A Santa Clause Government: Seeds of Destruction?

A recent Associated Press article in my local newspaper, "Labor unions adjust to new reality under Obama," generated numerous thoughts which I feel are worthy of comment. The article opines  that labor forces face continued fights for
survival in high profile battles notably in Wisconsin and Ohio. In addition, it mentions that union leaders are disappointed that Obama has not produced jobs promised, and quotes Larry Hanley, president of the Amalgamated Transit Union as saying, "Obama campaigned big, but he's governing small."

So what is the problem? As an outsider to this conflict (I'm retired), I'm aware that the National Labor Relations Board is preventing Boeing from opening a new plant in South Carolina because it claims Boeing is going into a "free to work" state to halt union power.  Unions have also gotten exemptions with the Health Care Afford ability Act, and Obama has spoken out against Wisconsin Governor's efforts to control union power in his state. What more do they want? They want it all! It's human nature, and once one becomes dependent on benefits, it is difficult to relinquish them.

This problem, of complaints of inadequate government benefits, will only get worse in the future because of the delicate role our Federal Government has assumed over the past 80 years. Beginning with the New Deal, our government entered into new areas of social regulation by "providing" benefits for various social misfortunes.  Beginning with Social Security, these efforts have ballooned into a panoply of benefits ranging from medial care to home care, to special "exemptions" from numerous government oppressive requirements, farm benefits, and on and on and on. Our government has essentially positioned itself in the middle of distribution of property between different factions of public life. Unfortunately, this activity will only generate anger from both groups: the receivers will want more, and the "givers"--by force of government taxation-- will feel abused.

It is apparent why, over time, this would happen. People always have problems and
trouble. I am not denying that government may need to help under certain defined circumstances, but their needs to be some restraint on this spending because our system encourages it. Life is riddled with difficulty. Our "representatives" get elected to positions of power by promising help and benefits  to constituents, and over time, with continued growth, this "temptation" in our system has begun to show its flaws. Government always pays for "benefits" with other people's money, and the lack of personal responsibility with this vicarious spending leads to financial debt.  Benefits are only increasing and that will continue unless the system is challenged.

Particularly vulnerable to these "defects" in our type of government are the public service unions. The chart above shows the growth of public service unions. Better benefits, pensions, salaries, and other perks are the earmark of this type of employee-government relationship. It is one of the reasons that California is sliding into a financial sewer. Wisconsin is trying stop this trend, and the Governor's efforts have generated predictable union responses.

It is pathetic that the forces of maintaining this status quo in government have persisted in labeling the Tea Party with disparaging and vulgar terminology. It is the main force working to stop this spending trend. Liberals can't see their ideas--or don't want to-- and will persist in continuing to spend other peoples money at unsustainable levels. The Greecification of the United States is not far ahead unless we change our ways. Spending must be curtailed if our form of government is to survive.

I tend to view our 200+ year old government as a social experiment. Oh, we have some good features: Rights of the individual, the Bill of Rights, and the Declaration of Independence. But we have yet to discover, or openly admit  our "Achilles heel": the government doling out  of benefits to factions that realize they have the keys to the treasury because they obtain a majority status. The baby

boomers have not yet reached full voting power--it takes time for people to wake up-- but when they do, it will test our nation down to its very foundations. Will we all continue to vote for "our share" of the national giveaways, or submit to a reduction of these incipient self destructive schemes. I believe the 2012 may be a bellwether for our future.

The Budget Battle, Can America Survive?

The dismal science (economics) is not my strong suit. Listening to the news recently, and reading newspapers has left me with a gigantic headache. Debt, deficit, 46 billion now, 75 billion later, interest on the debt, costs, and debt limit, are terms being thrown around in the current Congressional debate about how to get us out of this impending catastrophe. I did find something this morning, however,  which helped to clarify this mess we are in, and it needs to be shared with all of us.

It was written by David Malpass--a much smarter person than I--who presents some of these incomprehensible facts in a way that even I  became frightened because of where we are headed. His insight is in an editorial in today's Wall Street Journal, and is entitled, "After Obama's Budget, Republicans Need a New Strategy." After reading the article, the title is correct, because it is obvious that someone needs a strategy--new or otherwise even if we are forced to hear the truth.

Mr. Malpass (a deputy assistant Treasury assistant secretary in the Regan administration) reports that the federal government is "spending $300 billion every month...and of that $120 billion is borrowed." How's that for responsible management? He goes on to reveal ever more frightening figures:

Our debt limit is currently $14.3 trillion and will have to grow to over $26 trillion over 10 years as the government spends $46 billion and takes in $39 billion in taxes.  I can't believe it. He goes on to talk about the unrealistic assumptions that Obama's numbers are based upon.

His budget assumes that "real growth will climb from an already wishful 4% in 2012 to 4.5% in 2013, and 4.2% in 2014--despite plans for sweeping  tax increases." His wish-list also assumes that the Federal Reserve will keep interest rates low; wages and salaries will grow 6.6% per year in 2013 and 2014, and inflation will be only around 2%. Obama projects unemployment to remain about 6%-8% during this period. Mr. Malpass astutely points out that all these fanciful dreams will occur in an environment with "no recessions, no inflation, big tax increases, and no wars."

