moves, at least overseas, as “sensible reductions”.
    Sounds just a bit familiar, doesn’t it, Jim? 😉

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    • Jim Wheeler says:

      Well, familiar in the sense that the same thing is the obvious solution to our problem as well, John. And when you consider the statistics, it makes sense. People are living much longer than they used to. In the nineteenth century you were old in your 60’s. Now the average is what, 78? But there is much more to the story because there is so much more medicine can do now, and it comes at a very high price. When I had my tonsils out about 1942, the anesthetic was ether and the only drug available to fight infection was sulfathiazole. No antibiotics of any kind in the general supply, no CAT scans, no MRI’s, no transplants, no heart bypasses, no stints, no gene technology. Now we not only have great technology but all the burgeoning needs that come with advanced age and, for the majority, obesity. The entire healthcare landscape has changed and it’s foolish to think its cost would be stable.

      Europeans seem to be able to make such changes easier than we can, for some reason. I do know that in the U.K., the executive controls the money and not the legislative as in the U.S. That makes the decisions easier, of course. The riots come later. 😦

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  3. ansonburlingame says:

    Jim,

    You jump to a wrong conclusion in my view. Borrowing 42 cents on every federal dollar spend is UNWISE, very UNWISE and we should “wise up” in fixing that mess. The editorial did NOT suggest how to fix it, just wise up and get it fixed was the message. You could raise taxes, cut spending, do a combination or whatever. But the FACT that we borrow 42% to “live” on a daily basis for the federal governent AND that number is increasing dramatically is just WRONG, in the view of the editorial.

    Additonally the editorial did not say WHICH decisions were unwise or when they occurred.

    You JUMP to the conclusion that discretionary spending might have been the target but that was not said or implied.

    You with your “sensitivity” you may have considered it as a shot at Obama only but that was not at all the case if you read and think about what the editorial really said.

    The implication of the editorial is we are in an “unwise” position, economically today and as of yet do not know how to get out of it, politically. That lack of a credible political plan from either side today is, in and of itself, unwise in the view of the Globe.

    Anson

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    • Jim Wheeler says:

      You are right, Anson, that the editorial was not explicit about just which decisions were wrong, or that discretionary spending should be the fix. But it was the vagueness of the message that prompted my criticism. That and the glaring need that the editorial ignores, just as all politicians and even the rest of the press ignore. The spending chart spells it out. Entitlement reform is a must.

      Yes, there are many other things that can be cut, two of which would be federally subsidized air service for small towns like Joplin that traffic won’t support, and federally subsidized tornado shelters for private residences in Joplin. Neither of those makes statistical sense, and yet our conservative leaders are plunging in for those federal dollars. But the central point remains: No matter what other stuff you cut, even if you eviscerate the whole government, the debt problem can not be fixed without fixing entitlements.

      Doesn’t it frustrate you that not even the newspaper will call for the obvious pain that is needed? It sure does me. You decry the “lack of a political plan”, do you not? The plan is right in front of everyone’s eyes but they don’t want to read it. The pie chart tells the story and points to action that can not be avoided. The entitlement programs must be cut back. Pain is required. The public needs to “man up”, but the leaders won’t tell them and the newspaper won’t tell them. But I will. (All two dozen of them who read my stuff. 🙄 )

      Jim

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  4. ansonburlingame says:

    Once again from this side, Jim,

    Absolutely “pain” from EVERYONE is needed to get control of our debt. No doubt about it. And for politicians of any sort to suggest that we can “do a little here and do a little there” to achieve the needed reform in federal revenue/spending issues, is disengenuous to say the least, in my view.

    I also agree with you that entilement reform is needed, big entitilement reform. But that alone won’t “do it” either. Defense cuts of huge proportions is required, “nation building” must be changed, etc. How the federal government “get’s out” of some things and leaves them totally to states is another, like probably education funding reform, which of course means education reform itself.

    You and I are close on the fundamental issues but start to diverge on the specifics.

    The edit, which of course I wrote, did NOT try to send any of that more detailed message. It simply tried to say ALL politicians, the people that HAVE to make the plans and choices, must “wise up” to fix things that have been building up over decades to lead us to this “crisis”.

    Of course in my blogs I go much deeper than the editorial, such as HOW to cut Medicare, etc. But the Globe is not going to take a position of such details now. They will wait for clear “Plans” (not speeches) that may compete with one another and then come down one way or the other. It is a newspapers job to provide a critique on both general and when available specific “plans” or campaigns. But the Globe is not going to provide a detailed “plan’ of its own in a 300 word edtorial, for sure.

    Finally, I leave my critique of your letter to these blog pages. I won’t bother with a “pity” online comment. It is too complicated an issue for “pithy”.

    Anson

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  5. hlgaskins says:

    Jim

    I agree that entitlements are a problem that we’re going to have to deal with, and I also agree that a lot of our issues are the result of poor governmental management. There’s no question that Social Security takes up a large chunk of our total national debt. If the government had left Social Security alone, it would still have over $2.6 trillion in its trust fund, which could then be added to the annual Social Security taxes paid by American citizens. We all know that SS payroll taxes coming in are now less than the amount going out, and probably will be for the next 20 years or so. The trust fund plus accrued taxes was meant to compensate that until the “Baby Boom generation died off.

    Before 1980 Social Security was still receiving more funds in payroll taxes than it was paying out to retirees. As we all know, during the Reagan administration Greenspan was given the task of resolving Social Security funding requirements when “Baby Boomers” came of age. The outcome of that was increased Social Security Payroll taxes that brought more money in than was going out which created a $2.6 trillion reserve. This sadly was also a beginning to our current financial predicament, because Reagan had not intention of leaving that money sitting dormant, and he no intention of collecting that money to prepare for “Baby Boomer” retirement.

    Reagan cast aside America’s previous fiscal policies of “tax and spend” to a “borrow and spend” policy, where the government continued to spend beyond its means using borrowed money. The Social Security $2.6 trillion fund, left both Reagan and the Congress awash in non foreign capital to borrow against, and borrow they did. This new fiscal philosophy was directionality referred to by republicans as “starve the beast,” Which meant that if the governments deficits became severe enough, then we would be forced to put an end to Social Security, Medicare/Medicaid, and even government funded public education. Unfortunately that’s not what happened because the government continued to borrow and spend.

    The point I’m making is that American citizens in good faith paid into Social Security, and I have no doubt that they will be willing to accept even higher SS payroll taxes. After all it benefits them and their families, that is, if the government will leave it alone. I also think that it’s time to means test Social Security and Medicare, however it’s quite impossible to include Medicaid without hurting the poor and the infirm.

    “It sometimes makes sense for government to borrow money, just as it does for families, but it is just common sense that borrowed money needs to be spent wisely. However, the current economic woes have been caused by the government of the U.S. borrowing too much money and then not spending it wisely.”

    We not only didn’t spend it wisely, but we’ve also used it as a carrot to catch the eyes of large donors, and as a feed to a private sector only concerned with profit. As long as the hands of greed are allowed to “pluck from the nations till,” we’ll have deficits. HLG

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