Fiscal Fact-Check: Deficit, Social Security, and Medicare

Updated March 16, 2015-

America’s economic system is in grave danger. Like your personal finances, fiscal discernment in U.S. public policy is important for our economic recovery.

A Harvard study reveals that massive U.S. borrowing and spending have wasted trillions of dollars in flawed efforts to stimulate the economy.

In addition, the study also reveals government spending causes companies to cut back.

ID-10034937 AmbroAmerican voters should demand what’s best for the citizenry now and for the generations to come.

Consider these salient facts:

The U.S. debt

This month, the U.S. has a $18+ trillion deficit and it’s still climbing.

The debt is tracked by different organizations, which you can watch in real time at two Web sites.

They are and

Countless countries actually own America

In June 2014, according to U.S. Treasury Department data, here were the 10 biggest owners of U.S. Treasurys:

1. China, Mainland – $1268.4 billion

2. Japan – $1219.5 billion

3. Belgium – $364.1 billion

4. Carib Bkg Ctrs 4/ – $308.3 billion

5. Oil Exporters 3/ $262.1 billion

6. Brazil – $253.7 billion

7. Taiwan – $179.4 billion

8. Switzerland – $175.9 billion

9. United Kingdom 2/ – $173.7 billion

10. Hong Kong – $158.2 billion

On the other hand, countless foreign governments own billions of dollars of U.S Treasury Securities.

Social Security now pays more in benefits than it collects in taxes

According to Social Security, there are too few Americans paying into the system, as workers retire. Millions of baby boomers have opted for early Social Security checks because they can’t get a job.

Five decades ago, in 1960, there were 4.9 Americans paying into Social Security for each person getting benefits. Now, there are only 2.8 workers. The Congressional Budget Office says the figures continue to worsen – only 1.9 workers will be paying for each beneficiary in 2035.

In 2012, the average retiree got $1,235. Disabled workers’ average was $1,111.

Some 56 million Americans get Social Security checks now, and the number will skyrocket to 91 million in 2035.

The Social Security situation worsens the federal budget deficit

Because the federal government and its agencies have spent far more than they get in tax revenue – Congress has been raiding Social Security, which used to have a surplus.

Congress justified the raids by ordering the Treasury Dept. to issue two special bonds, which are worth $2.7 trillion, for trust funds. One fund is for retirees and the other is for disability recipients.

Social Security is surviving by tapping into the interest from the trust funds. It’s forecast to be bankrupt in less than 20 years.

“In 2012, outlays exceeded noninterest income by about 7 percent, and CBO projects that the gap will average about 12 percent of tax revenues over the next decade. ” according to the Congressional Budget Office (CBO) Web site.

It gets worse.

“CBO projects that under current law, the DI trust fund will be exhausted in fiscal year 2017, and the OASI trust fund will be exhausted in 2033,” write the budgeters. “If a trust fund’s balance fell to zero and current revenues were insufficient to cover the benefits specified in law, the Social Security Administration would no longer have legal authority to pay full benefits when they were due.”

In 2012, Social Security was forecast to have a $166 billion shortfall, including the $112 billion from the temporary payroll tax reduction. The temporary reduction actually hurts American workers – as a result, they’ll earn less money for their retirement.

Social Security was scheduled to pay out $789 billion in 2012, but only receive $623 in payroll taxes.

Medicare’s fiscal issues are worsening

President Obama and his fellow Democrats claim they’re working to save Medicare. So far, the facts from the CBO show otherwise.

To partially fund ObamaCare, Democrats began taking $716 billion dollars from Medicare for nine years starting in 2013. What’s worse, the ObamaCare legislation implements more than 160 changes adversely affecting Medicare.

It also hurts health services. (See: Healthcare Crisis – What the Plight of Doctors Means to You)

Efforts to save Medicare are stymied by politics.

As a member of Congress, Paul Ryan (R-Wis.), introduced a plan that would upgrade Medicare and change the government’s role by providing senior citizens with grants, net amounts or vouchers – whatever term you choose to use.

Over a nine-year period, the CBO estimated it would have saved $30 billion and recipients would pay an out-of-pocket $6,400.

But 100 percent of the Democrats voted against the plan.

So, Rep. Ryan teamed up with a liberal counterpart – Sen. Ron Wyden (D-Ore.) to come up with a compromise. After Rep. Ryan was named as a running mate for Mitt Romney, Sen. Wyden sought to distance himself for political reasons. But he says he’s still committed to fixing Medicare’s fiscal problems.

Rep. Ryan’s new reform’s key elements:

— Senior citizens will be allowed to stay with the current system.

— No one over 55 would be affected. After 2023, 65-year-olds can choose either the status quo or a government-provided net amount.

— The average out-of-pocket expense to senior citizens will only be $800.

— Medicare would not go bankrupt.

