Tuesday, April 24, 2012

Social Security heading for insolvency even faster | What does this mean for Next Generation of Americans?

I was reading and listening to news reports on the state of Social Security in America.  It is reported that SS will be bankrupt by 2033.  It just so happens that I’m supposed to start getting SS in 2033 after paying into the system for 50 years.  Does that mean I can stop paying into a system that I won’t get anything out of?  The short answer is no.  Nobody offers that as a solution.

Social Security was enacted as legislation under Franklin Delano Roosevelt’s first term as president in 1935.  When it dies in 2033, it will be a painful slow death.  I guess 98 is a ripe old age to live.

This article and the current estimates totally under-project the strain on the system once baby-boomers retire at about 80 million additional SS recipients.  As stated in the this article, “America’s aging population — increased by millions of retiring baby boomers — is straining both Social Security and Medicare.”

What are the options?  Again, the article suggest that, “Potential options to reduce Social Security costs include raising the full retirement age, which already is being gradually increased to 67, reducing annual benefit increases and limiting benefits for wealthier Americans.”  Let’s see, I have to wait longer to get SS and I get less when I get there. I’m sorry, but I’m not buying that bag of B.S., and the next generation of American shouldn’t either.

If those options don’t work, then we could let them try this option.  “Policymakers could also increase the amount of wages that are subject to Social Security taxes. Social Security is financed by a 6.2 percent tax on the first $110,100 in workers’ wages. It is paid by both employers and workers. Congress temporarily reduced the tax on workers to 4.2 percent for 2011 and 2012, though the program’s finances are being made whole through increased government borrowing.”  Oh, so we now want to tax more of my income so I can pay longer into a system that won’t give me anything when I retire.  Again, not a solution. I hope the younger generations come up with something better, because it’s clear that the current generation is clueless.

Check out Inert America on Amazon and read the chapter where I describe the Power of Ten to better understand the real dilemma of SS and Medicare.

Social Security heading for insolvency even faster | FOX6Now.com – Milwaukee News & weather from WITI Television FOX6

Stay tuned.

 

Gary W. Griffin, Ph.D.

Tuesday, October 11, 2011

Occupy Wall Street? America Needs An "OccuParty"

This is a new article in Forbes today.  The article suggests we need a new political party.  It states, “The occupiers are infuriated because they believe banks stole from them while Tea Partiers are outraged because they believe Big Government stole from them. They’re both right.

Yes, this is right. Both are angry, and both have a right to be angry. I have read many people’s posts on various sites where Tea Partiers are pointing the finger at the "Occupy Wall Street" crowd and saying how they're nothing like these folks. When Tea Partiers were protesting on Wall Street, others were saying the same thing about them. The fact is that both are right, because politics and economics are closely intertwined -- it's called political economy. The truth is that instead of fighting amongst themselves and dividing along some imaginary line, they should be pulling together to bring about the real systemic changes that are so needed in America.

In another quote,”Big Government stole taxpayer dollars to bail out banks, which are now in possession of our stolen property. The Occupiers and the Tea Partiers should really disassociate from both political parties and work together to dissolve the crony relationship between Big Government and Big Business. End the Fed.”

This article is a must read.  It really lays out that both movements – Occupy Wall Street and Tea Party – have more in common than they realize.  What we really need is for someone to step out and pull them together rather than letting Washington elites continue to divide the nation along some imaginary line.  This is the only way to truly change the status quo.

As I write in Inert America,

“As Machiavelli observed in 1515, “there is nothing more difficult to execute, nor more dubious of success, nor more dangerous to administer than to introduce a new system of things, for he who introduces it has all those who profit from the old system as his enemies.”

Dr. Gary W. Griffin is the author the new book, “Inert America: Crossroad to the Future.” He can be reached at ggriffin@mindspring.com for comments and questions.

Stay Tuned.

 

Gary W. Griffin, Ph.D.

