OLEAN -- Despite President George W. Bush's blithe assertions in his State of the Union address last week that all is well with the economy, it's getting harder and harder to keep up with the myriad ways in which all isn't well with our national financial outlook.
Virginia Democratic Sen. James Webb, in his strong dissenting TV response to the speech, early on struck the same theme carried in this space last week when he noted Wall Street-driven corporate greed, profit-worshipping job exportation in the name of "globalization" and free trade, and outrageously enormous CEO salaries are actually dissolving the middle class and nudging anyone who isn't already rich toward looming poverty.
One howling fiscal monster on the near horizon creeps closer under the murky governmental designation of "Entitlements."
Don't turn to the sports page. This subject may sound boring, but it could bring down this nation faster than lurking terrorists ever could.
In federal terms, "entitlements" are mandatory, yet unfunded and underfunded, financial obligations, the money for which American taxpayers and wage-earners eventually must come up with to sustain national programs that are virtually chiseled in stone and cannot be eliminated without vast damage to our society and culture.
To better understand this syndrome, think of your credit card bills -- debts you have to pay off, but cannot do, or even diminish, without vastly changing your spending habits or engaging in chronic heavy borrowing. (This latter has been the traditional federal solution, as well as mine.)
The two biggest gaping maws of consumption of such funds, of course, are Social Security and Medicare -- the unfunded obligations to which currently exceed about $39 trillion, give or take a few hundred billion dollars here or there.
Here's the headline: Unless Congress and the White House take some quick, painful steps, federal entitlements -- mandatory spending and the interest due -- will totally consume all yearly federal revenues by 2020. That's just 13 years away.
You make $40,000 a year and have a 5-year-old child? Tell the kid in the kindest way possible over a bowl of Cheerios that he or she won't be going to college. There's no way in hell federal student loan programs will survive in such an atmosphere.
Even today, right now, these mandatory entitlements consume about 70 percent of all annual federal revenue.
My sources for these alarming figures are the Congressional Budget Office, which keeps close track of such things, and The Concord Coalition -- a group of fiscally responsible former senators and Cabinet members who, even though no longer in office, a few years back decided to start whacking us over the head with these stark predictions until we did something about it.
They include former and much-respected Sens. Warren B. Rudman, Sam Nunn and Robert Kerrey (not the one who ran for president), and such foresighted Executive Branch luminaries as Paul Volcker (former Federal Reserve Board chairman), Robert Rubin (former Treasury secretary) and Peter Peterson (former Commerce secretary).
These men all know what they are talking about. They have been traveling the nation on what they call a "Fiscal Wake-Up Tour."
According to The Concord Coalition, the most potential for tearing the nation apart rests in an almost certain situation of "generational conflict" if this shortfall keeps going. It would set members of one segment of the population against their parents in rage driven by nostalgia and envy for a good life that once was and could have been, but went up in smoke kindled by stupidity, greed and short-sighted blundering.
The Concord Coalition maintains "the direction of current fiscal policy is dangerous" and if continued will "weaken our long-term economic strength" to a point at which children of today's Baby Boomers will face several "terrible choices," among them:
The retired senators and Cabinet members aren't the only ones hollering about the danger of ignoring unfunded entitlements. Twelve days ago (Jan. 18) the generally respected rookie chairman of the Federal Reserve -- Ben S. Bernanke -- warned that recent positive trends in the economy (some of them bragged about by Bush in his speech) constitute a "calm before the storm."
Testifying at a Senate Budget Committee hearing, Bernanke said, "The longer we wait, the more severe, the more draconian, the more difficult the adjustment is going to be."
When the new Fed chairman was asked for a timetable in tackling the growth of spending in Social Security and Medicare, he echoed his predecessor, Alan Greenspan: "I think the right time to start is about 10 years ago."
Update on Horse Slaughter
A topic much-dwelled upon in this column last year -- to the point that some letter-writers to the Niagara Falls Reporter demanded I write about something else -- is back in the news recently, with controversial developments that please most pro-horse advocates.
The entire topic of killing horses in the United States and selling the meat for human consumption overseas seems headed for the Supreme Court.
A three-judge panel of the 5th U.S. Circuit Court of Appeals, seated in New Orleans, ruled in mid-January that Texas slaughter plants in Fort Worth and Kaufman were acting in violation of a 58-year-old state law and must cease.
The foreign-owned killing plants -- Beltex in Fort Worth, and Dallas Crown in smaller Kaufman -- regularly ignored the longstanding law until district attorneys from their home counties started moving the issue through the Texas court system last year. Along with another such plant in DeKalb, Ill., the horse butchers killed about 95,000 animals in 2006 and shipped most of the meat to Japan, France and Belgium -- countries where horseflesh is considered a delicacy and where it was sold in butcher shops and restaurants for prices reaching $39 a pound. (The kill plants acquired the horses for an average of 40 cents a pound.) Between them, the two Texas plants had sales of about $44 million last year.
Last Thursday, just a week after the federal Circuit Court of Appeals panel ruled, two airlines -- American and Delta -- threw another monkey wrench at the horse-killing business by refusing to ship the horsemeat from Texas overseas because such commerce appeared to be illegal. In the air carriers' carefully crafted wording, the refusal to fly the horse flesh was termed "suspended shipment of this cargo." (The plant in Illinois continued operating.)
The Texas killing plants did two things:
Stenholm told the Dallas Morning News "a lot of folks on the other side have managed to stir up a lot of questions" and that American Airlines was influenced by "calls flooding into their office, that it was illegal to ship. That's inaccurate information."
American Airlines spokesman Tim Wagner told Jim Getz of the Dallas Morning News that the pro-horse phone calls didn't have anything to do with his airline's decision: "We have to make our decision based on our understanding of the court case."
Stenholm brushed off the upholding of the Texas law prohibiting slaughter of horses for human consumption: "It's just a matter of hours before things are back to normal. We've had a little disruption, but it's back to business as usual."
Last fall, the U.S. House of Representatives passed a bill banning slaughter of horses for human eating by a wide margin, but now-retired Tennessee Sen. Bill Frist, the Senate's Republican majority leader at the time, held up a vote in that chamber by slow-walking the bill through the process and employing the ridiculous excuse that an obscure House clerk had sent over the wrong version. (That almost never happens.) The bill has to start all over again, and opposition to it has been marshaled by big-money lobbyists.
Insiders from both the horse-killing industry and the humane groups are predicting neither judicial review nor legislation will do much to stop the slaughter anyway, because the kill plants in question will just move to Mexico.
| Niagara Falls Reporter | www.niagarafallsreporter.com | January 30 2007 |