Other issues affect the nation

They include consistently high unemployment or under-employment for workers seeking family wage jobs, sluggish economic growth, uncompetitive school systems, crumbling infrastructure, and increasing poverty (one out of six Americans).

There are pocketbook issues for everyone. Food costs have been climbing even before the drought, and motorists in many areas are suffering from high prices at gas stations.

So it doesn’t help with the administration imposing unnecessary regulations on the petroleum industry, assailed important exploration tax breaks, and hasn’t approved new areas for exploration.

As a matter of fact, both political parties have played a negative role:

— Pres. Bush didn’t veto one pork bill from the Republican-dominated Congress until six years into his presidency. The deficit started under his watch.

— The Obama Administration hasn’t kept one promise made to small business –the nation’s jobs engine – prior t0 the 2008 election. None of his policies has worked to solve the nation’s issues. The deficit continues to explode.

Such fiscal dysfunctions prompt this question: Why do we want to risk burdening our children and grandchildren?

Let’s insist on three Ps – productive public policies – to benefit this great nation. That means understanding the facts and taking steps for fiscal sanity.

From the Coach’s Corner, related issues:

— Nonpartisan Study: Obama’s Tax Plan Hits 53% of Business Earnings

— Is it Too Much to Ask For Civility and Honesty from Mr. Reid and the Press?

— Economic Analysis by noted economist Peter Morici, Ph.d.

“If you ever injected truth into politics you have no politics.”

-Will Rogers


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Image courtesy Ambro

Budget Debate: Will Legislature Read Seattle News Media Headlines?

Nov. 28, 2011

The headline on the Seattle PI Web site was startling. It read: “FACT CHECK: Has Wash. cut budget by $10.5B? Hardly.”

The headline and accompanying story questioned what appear to be misrepresentations by Gov. Chris Gregoire when she claimed Washington has slashed $10.8 billion from the state budget in the last three years. The cuts were her justification for proposing a sales tax increase to balance the budget.

My hope in the budget debate is that the Legislature will read such Seattle media headlines, as they meet in a special session this week to debate the budget deficit.

(Actually, the story appeared in the Seattle PI an hour after it first appeared in the Seattle Times. But, inexplicably, the Seattle Times deleted the story less than an hour after the PI story appeared.)

Reporter Mike Baker documented how the hundreds of so-called cuts are really spending increases that haven’t been implemented.

For example, the alleged cuts include:

  • $682 million in cost-of- living increases for education employees
  • $344 million in cost-of-living hikes for pensions
  • $1 billion in education cuts, but it hasn’t really been slashed because of student tuition increases
  • $128 million for an education apportionment payment, but the payment has actually been doled out
  • $69 million for state parks, but in reality the state took in that amount from user fees

Mr. Baker also reminded us that the state is ready to spend around $30 billion from the general fund budget. That’s more money than was spent in the more-recent budget cycle.

Because it was an Associate Press story, it soon appeared on 54 media sites.

The sales tax proposal is controversial for good reason, and why the sales tax debate erupted in Washington state.

Public officials have long violated good government standards on transparency and in spending. On multiple occasions, this column has called for reform and wondered why not transparency for good, open government in Washington state?

We need better public policy – here are a couple of examples:

  • Proposing to cut $160 million from state colleges and universities is unconscionable.
  • Special interests such as the Washington Federation of State Employees should be reasonable and agree to renegotiate labor contracts.

It’s easy to conclude from the Associated Press story that Washington state has a spending problem, not a revenue problem. For example, the State Auditor revealed state government spends $1.8 million for nearly 6,700 unused cell phones is only one example. We need more public officials to create a favorable economic environment.

Given the economy and continuous budget crises, Washington legislators should finally start compromising, stop the longtime practice of shell games and launch legitimate reform. Only then, will thoughtful businesspeople and voters trust Washington state government and consider a sales tax increase.

So, in the budget debate: Will the Legislature read the Seattle news media headlines? It’s time for good government.

From the Coach’s Corner, furthermore, the state can create more tax revenue if it encourages entrepreneurship to create jobs. Here’s What Small Business Owners Need from Washington State Policymakers.

Here’s another no-brainer: How Washington Fails in Filmmaking for Economic Development.

“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.

-George Washington


Columnist Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Only Fiscal Sobriety Will Prevent Further Fiscal Chaos

We’re way past the deadline to demonstrate financial leadership. It’s time for economic fundamentals and teamwork focused on economic patriotism.

As the world’s largest-economy, threats for a double-dip recession will only worsen unless the Unites States stops the fiscal dysfunction. In fact, not only is the U.S. economy is danger, so are world markets.

ID-100204915 sscreationsBusinesspeople experience chaos, chaos and more chaos everyday.

With a $19-trillion-dollar+ deficit, investors and average Americans aren’t confident that the Obama Administration and Congress are competent enough in public policy. Voters are sick and tired about the bickering and finger-pointing.