Monday, October 3, 2011

Three Reasons a New Jobs Plan Won’t Work

The President is set to push forward another “job creation” plan. His reasoning, it will help America to avoid another recession. Unfortunately, most people would say that they’ve not gotten past the first recession.

This idea that we need to create more new jobs as the answer to getting America out of the economic calamity that has befallen the nation is simply false. Job creation isn’t the main problem. Therefore, spending more money we don’t have will not have any impact. The best strategy is to put into place social policies that allow almost 80 million baby boomers to retire and exit the job market over the next decade. The problem then becomes one of enough workers instead of enough jobs.

Most baby boomers prior to the collapse of the housing bubble would probably say they were ready for retirement. The collapse of the housing market sent their home values plunging and changed that plan. A new jobs bill won’t restore their home values; a major source of investment that many use as retirement income.

Baby boomers who saved for retirement have watched the value of their nest eggs dwindle to only about 50% what it was only 5 or 10 years ago. Recent policies from the Federal Reserve have served only to reduce the buying power of those nest eggs. This means that baby boomers who thought they had enough for retirement must now continue to work. A new jobs bill won’t restore the lost value of the dollar.

The current political rhetoric is focused on major reforms of Social Security and Medicare. These programs are major sources of retirement for aging Americans. Baby boomers are now faced with the possibility that it will be reduced, or worst yet, non-existent for their retirement. Subsequently, those who would retire have no choice but to continue to work. A new jobs bill won’t ensure Social Security and Medicare’s survival.

If we’re going to spend another 500 billion dollars of taxpayer money, let’s do it retrofitting 100 million American homes to run off of solar power starting with baby boomers who will hit retirement age over the next 5 years. This will be major source of income for boomers who could sell excess energy back to the energy companies. It would drive up home values. It would immediately improve building and construction in the housing market. It would create jobs.

Change these bad fiscal and monetary policies. No more quantitative easing. Raise interest rates. Reduce the money supply. In short, restore the value of the U.S. dollar.

Unfortunately, baby boomers are going to have to pay for retirement even when they are retired. To save and fund Social Security and Medicare over the next decade, we have to change our tax structure. Retired baby boomers won’t be working, so simply funding these through income taxes just won’t do it. A new tax structure that is based on consumption, such as the Fair Tax, is the only way to accomplish this feat. This necessarily mandates a constitutional amendment that taxes collected must be used for the purpose of funding domestic needs with Social Security and Medicare receiving priority.

Problem solved. It’s simple. It’s elegant. It’s smart. Washington, you may not have come up with it, but please don’t let that stop you.

Dr. Gary W. Griffin is the author the new book, “Inert America: Crossroad to the Future.” He can be reached at ggriffin@mindspring.com for comments and questions.

Stay tuned,

Gary

Thursday, February 17, 2011

The State of Education in the U.S.–Excerpt from Chapter 8: The Power of Ten

In 2007, Americans stood second only to Canada in the percentage of thirty five- to sixty-four-year-olds holding at least two-year degrees. Among twenty five- to thirty-four-year-olds, the country stands tenth. The nation stands fifteen out of twenty-nine rated nations for college completion rates, slightly above Mexico and Turkey. The U.S. Department of Education’s 2003 statistics suggest that 14 percent of the population (or thirty-two million adults) have very low literacy skills. However, this is but one picture of education in America.

We cannot separate primary from secondary education. We cannot separate secondary from postsecondary. We cannot separate the education experiences in high school or college from the skills needed in workforce. While there may be many reasons to get an education, one of the realities of education is that it teaches skills and transfers knowledge from the current generation to the next in order to prepare them to enter into adult life as a productive member of American society. From this view, education is not a self-betterment proposition; it’s an economic proposition. When we lose those individuals before they’ve completed their high school graduation, it is a serious blow to the future of America.

