Act One, Scene One

The Post Office defaults on nearly eleven billion dollars in benefit payments for 'future retirees.'  That's not a state or a city; that's the US Federal Government.

So, what does that mean for the 'future retiree,' i.e., the current worker?  Does he or she have those retirement benefits or not?  Not, I would think, at least not to the same degree.

The Post Office is the least important of services, and so merely the first to arrive at where all are heading.  Soon it will be veterans' benefits and pensions, or the benefits and pensions of other federal agencies; then it will be Medicaid, or Medicare.  The question in front of us is mostly, I think, "How soon can we accept that this is the end of everything we've believed in and fought for, and start thinking about what comes after?"

We've come to the denial stage in our grief over the death of America.  Can it still be saved?  So much, we want to believe that it can be.  We've given so much.  I once watched rockets come in over Camp Victory, and saw them burst under the Phalanx guns.  'The rockets' red glare; the bombs bursting in air!' I thought at the time.  'Now I've seen it:  now I understand.'

Maybe half of one percent of us saw something like that in Iraq or Afghanistan.  I am speaking to Cassandra's point -- second link, above.  What matters most to what most people believe is where their interests are vested.  There are too many vested interests against reform on the scale necessary for America to survive.

10 comments:

Texan99 said...

Some day we'll realize that democracies can't be trusted to implement defined-benefits pension plans. If employers must take on the responsibility of retirement planning at all, which I think is a particularly horrible idea, then they should stick to defined-benefit plans, and the money should be held by reputable third parties, in as safe and diversified a manner as possible. Better still if the employees set up their own retirement funds, which are privately held and therefore that much more difficult to confiscate.

Too many retirement plans are turning out to be Ponzi schemes. It's going to be a horrible time to come.

Grim said...

I've said a lot of what I have to say at Cass' place, but this kind of thing drives me to despair. We're talking about eleven billion dollars. Now, we're already borrowing half of what we spend, so in a sense we don't have it. But in another sense, we could borrow it if the government decided to borrow it.

It's the same thing with this sequestration issue. It all comes down to Congress finding it too hard -- for years! -- to pass a simple budget.

The great hope is that we'll get some kind of single-party government out of this election, but even then I don't see how the either kind of government produces meaningful reform on the big rocks of Medicare, Medicaid, or retirement pension and health care issues. Certainly nobody is running on fixing those problems, which suggests that building political capital to do so is not something either party is trying to do. It's easy to see why: there are such powerful vested interests involved that you'd cost yourself the election if you even talked about trying to do something about it. And those interests are permanent interests; they're not going to change with a few years' passing, except to harden.

Like I said at Cass' place, I don't see how we get anywhere with this process except to the place where the healthy states try to find a way out. (States like California, will want to keep them in -- like vampires, wanting to drain a little more health and wealth and blood rather than admitting that they are dead.)

I suppose an alternative would be to expel the bad-actor states. There's precedent for that in the Reconstruction period. The Civil War decided that you couldn't secede, but the Union could kick you out.

battleblue1 said...

The Post Office is the least important of services, and so merely the first to arrive at where all are heading.
True, but it is at least Constitutional. (Article 1, Section 8)

There are too many vested interests against reform on the scale necessary for America to survive.
Then, to quote Saving Private Ryan, "What the hell do we do now SIR"? I haven't heard anyone speak about that. Are we really willing to throw off our government? "Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed."
What are we to do then? Sit and watch Rome burn, or act as men and do the right thing, however hard it may be?
The colonies declared independence and went to war with the Crown over far less than we experience today in America. They had a different historical context than we do – the English civil war, which went well for the “rebels”, vs. our own civil war, which turned out to be the “war of almost succession”.
People talk about fundamental reform, but neither party will take any reverse-Obamacare-like action, by which I mean to say, to ramrod a dramatic reduction in the scope of the federal government (completely eliminate social security/medicare/medicade/TSA/Dept. of Education/HUD – pick just one for starters). Only sandy headed ostriches believe that any kind of reform like this is possible.

All the different alternatives seem to suck. Still trying to find one where there is light at the end.

battleblue1 said...

The great hope is that we'll get some kind of single-party government out of this election

A single party government will only streamline the rate of descent into the abyss. Better to have the two parties duking it out and congressional deadlock than smooth sailing for either.

Texan99 said...

I don't think you have to expel the bad states. You have only to decline to bail them out. When enough people leave, they'll figure out how to behave to encourage people to return. The great challenge is how not to let the failed policies drag down the successful ones. West Germany succeeded in incorporating East Germany back into its system, but not until East Germany relinquished communism. Can you imagine if West Germany had opened a vein to ameliorate the impact of communism in East Germany, out of pity?

A retirement plan that relies on borrowing to fund its obligations is not a retirement plan. It's a cynical, failed promise. It's a Ponzi scheme.

bthun said...

"You have only to decline to bail them out. When enough people leave, they'll figure out how to behave to encourage people to return."

Bullseye.

Grim said...

I think, Battleblue, that the right thing is to organize at the state level, because the states at least have a vested interest in not being broken by Federal mandates. Medicaid is killing the states, for example.

There are three options.

1) If enough state governments can be won over to the idea, you could compel a constitutional convention. However, three quarters of the states have to ratify any amendments coming out of such a convention, so it's a long shot for any sort of radical change. I used to think this was the way to go, but now I think that too much of the public (as well as nearly the entire political class) is committed to the things that are going to bring the country down.

2) Secession, or,

3) Dealing with bad-actor states. This is also a long-shot option, though, because if the healthy states remain in the Union they and their citizens also remain on the hook for all these unsustainable programs. So, if you can't reform Medicare (say), you're going to end up with a fiscal collapse even if you compel the other states to start acting right.

Europe goes first, because their political union is weaker and their economic union is weaker. But I think the breakup of the United States is largely inevitable. The form it takes, though, is not inevitable -- and if we can find a way to make it a peaceful transition, we could save untold lives and human misery.

Grim said...

I suppose there's a fourth option, which is even the most likely option: do nothing and ride out the collapse. The Federal government will default, as nations do from time to time, but it will remain capable of exerting enough force that it will continue to exist. The negative consequences to the healthy states will be severe, but perhaps not so severe as are imaginable from a war.

E Hines said...

True, but it is at least Constitutional. (Article 1, Section 8)

Not constitutionally mandated, though. The clause says that a post function will be provided, not that it must be a quasi-government protected monopoly.

[/digression]

Eric Hines

Grim said...

You have an off-switch for that tag? :)