This is the best post I have ever seen on the problem of demographics and entitlement spending, which is due to explode in about a few years. I’ll summarize so that you will click through and read this post for yourself. There is almost no text in the post, it is all graphs, and they are self explanatory. It will take your about 5 minutes to scare yourself into a coma.
Summary of the post:
There are 3 entitlement programs: social security, medicare and medicaid
These programs are funded by taxes on young people who are still working
These 3 programs currently cost 9% of GDP.
By 2050, the costs will have doubled to 18% GDP.
Some of this increase will be due to excess growth in health costs
And some of this increase will be due to demographics
Let me talk more about the demographics problem:
More people are living longer
That means that benefits are being paid out over more years, per person
A huge group of babies from the Baby Boom started retiring in 2008
But the number of younger workers who pay their benefits is not growing fast enough
The number of workers needed to pay each retiree’s benefits is shrinking
Taxes will have to increase, or benefits will have to decrease
Please read the article. It will help you to put Obama’s massive spending and tax hikes in perspective. By the way, this is a great post to forward to your friends and neighbor’s who voted for Obama who do not like to read about economics and finance.
UPDATE: Welcome visitors from IMAO.us! Thanks for the link Harvey!
Have you ever heard an American-Idol-watching Dummocrat approve of Obama plans to tax the rich? Watch this video from the Center for Freedom and Prosperity (H/T Hot Air) and learn the facts you’ll need to defeat them in a debate.
Here are a few more videos from America’s golden age when everyone could explain why the country was founded, and why our free market capitalist economy was the envy of the world. (I stole these from IMAO.us)
Despite the recession he inherited, 9-11, stock market scandals, Hurricane Katrina and two wars in Iraq and Afghanistan, the unemployment rate during the Bush years averaged out to 5.27%. (Misery Index)
Here’s a graph that may help you to understand how bad Obama really is, compared to Bush:
US Unemployment Rate
Clinton’s rate is good because Newt Gingrich was in charge of the House in 1994 onward, and the House is where all spending bills originate
Hot Air reports (with a graph) that the unemployment rate is worse than the White House predicted it would be if they hadn’t passed the stimulus:
We are heading towards double-digit unemployment and doing that while we incur the massive debt of the unstimulating stimulus package. We could just as easily have kept the money and ridden out the unemployment, much as we’re forced to do now, only being a lot poorer while doing it.
Why is this important? It demonstrates that the President and his economic advisers have gotten pretty much everything about this economic collapse wrong. Instead of contracting government spending and shoring up the credibility of the currency, they’re setting records in dissipating it instead. Instead of focusing on fixing the problem that government explicitly created — mortgage-backed securities — they’ve literally left that for last while they waste money chasing every Democratic constituency but ignoring the actual cancer in the financial system.
Bush was cutting into the deficit until the Democrats Community Reinvestment Act caught up with him in 2008. But Obama has ruined Bush’s effort to balance the budget, with his massive redistributions of wealth.
The national debt is skyrocketing. In 2009 publicly held debt is projected to jump to 54.8 percent of GDP, up from 40.8 percent in 2008. A year to year increase of this size hasn’t occurred since World War II. While the main causes of this massive increase – $787 trillion economic “stimulus” and the $700 billion Troubled Asset Relief Program (TARP) – are sure to be debated for some time, the truly freighting revelation should be not what has already taken place, but what our elected officials have planned.
President Obama’s budget, if passed, would send debt to levels 26.3 percent of GDP over current law. Although President Obama has publicly stated his desire to both bring down deficits and reform entitlements under his watch, his actions don’t match his words.
High tax rates cause the most productive people to stop working, costing us jobs. Obama is to blame. His total ignorance of economics means that he will be playing whack-a-mole with the US economy – always inventing new interventions into the market to fix the problems his last intervention caused.
WINTERY KNIGHT 