“High dropout rates are a silent epidemic afflicting our nation’s high schools. The dropout epidemic in the United States disproportionately affects young people who are low-income, minority, urban, single-parent children attending large, public high schools in the inner city. But the problem is not unique to young people in such circumstances. Nationally, research puts the graduation rate between 68 and 71 percent which means that almost one-third of all public high school students in America fail to graduate.” In this same report, of those they interviewed, the top reason given for leaving schools was that classes were not interesting. Additionally, another reported statistic was that 81 percent of those dropouts interviewed said that what would’ve improved the chances of staying in school were opportunities for real-world learning to make classes more relevant. This report is telling because it illustrates that what is going on in the classroom is far removed from what is going on around students. That is, the classroom experience doesn’t reflect the real-world experience.

“Over a million of the students who enter ninth grade each fall fail to graduate with their peers four years later. In fact, about seven thousand students drop out every school day. Perhaps this statistic was acceptable fifty years ago, but the era in which a high school dropout could earn a living wage has ended in the United States. Dropouts significantly diminish their chances to secure a good job and a promising future. Moreover, not only do the individuals themselves suffer, but each class of dropouts is responsible for substantial financial and social costs to the communities, states, and country in which they live.”  The cost of dropouts to our nation is extremely high—a cost that we cannot afford over the next decade. How high? “Dropouts from the Class of 2008 alone will  cost the nation more than $319 billion in lost wages over the course of their lifetimes.”

Read Inert America to find out how this contributes to the “Inert America” condition.

Wednesday, February 16, 2011

Excerpt from Chapter 8: The Power of Ten

In the twenty-first century, education is as important to the information society as the assembly line was to the industrial society. The first Model Ts off the assembly line weren’t that appealing, but they got America moving and ushered in new era of prosperity. Education can do the same thing for America in the twenty-first century. It’s not the education of yesterday though. It’s the education of the twenty-first century. We need a totally new education model. This model has to fit with the social, political, economic, and philosophical structures of a twenty-first-century American society. It has to support and facilitate a new way of teaching, a new way of learning, a new classroom model, and a new school model. In sum, we have to have a new education model. This type of transition won’t be easy, but it’s necessary. Prosperity of future generations depends on its successful implementation.130 As I illustrate in this chapter, we can show how and why education needs to change by simply taking the demographic makeup of ten American citizens and then based on a simple projection of those demographic trends over the next decade, see the clear direction of America if we continue down this path. It is the power of ten.

Read Inert America to understand the Power of Ten and how it will create the future welfare state of America if we don’t stop it now.

Thursday, February 10, 2011

Inert America–Excerpt from Chapter 7 on Political Economy

 

Our political and economic leaders seem perfectly willing to debate the problems facing America, especially middle-class America by standing firmly on their philosophical and political ideologies, so long as they and their families have food to eat. When the average American has nothing to eat, time seems to matter little. However, if our leaders had nothing to eat, they would find themselves in a position where they are a little more humble and a little more willing
to compromise their principles, since principles won’t fill a belly.


In the twenty-first century, individuals are the producers. In order to produce, they must also be free, that is, they must have liberty. Not some liberty, but absolute liberty because freedom of choice is what makes liberty possible. Choices are what drive a style of living or lifestyle, and a lifestyle is made possible by a standard of living.


Of course, this type of liberty is not unrestrained and anarchistic as some would portray it. To maintain a civil society, we must adhere to the rule of law and due process otherwise anarchy would rein. This would not result in a productive society. Liberty such as this would also mean the elimination of time and space management instilled by industrial production process and Charles Taylor. This was necessary in the industrial society, but it is a dead idea in the twenty-first-century information society. We can no longer manage based on
time and space, for they have no meaning. When you pick up a cell phone today and call someone on the other side of the planet tomorrow, then you know that something has changed. This is the final point: production processes have become decentralized. This is made possible by globalization.


