Pat
Supporter
I would like to introduce you to my wonderful Granddaughter Emily and tell you some things about her. She’s 7 months old and is amazing. She loves to be in the center of conversation and adds her babble when you look at her. If you put your face near hers and tell her you love her, she will try to give you a kiss. She loves to hear her mother, a classically trained opera singer, practice and at the top of her lungs tries to sing along. It is hysterical.
There are some other things about Emily that I think about - a lot. According to the OMB Medicare Hospital funding will run dry in 2024. Emily will be 13. The so called Social Security “trust fund” will be bankrupt in 2036. Emily will be 25. She dare not be injured on the job as Social Security Disability runs out of money in 2018 a dozen years before she is old enough for her first job. In all likelihood, she will need to pay a full social security tax to fund current obligations for her parents and grandparents her entire working life and will at best receive a fractional benefit herself. Currently no one is paying into the social security system due to the “tax holiday”.
When Emily is 18 and ready for work, Fred Bergsten, former assistant secretary of international affairs for the Treasury, projected that annual current federal deficit will thus climb to almost $6 trillion by 2030, more than seven times its previous high,” he wrote. “Such a sum would account for more than 15 percent of GDP, or two and a half times the peak rate of 2006, and would be at least triple the accepted international norm for sustainable current account deficits, which is four or, at most, five percent of GDP.” He further predicted that by 2030, the United States will be paying $2.5 trillion a year to the rest of the world, equal to the nation’s current total spending on health care, just to pay the interest on U.S. debt. It is projected to be $50 trillion.
Emily will face college costs that will probably be unobtainable. Data from the College Board projects a bachelor’s degree would cost the class of 2034 in 2011 dollars. The result: Total tuition and fees would top $232,000 for an average-priced four-year private college and nearly $81,000 at an average-priced public university — up 111 percent and 167 percent, respectively, from the average class of 2012 tuition. If she sought college, she would need to be able to sing like her mother, play the trumpet like her aunt and scholarship or go deeply into debt. (It is unlikely she would be able to work offshore on oil rigs like her grandfather).
Savings for her own home, family or college will be a challenge. According to Daniel Shaviro, Professor of Taxation at New York University Law School, "Today ... a family of four making the median income — $94,900 — pays 15 percent in federal taxes. By 2035, under the C.B.O. projection, payroll and income taxes would claim 25 percent of that family’s paycheck. The marginal tax rate on labor income would rise from 29 percent to 38 percent. Federal tax revenue, which has averaged 18 percent of G.D.P. since World War II, would hit 23 percent by the 2030s and climb even higher after that.
"Such unprecedented levels of taxation would throw up hurdles to entrepreneurship, family formation and upward mobility. (Or as the C.B.O. puts it, in its understated way, they would 'tend to discourage some economic activity,' and 'harm the economy through the impact on people’s decisions about how much to work and save.')
This is not the world I want Emily to face. So I’m a conservative that wants smaller government, fiscal restraint and the ability for Emily to determine her own future without the “discouragement” of government dependency or insolvency. And I deeply hope I’m wrong…
There are some other things about Emily that I think about - a lot. According to the OMB Medicare Hospital funding will run dry in 2024. Emily will be 13. The so called Social Security “trust fund” will be bankrupt in 2036. Emily will be 25. She dare not be injured on the job as Social Security Disability runs out of money in 2018 a dozen years before she is old enough for her first job. In all likelihood, she will need to pay a full social security tax to fund current obligations for her parents and grandparents her entire working life and will at best receive a fractional benefit herself. Currently no one is paying into the social security system due to the “tax holiday”.
When Emily is 18 and ready for work, Fred Bergsten, former assistant secretary of international affairs for the Treasury, projected that annual current federal deficit will thus climb to almost $6 trillion by 2030, more than seven times its previous high,” he wrote. “Such a sum would account for more than 15 percent of GDP, or two and a half times the peak rate of 2006, and would be at least triple the accepted international norm for sustainable current account deficits, which is four or, at most, five percent of GDP.” He further predicted that by 2030, the United States will be paying $2.5 trillion a year to the rest of the world, equal to the nation’s current total spending on health care, just to pay the interest on U.S. debt. It is projected to be $50 trillion.
Emily will face college costs that will probably be unobtainable. Data from the College Board projects a bachelor’s degree would cost the class of 2034 in 2011 dollars. The result: Total tuition and fees would top $232,000 for an average-priced four-year private college and nearly $81,000 at an average-priced public university — up 111 percent and 167 percent, respectively, from the average class of 2012 tuition. If she sought college, she would need to be able to sing like her mother, play the trumpet like her aunt and scholarship or go deeply into debt. (It is unlikely she would be able to work offshore on oil rigs like her grandfather).
Savings for her own home, family or college will be a challenge. According to Daniel Shaviro, Professor of Taxation at New York University Law School, "Today ... a family of four making the median income — $94,900 — pays 15 percent in federal taxes. By 2035, under the C.B.O. projection, payroll and income taxes would claim 25 percent of that family’s paycheck. The marginal tax rate on labor income would rise from 29 percent to 38 percent. Federal tax revenue, which has averaged 18 percent of G.D.P. since World War II, would hit 23 percent by the 2030s and climb even higher after that.
"Such unprecedented levels of taxation would throw up hurdles to entrepreneurship, family formation and upward mobility. (Or as the C.B.O. puts it, in its understated way, they would 'tend to discourage some economic activity,' and 'harm the economy through the impact on people’s decisions about how much to work and save.')
This is not the world I want Emily to face. So I’m a conservative that wants smaller government, fiscal restraint and the ability for Emily to determine her own future without the “discouragement” of government dependency or insolvency. And I deeply hope I’m wrong…