Virtually all polls show support for ObamaCare and the president himself are plummeting. A CNN poll suggests 53 percent of Americans don’t trust Mr. Obama. Tech experts say the ObamaCare Web site is too risky (Poor security on Obamacare site could sacrifice private info).

Fourteen million Americans are out of work. The catalysts are the economy, advances in technology and business greed for cutting labor costs to show profits.

Despite what the Obama Administration claims, the S&P downgrade of the U.S. credit rating was justified. If a family or a company’s credit situation is lousy and cash flow is poor, they don’t qualify for loans, period.

All of that stimulus spending hasn’t turbo-charged the economy.

“This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.”

-Will Rogers

The challenges are many:

  • Capital isn’t circulating.
  • Consumers have cut spending.
  • Businesses aren’t hiring.
  • Money isn’t being lent.
  • Despite efforts by the Small Business Administration to promote loans, the majority of small companies don’t have the collateral, credit and cash flow to qualify for a loan.
  • Don’t forget the obnoxious greed on Wall Street, which helped cause the meltdown.
  • Precious little is being manufactured.
  • Many investors have more confidence in gold.
  • The trade deficit is exacerbated by manipulation of currencies by China, India and Japan.

The blame game has become onerous, and few politicians – from the White House to Congress – have offered constructive ideas. What we need is balance and compromise. Move to the middle, please.

To Democrats: Cut spending.

To Republicans: Quit attacking Social Security and Medicare as entitlements instead of lifelines, and reconsider the Bush tax cuts for the wealthy. (Note to Republicans, Democrats aren’t the only culpable spenders. Lest I forget, Mr. Bush waited six years before vetoing any pork bills in a GOP-dominated Congress.)

To both parties: Stop the hometown pork to get re-elected, shun unnecessary risk, and simplify the tax code. Consider all options, including the call by Steve Forbes for a 10 percent flat tax.

To the White House: Wake up to realities. Hire bipartisan economists.

Remember why this nation was founded. At-risk are all of our political and economic liberties.

Now, can we get sober fiscally and agree to roll up our sleeves?

From the Coach’s Corner, here are additional resource links on public policy:

“This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.”

-Will Rogers


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Image courtesy of sscreations at

Oxymorons: ‘Healthcare Reform’ and ‘Public Servants’


Updated July 4, 2010

Agreed, healthcare is expensive and too many American businesses and workers can’t afford it. Healthcare reform is a great idea if it benefits the welfare of the United States and the citizenry.

So let’s consider the issue and agree on these benchmarks as goals:

  • Increase access to healthcare
  • Provide affordable insurance
  • Improve healthcare quality and optimize the safety of patients 

Unfortunately, Congress failed to achieve such lofty goals with the legislation.

We’ve heard a lot about the requirement for universal participation that would require expensive penalties for nonparticipants. Additionally, in a Boston Globe column, CPA Jamie Downey warned the bill contained 19 tax increases: Tax increases abound in healthcare reform legislation.

Polls show more than half of Americans still oppose the controversial healthcare reforms.

The so-called reform presents new unforeseen costs. Congress has already raised the national debt limit to $14 trillion. The unemployment nightmare is heartbreaking to millions of Americans. And there are “New Threats to Economic Liberty: Cap-and-Trade, Spending Bills.”

The deficit is a quagmire that few in Congress and the Obama Administration lack the wisdom and the will to correct. The economy and job creation should have been the priority.

In a side debate, Senate Majority Leader Harry Reid reportedly said future Congresses cannot repeal parts of his bill. On the floor, Sen. Jim DeMint (R-SC) pointed out hidden changes to Senate rules in the bill cannot be repealed by future Congresses.

In a television interview, Nebraska Gov. Dave Heineman said Sen. Nelson’s maneuver for favortism to his state embarrassed him.

The governor should be embarrassed.

But the tyrannical reform nonsense may become meaningless. Look for the courts to act. The Associated Press reported that seven state attorneys general are investigating the Nelson extortion. They include Alabama, Colorado, Michigan, North Dakota, South Carolina, Texas and Washington.

Being based in the greater Seattle area, I am pleased by the common sense of Washington Attorney General Rob McKenna for opposing the chicanery – besides, forcing Americans to buy anything is un-American.

Nonetheless, the administration and Congress are defied the will of the people.

Healthcare reform is a failure for America and its workers, and is disastrous for business. While the goal is admirable, the resulting emotional and financial stresses on government, employers and workers defeat the purpose. The associated figurative and literal costs are prohibitive. And the means to the end are disingenuous.

Our economic and political liberties are being stolen from us.

So meet your oxymorons: Healthcare reform and public servants.

From the Coach’s Corner, the popularity and legality of the law are still being debated: No, Health Care Reform Is Not Very Popular; ‎Healthcare reform law arguments heard in Virginia courtroom

Seattle business consultant Terry Corbell provides high-performance management services and strategies.