With the decentralization of production processes, the nature of such an arrangement makes it impossible to manage people based on time and space. They must now be managed based on performance or outcomes. This also means that people must be held accountable for the outcome and their actions. Responsibility is the new word for this century. If society truly had an Age of Enlightenment, an Age of Reason, then now is the Age of Responsibility. While it seems few want to take responsibility for their actions, it must happen if twenty-first century America is to remain competitive in the world. Making this type of transformation in our style of living also has other advantages. This transformation of work literally makes it possible to produce twenty-four hours a day. This is what I term hyperproductivity, and this condition will take America into a new
age. Why is his necessary?

Read Inert America to find out why.

 

Gary W. Griffin, Ph.D.

Friday, January 21, 2011

NYT: Plans being drawn up to let states go bust - Business - The New York Times - msnbc.com

This is a must read article.  It is very sobering for anyone who thought working for a State government for 30 or so years would provide them with a cushy retirement and a pension that they could live on for the rest of their lives. 

As one commenter stated, “ So, let me see if I have the straight... I work all my life for the State because I was always taught there is safety and a guarantee when working for the local govt. I forwent all the money I could have been making in the private sector because I believed in my working for retirement. Now I am being informed that I am being furloughed 4 days a month without pay and my pension is non existent? Have I got it right or is this just a very bad dream?”

Yes, this person has it right.  It is a bad dream that is about to turn into a nightmare. As stated in the article, “Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”  Once pensions are cut, what will a person do who is 60 years old and has worked in state government all their lives?

Baby boomers had better wake up and “smell the coffee” as it were.  “ Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care”.

“Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout.”

“Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.”

We haven’t heard the last of this problem.  As more baby boomers start to retire and want not only their pensions but other entitlements as well, where will States get the money? 

Read Inert America to better understand how this situation is likely to be our downfall if we don’t act now.

Gary W. Griffin, Ph.D.

NYT: Plans being drawn up to let states go bust - Business - The New York Times - msnbc.com

Wednesday, January 19, 2011

Inert America Book Trailer Released

 

 

Powerlessness in the most powerful nation on planet Earth is the state of affairs in America today. America is approaching a grinding halt and everything is slowing down. “All stop,” has been the command of the ship’s captain. We’re sitting at a four-way stop, and even if we haven’t come to a full stop the car is slowing down, and the brakes are being applied. “These are uncertain times,” said President George W. Bush in a press conference in early 2008.

 

My response is these are not uncertain times—we can be very certain that to continue on the same course is not the right answer. America has to move forward instead of taking a left or a right at this crossroads in its history. There are no easy answers, but there are answers, or at the very least, clear indicators of the right direction for  America in the twenty-first century. That direction is straight ahead. America must move forward, but it currently lacks the power to do so.

Through both quantitative and qualitative means, I provide readers of this book with simple and straightforward answers to the complexities that have become a twenty-first century America as we explore the Inert America condition.

Thursday, December 16, 2010

Deal: State government workforce too big | ajc.com

Two interesting articles this morning on the Atlanta Journal Constitution website that highlight the crisis of political economy in America. The first talked about how Governor Deal will cut government workforce.

“The state's high personnel costs are a key obstacle in meeting budget obligations, Deal said.”

"We're going to have to downsize in that department as well and that's tough, because sometimes there are people who are doing very good jobs," he said. "But because of the change in circumstances, we may not be able to justify those in the public sector any longer."

It also mentioned that the Unemployment Trust Fund is in arrears to the tune of 454 million. The other article talked about a jump in unemployment in GA to 10.1%.  

“There were 252,200 long-term unemployed in November — those who have been out of work for at least 27 weeks, the labor department said. This represents an increase of 4.8 percent from October and 59.8 percent from November 2009. The long-term unemployed now account for 53.7 percent of the 469,702 jobless workers in Georgia.  Also, 67,714 laid-off workers filed initial claims for unemployment insurance benefits in November — an increase of 17.8 percent from October.”

Oddly, it would seem that laying off more people by reducing government personnel would only add to this problem – it certainly doesn’t address it.

What shall we do?  Start by reading Inert America: Crossroads to the Future.

 

Gary W. Griffin, Ph.D.

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Deal: State government workforce too big  | ajc.com