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“My wife and I
are getting a little older, so naturally we are beginning to think about
where the cash flow will come from when we truly retire. We realize we won't
be able to live on Social Security benefits alone, and even though we have
paid into the system our entire lives in the hopes that come retirement age
we'll get something back, I'm not very optimistic about our prospects.
Reading the
financial press, I recently noticed that of the 139 million workers in the
Bureau of Labor Statistics household survey of workers, 47 percent don't make
enough to file and pay federal taxes beyond any collected social security
tax. This means that out of a population of 310 million Americans, only 74
million (about 24 percent) pay federal taxes on April 15th.
After doing
some more digging, I discovered that the number of people receiving free handouts
from Uncle Sam greatly exceeds the number of people giving to him. With so
many big government programs (Cash for Clunkers, the $8,000 tax credit, HUD
housing assistance, subsidized student loans and earned income credits, to
name just a few) millions of people have received federal treats and tax
deduction goodies to feast on at our expense. With five million more people
collecting unemployment and another six million living in their homes not
paying their mortgage on the verge of foreclosure, my wife and I and the
remaining 24 percent of taxpayers, will be footing the hefty bill for the
losses at Fannie Mae, Freddie Mac, and the FHA.
Besides the
big programs above, there are the truly massive and all encompassing
mind-boggling programs I haven't even mentioned. Take Food Stamps, for
example. About 40 million people collect them. Next up is Social Security.
America has more people on Social Security than most countries have people!
As of March 2010, the total number of beneficiaries, including SSI disability,
topped 58 million Americans. Medicare has 47 million people enrolled, and
Medicaid has 59 million. Meanwhile, Congress just passed a new health care
law designed to cover another 32 million Americans. And to top it off, 20
million children get subsidized school lunches. (The last time my wife and
I got a free lunch it was a sales pitch at an investment seminar!) All of
these programs are looking to Uncle Sam to pick up the tab.
Meanwhile,
I've likely overestimated the percentage of the population working. Federal
authorities who should know, but don't (because they don't really care
about protecting our borders) estimate that the illegal population ranges
from twelve to twenty million. When you examine all of the benefits and free
handouts available in our country, I'd be marching to stay in America, too,
and delighted to vote for the guy giving away the candy store to me!
Now, finally
back to my wife's retirement worries. I just checked the federal government's
finances. Tax revenues are at a 60-year record low as a percent of GDP, while
expenditures are at levels that previously we have only seen in a major world
war. Tax revenues only cover about half of the federal government's expenditures;
the rest has to be borrowed.
Our country
has been hitting up Uncle Sam for handouts and treating him like a rich uncle
with no heirs and a soft heart. But Uncle Sam is in the poor house and he's
passing the hat in foreign lands, like China, to fund our version of a
welfare state, in exchange for selling the few remaining American workers who
pay taxes into debt slavery.
If my wife
and I can get a government check we'll grab it while we can because I know
what could happen when the busted baby boomers start retiring in full force.
We will plan our lives as if we cannot depend on Social Security or Medicare
to see us through, because, of course, only a fool would think our finances
in the next ten years would be any better than the Greeks! When the time comes
and we finally have to ask where our government check is, I expect it won't
be in the mail!
Richard Benson
SfGroup.org
Richard Benson is the founder of The Specialty
Finance Group ("SFG") was founded in 1989 as a financial broker to
private finance companies, introducing them to major financial institutions
that would provide them with equity, subordinated debt, and senior credit
facilities using the Capital Market.
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