He reveals our violation of generational responsibility by relating that "there is talk that Washington wants to begin issuing 100 year bonds--the government gets the money now by promising that our great-great-grandchildren will pay it back." How's that for inter-generational Justice. Is anyone listening?

If we don't face up to this challenge, it seems certain that we will be in for an economic tragedy, and I'm not certain that we have the national will to avert this disaster. Let's face it, we are a 220 year old experiment. Can a government continue to thrive if encourages citizens to elect leaders based on how much treasure they promise to spend on them?  No one is even touching the biggest chunks of this budget crisis--Medicare, Medicaid and Social Security--at this point because maybe we won't vote for them next time around if they do. Do I see a fundamental flaw here?

On top of all this, it seems to me that no one believes that this is a real problem with real money. On an individual level each of us tries to manage our money carefully-- it is clearly ours, and we know it. If we're irresponsible, we feel the pain. On a national level, it's  no one's money because it belongs to everyone else. There seems to be a mind-set here of detachment from the consequences. Could anything be more potentially dangerous?

When the President's Debt Commission released it's report in December 2010, the public's reaction was appalling: Don't touch my benefits! It's apparent that we need leadership, and so far I haven't seen any. Republican's now have the opportunity to be leaders. Will they take the "chance" of telling the truth and risking their position of power in the next Congress. Let's hope so.

Retirement, What Does it Mean?

I retired on January 1, 2011. Oh my God! Retired? "What are you going to do?" The most common question that points to  only part of the fear of this life changing event. I had worked since age 13, because my vigilant mother "kept me off the streets of Chicago" when I was growing up. Probably a prudent idea. I was a creative energetic young man and probably would have thought of many pranks to land me in the dog house.  Pranks like joining the Crandon gang-- we lived on Oglesby--and getting into rock fights with others in the neighborhood.  Even better, throwing a mud ball into the window of a neighbor during a quiet summer night. But I'm all "growed up" now, and have found it in me to retire.

Two specific thoughts encouraged me.  Two good reasons that compelled me to draw that inevitable line in the sand, and cross over. Retirement generates a lot of fears as it approaches, but my reasons pushed me into it. They are good reasons. When I was younger, I used to joke that I will retire after my first heart attack. Fortunately, that didn't happen.

Carrying on with that theme, however, my first reason was that IT DOESN'T GO ON FOREVER. I have seen too many of my close friends "leave" during my 68 years on this earth. Paul died of pancreatic cancer at about 42, and Wilson died in Viet Nam shortly after we graduated from college. Along the road ( I was a physician) I saw many folks who met their maker too early. I think my previous profession planted the idea of eventual demise firmly in my thoughtful psyche. It's going to happen to all of us and, even if we don't believe it, the end will come. I wanted some time to enjoy life while I still had the blessing of reasonable health. I also observed that I began to resemble the patients I was operating on as I vaulted into my 60s. I found that this observation was--along with the increased Motrin I was taking-- a helpful warning that I was getting older and the time for leaving had arrived.

My second reason for retiring was that I had practiced medicine long enough. That might sound strange because most elderly workers say they "like their job," and I did too. It's just that I wanted to give myself the gift of doing something else. I have always had multiple interests, but while working, I didn't have the time to develop any of them. I viewed this idea of the "gift" as a form of self-respect. It was these two sound ideas that forced me to take the big leap.

Will I have enough money put away to retire? (Most of us believe we will never have enough.) What will I do? How much will I miss all the people at work? Am I really getting that old? Don't you fall apart as soon as you stop working? Keep active, and use your brain. How's your memory?  As I invade my wife's space at home, will we have to adjust to each other? There are just too many pertinent questions to answer, and they kept me so busy, I didn't have time to worry about retirement. My two reasons carried me forward.

I understand that there are 78 million Baby Boomers-- those born between Jan. 1,1946 and December 31, 1964--and they are reaching the age of 65 at the rate of 10,000 every day for the next 19 years. That's a lot of old people. and many of the statistics don't look promising.

According to the Congressional Budget Office, it will pay out more in Social Security benefits in 2010 than it receives. The Illinois Teachers Retirement System is 61% underfunded at this time. Finally, by 2025, there will be two workers for each retiree; in 1950 there were 16 workers for each retiree. Financially, the system doesn't look too healthy. Keeping all those retirees comfortable will be an augean task.

Under the best of circumstances, retirement can be looked at as a "rebirth": new challenges, new possibilities, and if one is fortunate in health, a few years to do and see things that were previously beyond the reach of time and work obligations.

As a physician, I was  fortunate to have a career that gave me the privilege and the opportunity to help people in need. I am hoping that I can find other activities and continue to contribute in different ways.

As I work my way along this new road, using my time well is one of my biggest challenges. Time becomes more precious as I grow older, and the benefit of retirement gives me the opportunity to choose how I spend it and inevitably to shape my future.