Entitlements: While we’re on the subject

Friday, March 15, 2013

To the Editor:

I was reading lately about the problem with entitlements increasing our national debt. I read on looking for a smoking gun but imagine how shocked I was when I read that some people consider both Medicare and Social Security to just be another bunch of entitlement programs. “Sen. Earmark,” a famous budget cutter, was also quoted as saying that both of these programs needed a “conversation” with the American people to discuss reducing benefits or eliminating them all together. I did a quick back-of-the-envelope calculation and realized that I had been contributing, albeit involuntarily, several thousand dollars a year to these insurance programs for nearly 50 years. I then checked the national debt, which was about $16 trillion and found that China, our most feared creditor, only held $1.5 trillion of that debt. My Social Security “entitlement” program currently held more like $ 2.6 trillion of assets above what’s been paid out, all of it invested in the United States of America using special treasury bonds. No one even talks about how much has been borrowed from the Medicare HI (hospital) Trust Fund, but apparently it will be solvent until 2024.

Boy, was I confused. I thought my Social Security and Medicare contributions were going into savings accounts, but soon found out that they were being used as loan programs for a single client, the U.S. taxpayer.

What was also perplexing to me as a novice, albeit involuntary, loan officer was why the Trust Fund was being used to pay for projects such as the Bridge-to-Nowhere; not to mention much of the defense budget. Evidently, we now spend as much on defense as the rest of the industrialized world, enemies and allies combined.

At first, I was enraged by such shoddy treatment of the millions of Americans paying payroll taxes but then I thought, “Wait a minute that makes perfect sense, as a debtor I can make the same offer to my creditors. Sort of pass it forward but not in good way.”

I immediately called my banker, “Mr. Poppins,” to see if we could get together, “Well Mike, it’s good to see you, what can I do for you today,” said Poppins, “a new savings account for the working kids or a home improvement loan? ”

“Well actually Mr. P. I want to have a conversation about your mortgage entitlement program.” I said it with just a dash of congressional hypocrisy to try to stun him. “My what?” he shot back, definitely stunned or thinking I’d been watching too many info-mercials.

“The mortgage entitlement on my house, of course, I feel I have been paying long enough and its time for all of us to give up a little something.”

“But we own your house. We bought it for you, remember?” Poppins was definitely reeling. “ Mike you also managed to quadruple the principle with home improvements like the combination marina and swimming pool.”

“Yes, I know, and don’t think we don’t appreciate it particularly when the kids jet ski to the diving board. The fact is times are tough so we can’t keep up the same entitlement mortgage payment forever. How about half?”

“That’s outrageous,” says Poppins. “What ever gave you such an idea?”

“I’m having the same conversation with Congress and a lot of them think it’s totally reasonable to reduce my Social Security benefits even though I have been paying in all these years. So I’m reducing your benefits as the mortgage lender on my house.

Exasperated Poppins finally said, “Let’s see what refinancing I can offer you.”

“I think the word ‘offer’ is not in the spirit of this conversation.” I said quickly.

“OK. OK. Well, let’s see. You are currently paying 4.99 percent for 30 years. How about 4.5 percent with 1 point and closing costs?” Poppins was talking like his self again.

“Mr. Poppins …”, I said dragging his name out and giving him the best Stephen Colbert eyebrow body language I could muster. I was definitely getting good at this conversation stuff.

“Never mind, how about 4.59 percent straight up, no closing costs or points?”

“No phony baloney application fees either.” I shot back.

“OK, it a deal.” says Poppins, but you have to keep up your new monthly mortgage payments. No more conversations.”

“OK I’ll take it, I said. Well it’s a good start anyway.” I didn’t want Poppins thinking I didn’t know they were paying next to nothing for their loan money.

I was nearly out the door when Poppins yells out, “Wait a minute, Mike, what do you want the extra money for anyway?”

“New Corvettes are on sale at the Chevy dealer and they are financing them at 0 percent for 5 years. It’s almost like burning money not to buy one.”

Michael A. Sills

Bedford