I Almost Hope the Mayans are Right

Everyone knows the Mayan Calendar ends in 2012. With the looming failures of so many Government Programs 2012 might be the right time to "Cash Out"

Today I passed along an email about the failures of the Government run programs, so I decided to do a little research.

Medicare/Medicaid: The Trustees report that Medicare’s Hospital Insurance (HI) Trust Fund will become insolvent earlier in 2019 than reported last year. HI expenditure growth is estimated to average 7.4 percent each year over the next 10 years, a higher rate than either Gross Domestic Product (GDP) or Consumer Price Index (CPI) growth. This year the HI Trust Fund will spend more than its income, and from 2009 through 2017, about $342 billion will need to be transferred from the Federal treasury to cover beneficiaries’ hospital insurance costs.Looks like we will be facing another big Tax hike to cover that shortfall. For the full article go to http://www.hhs.gov/news/press/2008pres/03/20080325a.html

I couldn't find many references about the solvency of Medicaid (partly because Medicaid is funded 50/50 by the states and the fed). Since I live in Michigan which has a huge budget deficit, I am betting Medicaid is completely insolvent here.

Social Security: Under the long-range intermediate assumptions, annual cost will begin to exceed tax income in 2016 for the combined OASDI Trust Funds. The combined funds are then projected to become exhausted and thus unable to pay scheduled benefits in full on a timely basis in 2037. The separate DI Trust Fund, however, is projected to become exhausted in 2020. This statement was taken from THE 2009 ANNUAL REPORT OF THE BOARD OF
TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS, a copy of which can be downloaded here: http://www.socialsecurity.gov/OACT/TR/2009/tr09.pdf Looks like we will be facing another big Tax hike to cover that shortfall.

The U.S. Postal Service: The Government Accountability Office is expected to add it to its list of "high risk" government operations. The GAO publishes a biennial list of high risk agencies, which they define as having "significant management challenges." It put out a list in January but is apparently updating it with the addition of the USPS in an effort to spur Congress to do something substantial to help keep it solvent. The GAO currently has a list of 30 high risk federal programs, policies and operations it says are "vulnerable to waste, fraud, abuse and mismanagement or in need of sweeping transformation.". USPS has been suffering financially for a while now, losing $2.8 billion in 2008 thanks to competition from FedEx and UPS and the fact that fewer people are sending mail. Anyone besides me wondering what the other 29 are? For the full article go to http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Post-Office-to-get-hit-with-high-risk-rating-as-business-keeps-falling-51872987.html Another big Tax hike to keep the mail coming?

Fannie Mae/Freddie Mac: Both are bankrupt. The U.S. taxpayer now stands behind about $5 trillion of GSE debt. This step was taken because a default by either of the two firms, which have been battered by the downturn in housing and credit markets, could have caused severe disruptions in global financial markets, made home mortgages more difficult and expensive to obtain, and had negative repercussions throughout the economy. In other words the taxpayers are on the hook for deadbeat mortgage payers "to save the economy" The complete report is available here: http://fpc.state.gov/documents/organization/110097.pdf Another big Tax hike to pay off the Trillion (if only 20% of the loans are bad) for Fannie Freddie

The Public Education System: While run mostly by local governments it would be hard to call the educational results of the K-12 system even average (more like below average). Going beyond the educational results to the Financial results and it would have to be called a disaster. Of course I live in the Detroit area of Michigan, where the DPS had such poor financial controls that a 500 Million dollar bond issue "disappeared". The decision (to have the state take over the finances of the Detroit public schools)follows months of controversy over the district's finances, with administrators going from declaring a fund surplus to saying the school system faces a $408 million deficit, forcing the board to approve hundreds of layoffs and other cuts. Vendors also came forward to say they weren't being paid, and the district had to rely on the state to advance funds so the school system could meet its payroll. For the full story : http://www.districtadministration.com/newssummary.aspx?news=yes&postid=51483 Another big Tax hike to keep the schools open?

Cash for Clunkers: I thought this was a great idea before I realized 30 employees were being hired by the new agency that NHTSA has created, the Office of the Car Allowance Rebate System. Another 200 “contractors” will also be hired to whom most of the work will be farmed out. Anyone want to guess what happens to the 30 people and the new agency once the clunker forms have been processed. The Government almost never eliminates agencies. You mean to tell me with all the bureaucrats in Washington, they couldn't find enough time to oversee some contractors processing a bunch of rebate forms?

God help us if we let the Government take over the entire Health Care System. Who could possibly predict the tax hike to do that?

As I said in the beginning, with all the tax hikes coming down the pike, 2012 might be be just the right time for our world to end!

Of course that's just my opinion