About Me

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Los Angeles, California, United States
The blog 'Breaking Bread' is for a civil general discussion, like you might have at the dinner table with guests. The posts 'Economics Without the B.S.' are intended for a general audience that wouldn't have to know the difference between a Phillips Curve, a Laffer Curve, or a Cole Hamels Curve. Vic Volpe was formally educated at Penn State and the University of Scranton, with major studies in History, Economics and Finance, and Business; and, is self-educated since by way of books and on-line university courses. His practical education came from fifty years of work experience in the blue-collar trades as well as a white-collar professional career -- a white-collar professional career in production and R&D. In his professional career and as a long-haul trucker, he has traveled throughout the lower forty-eight. From his professional career alone he has visited many manufacturing plants in the United States, Europe and China. He has lived in major metropolitan areas and very small towns in various parts of the United States. He served three years with the U.S. Army as an enlisted man, much of that time in Germany.

Wednesday, January 29, 2014

State of the Union speech topic 2014

What issue should President Obama being addressing for his State of the Union Speech in 2014?



This question was asked on the web site for the PBS NewsHour.  I posted this cartoon.




The PBS NewsHour then asked me and others who made comments to post a video for possible use on the NewsHour.  The video was not used on the NewsHour program; but, it was posted on their web site for viewers comments.




Wednesday, January 15, 2014

Killing Social Security

Economics Without The B.S.**: Killing Social Security

[**  Double entendre intended.]


Will Right Wing Tactics Kill Social Security?

            Social Security, the safety net for seniors established during the New Deal, is in a vulnerable position right now.  It has been under-funded since the 1990’s.  While there has been plenty of money in the Social Security Account to pay for present obligations – right now a surplus of approximately $2.7 Trillion – this surplus needs to grow a lot more to meet the needs of the generation of Baby Boomers that are starting to retire now with even more retiring in the next decades.
            President Clinton established a commission to study the funding that was needed.  The Commission made recommendations.  Nothing was done.  President Bush (W) established a commission to study the problem.  The recommendation was to privatize Social Security.  Right after the start of Bush’s second term (January 2005), President Bush went on a campaign visiting several states to sell his idea of privatizing Social Security.  His effort was so unsuccessful that by April he gave up.  And once again, nothing was done to fund Social Security.  President Obama has done nothing to shore up funding Social Security for future obligations; and, worst yet, barely brings the subject up.
            Social Security makes an interesting political football for both political parties.  Republicans have criticized Social Security right from its start in the 1930’s.  Their tactics have been to scare people that Social Security will not be there when they retire.  They have been doing this for decades.  They usually talk about an “unfunded liability” – the figure varies today, $126 Trillion if you lump Social Security with MediCare and every other government program, or $23 Trillion for just Social Security alone if you run the program out forever, or $10 Trillion if you run it out over the next 75 years.  What is an “unfunded liability”?  Well, when you had your kids you probably took on an unfunded liability – to pay for their future medical costs, clothing (for girls), food (for boys), education, etc., etc.  But you paid for these things.  You paid as you go.  Social Security is paid the same way – a pay-as-you-go system.  To meet the unfunded liability of Social Security will require only a couple of percentage points of future payrolls – the future payrolls will grow with a growing economy and growing wages in that economy.  Now Democrats play the scare game as well as the Republicans.  They like to use the Republicans as whipping boys to hold up against working folks when the funding of Social Security is shown in a shortfall.
            Right now there is political gridlock in Washington.  Nothing is getting done.  We had a Great Recession in 2008-2009.  Monetary action by Ben Bernanke’s Fed was the primary fix while the fiscal action from the President and Congress was inadequate and hampered because of the gridlock.  Could this gridlock be by design for those Libertarians and Right Wing adherents who want to downsize the Federal Government?  They have been echoing this posture for many decades but have never won enough elections to have control of Congress and the Presidency.  But there are enough of them in Congress to prevent Government action at the Federal level.  So, is this inaction at the Federal level just a consequence of the split between Red States and Blue States; or, is it by design, a strategy?
            This past weekend Nicholas Confessore had an article in the January 11, 2014 New York Times which addresses this strategy from a different perspective at the state and local level.
Although it is a different perspective the results can feed into the aims of the Right Wing and Libertarians like the Koch Brothers (David and Charles): make the Federal Government ineffective and get your programs through at the state and local level.

So, what is the future for Social Security if gridlock and inaction at the Federal level are the rule for the day?