Monday, March 22, 2004

Did George Bush send you a Dear John letter?

'Talk is cheap. It takes real money to buy whiskey.' That apparently goes for Social Security and Medicare as well as the War in Iraq--which, itself has cost $110 Billion as of April 4, 2004.

Check-it-out: page 2 of YOUR latest personal statement from the U. S. Social Security Administration. The President recently sent me two messages about family finances. The first came in that yearly statement each of us receives from the Social Security Administration.

It's the personalized report confirming how much our earnings have been in past years and very specific projections for monthly Social Security benefits at "early" retirement (now looking later) or "normal" retirement (ditto). For the first time in 30 years of looking at these reports, I now find the following warning in bold-faced type:

"Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2042, the payroll TAXES COLLECTED WILL BE ENOUGH TO PAY ONLY ABOUT 73% OF SCHEDULED BENEFITS." (Emphasis mine)

The second message was an appeal for contributions to Bush's 2004 Campaign. This package also included strong words about the President's leadership in reducing tax burdens on families like mine, and the usual promise of greater prosperity and security for all.

I found no mention of the following as we near the end Bush's 4-year term of office:

1) almost 50% increase in unemployment and LOSS of more than 2 million jobs in the US economy since his Inauguration--as compared with 23 million NEW jobs in Clinton's 2 terms;

2) rapid plunge from annual budget SURPLUS of $150 billlion to a crushing DEFICIT of $534 billion in the current fiscal year;

3) federal budget and tax policies set to produce cumulative deficits of $2.75 trillion over the next 10 years (Congressional Budget Office projection as of February 27, 2004);

4) this approaching budget trainwreck for Medicare as well as Social Security financing;

5) the benefit of those tax-cuts falling so disproportionately into the bank accounts of America's wealthiest families.

Speaking of the long-term outlook for Medicare and Social Security: a March 19 New York Times article (by E. L. Andrews and R Pear) warned of " estimates showing that the total gap between the cost of promised benefits and the revenues to pay for them is close to $50 trillion....Whereas the Bush Administration estimated last year that the long-term gap was $18 trillion over the next 75 years." Highlighting the recent sharp slide in the outlook for these vital programs, the NYT article noted: "In their report to Congress LAST YEAR (emphasis mine), the trustees of Medicare and Social Security...said Social Security had $3.5 trillion of 'unfunded obligations' over the next 75 years." ]

Now we grapple with a projected shortfall of $50 trillion--5 times the annual US GDP! This is an astounding shortfall. Not least for the approximately 70 million American families that must begin to prepare for those burdens. Of course, we don't know how many more (if ANY more) working families there might be in 35 or 40 years, let alone 75.

Yet if preparations begin now, for each of those 70,000 households the average annual set-asside to meet that long-term $50 trillion liability might itself require an additional $7,500 to $9,000 a year.


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