Why The Next President Doesn’t Really Matter*

…in terms of the economy.

Yes, the difference between Obama and McCain is simply staggering when we’re talking about their temperament, and their stances on foreign policy, the economy, healthcare, education, and so forth. But here’s the problem: what they do isn’t going to change a thing, or, at least, save us from the ruin (economically) that we’ll find ourselves in.

Yes, Obama does intend to put more costly government plans in place (which some have likened to socialism! The horror!) and McCain does intend to cut taxes a little bit, but that won’t do anything to stop the apocalyptic horror that’s looming on the horizon: the retiring of the baby boomers.

Since everyone’s focused on the world’s banking system collapsing, it’s been a nice diversion for the candidates, since they get to avoid a simple question that shouldn’t even been asked: what are you going to do about Social Security/Medicare/Medicaid? It’s simply staggering how the issue has become invisible on this campaign, considering how important this is going to be in the long run. In fact, I’d regard it as a world-changer – how the Social Security system handles all of the baby boomers retiring. If the government somehow conjures money out of thin air by borrowing from foreign banks, they may be able to stave off collapse for a little while more. But, as we’ve seen in our current financial downturn, borrowing is absolutely not the answer.

If we’re going to have any hope of reversing our course in this, we’re going to have to jack up taxes on everything in order to pay for Social Security alone, not to mention the national healthcare initiative and a growing defense budget as we near spreading our War on Terror to new frontiers, a la Pakistan and Iran. We’ve seen the national deficit rise $5 trillion under Bush with his tax plan – so what makes anyone think that we’re not going to face a much greater burden with a McCain, or even an Obama administration, since the tax revenues from taxing the upper crust more isn’t even going to bring in enough money to pay off all the debts we’re incurring now (that, coupled with tax cuts to the middle class will cancel it out). What makes anyone think we’ll be able to tackle the increased social security burden from the baby boomers?

As Thomas Sowell put it:

Politicians may decide to give Social Security pensions with one hand and take back part of it with the other hand in higher taxes. Or they could jack up the Social Security taxes on the working population. Or they may do some combination of these things.

What they will not do is tell you that Social Security was a lie from day one. Your taxes were never being put aside in some “trust fund” and there cannot be any “lock box” for these non-existent funds, for Congress has the power to spend every dime that reaches Washington — and can borrow more on top of that.

Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom.

But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth — or of more artful lies. Just like Enron.

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