August 11, 2011

$@%&#, My Dad-in-Law Says

Den of thieves.
I should know better by now, of course, yet I continue to be amazed at the way they do things in Washington. Year after year they go on piling up fresh deficits in the budget, adding to the national debt. But when will we start paying down that bill?  Or when will we at least stop adding to it? No one seems to know. Worse (apart from the occasional campaign sound bite), we rarely even talk about it.

One thing everyone seems to agree on: Something must be done to rein in the “entitlement programs.” Social Security and Medicare are absolutely out of control. We could raise premiums. Or reduce benefits. Or deny benefits to people who are already independently wealthy, because they don’t really need it.

Say what?

Just the other day, my father in-law sent me an e-mail with an interesting perspective: “Entitlement, my $@%&#, I paid for this!” He had a point. This isn’t welfare or food stamps. It’s not a free service that we hand out to people who are down on their luck. These are services that I pay for, little by little each week by the sweat of my brow, based upon the ironclad promise that my government will provide for my needs in my old age.

If I retire at age 65, I will have been paying premiums into the Social Security and Medicare programs for just over 50 years. That’s tens of thousands of dollars in compulsory payments -- money I could have spent on a house or a car or college tuition or (since the money’s mine in the first place) -- Milk Duds, for that matter. 

Just imagine: A pension plan with hundreds of millions of captive customers who can’t opt out of your program. You can raise the required contribution, reduce the benefits, change the rules any way you want, any time you like, and you’re accountable to no one. Thousands of your customers die every year before they retire, and you get to keep their money.  Your board of directors can redirect the funds to other uses. And unlike every other pension plan in the country, you don’t have to grow the money by investing it in stock and bonds or pork bellies; instead, you simply pay off your current obligations with fresh contributions from new customers. (Wait, didn’t they just send Bernie Madoff to prison, for doing this very thing, but for a shorter time and on a much smaller scale? For the uninitiated, this is called a Ponzi scheme, and it’s illegal.)

Just imagine: A medical insurance plan where everyone has to spend decades paying premiums before they’re allowed to submit their first claim. Or even better, where thousands of your customers die every year before they’re qualified to file a claim and you get to keep their money. How is it possible to not make an obscene profit every year? I haven’t inquired at Aetna or Blue Cross, but I’m pretty sure they would love to get a piece of that action.
Man, I'm in the wrong business.

If any private pension fund or insurance company dared to operate this way, the feds would shut them down before you reach the end of this sentence. A judge would appoint someone to take over the operations, and the managers would go to jail. But if you’re the government? You can pretty much do as you please.

Now, some in Congress would like to abrogate that contract altogether and steal my money outright if I should happen to retire with too many cars, too many houses, or too much money in the bank. They say I don't need it. They say I should leave something on the table for someone else.  This is contemptible. It's just plain theft, pure and simple. Please, don't insult my intelligence by disguising it in some type of highbrow political doublespeak.

Will these "entitlements" be there for me sixteen years from now?  I'm not counting on it.

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