A specific deficit problem – Social Security and Medicare

While we have an annual US deficit approaching $1 trillion on budgeted revenue around $3.4 trillion, nothing much is being done about it or our current debt of $22 trillion. A tangible subset of this problem includes Social Security and Medicare, which were reported yesterday by trustees to run out of money in the near future – Medicare by 2026 and Social Security by 2035.

A nonpartisan group called The Concord Coalition, who tracks and reports on our debt and deficit issues, offered the following statement.

“Today the trustees once again warn that Medicare and Social Security are not on sound financial ground,” said Robert L. Bixby, Concord’s executive director. “Sudden and substantial benefit cuts await beneficiaries in less than 20 years — well within the lifetimes of many current beneficiaries — if lawmakers fail to act. Any ‘political leader’ worthy of that title, including those out on the 2020 campaign trial, should make it a priority to find solutions that are both fiscally and generationally responsible.”

Bixby added: “The trustees’ warnings seem all the more alarming because the country is not in a position of current or projected fiscal strength. Delaying reforms, however, would simply exaggerate the generational inequities of reform. For example, the trustees say it would now take an immediate and permanent benefit cut of 17 percent to keep the Social Security trust fund solvent for 75 years. Waiting until 2035 to take action would increase that benefit cut to 23 percent.”

As a retired actuary, I have written before about a few ideas, not limited to the following:

– increase the Social Security taxable wage base to above $180,000 drawing more FICA taxes from employees and employers;

– reduce Medicare retirement age to 62 and use ACA funding for that group to shore up (it will help the risk pools of both groups);

– limit cost of living increases on Social Security benefits along with measured changes to select Medicare benefits;

– increase judiciously FICA taxes to shore up shortfalls (Medicare Part A is currently 1.45% and Social Security is 6.2% up to the taxable wage base of roughly $128,000). Medicare Part B premiums change annually.

Please encourage your legislators to act now on these issues. Bixby’s caution is a good one. As we age as a country, it will only add pressure. Also ask candidates what they propose. Do not let them off the hook with a non-answer. Deferring action has been the norm.

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The ice is going to break

The title is a crucial line from a movie called “The Dead Zone,” based on the Stephen King novel. I use this line as a metaphor for ignoring real problems. Let me explain the context. The movie stars Christopher Walkien as Johnny, who because of a car accident, could see the future after touching someone. But, if the future was less clear, a dead zone as he described it, he could alter the outcome.

A boy he was tutoring was supposed to practice ice hockey on a frozen pond with his demanding father as the team’s coach. But, when Johnny touched him, Johnny saw the ice breaking. His father said that was crazy, even though both men knew the father did a background check before hiring the tutor. Johnny slammed his cane on a chess board and said “the ice is going to break!” The son stayed home, but the father went ahead with practice and four kids drowned as the ice broke.

So, Mr. President, members of Congress and various state legislators, let me state obvious problems with this metaphor in mind.

– We have a global water crisis including in the US with the World Economic Forum identifying it as a top long term risk. Farmers are having to fight harder to protect their diminishing water rights. It will be made even worse by climate change.  And, the problem is exacerbated with the significant water loss in fracking and lead pipes tainting some of the dear water.

– That climate change thing is a problem in its own right. Our federal government and several state government need to pitch in more and help. The President backing out of the Paris Climate Change Accord is as poor a decision as could have been made, especially when it came the day after ExxonMobil shareholders voted to order management to inform them on what they are doing about climate change.

– I learned today our EPA is turning a blind eye to asbestos. Since Brazil stopped production of this toxic product, we now are importing asbestos from Russia. As a metaphor for this President, each bag of toxic asbestos imported from Russia has Donald Trump’s picture on it. A toxic material imported by a toxic man from another toxic man.

– Although, debt is not an environmental concern, our so-called leaders are ignoring this huge and growing problem. As interest cost grows to a greater part of our budget, it will hinder our ability to do other things. We must spend less and increase revenue both. The math will not otherwise work,

The ice is going to break. We must heed the warnings now. If we don’t, we may be the ones who drown.

Why are you ignoring climate change?

My home state of Florida is surrounded on three sides by sea water. And, Miami has been noted as the most at risk large city in the world to rising sea levels, with two climate scientists pessimistically saying Miami cannot be saved from its demise.

Yet, its two Senators are climate change deniers. The newest Senator, Rick Scott forbade his staff while Governor from using the terms climate change or global warming in print or speeches. Why the Voldemort approach to climate change is a good question?

Recently, the senior Senator Marco Rubio, noted his disapproval with the President’s emergency declaration. His argument is what would prevent President Kamala Harris from declaring an emergency to fight climate change? I agree with his disapproval, but not his example. There is no emergency at the border, so says Trump’s own administration. But, his own administration has written a report speaking of climate change as a significant problem. In fact, the Department of Defense says climate change is a threat to national security.

On “60 Minutes” this Sunday they reported on the progress of the climate change lawsuit against federal inaction by twenty kids. The attorney notes that their best data comes from the US government who has known for decades about fossil fuel worsening climate change. It should be noted the lawsuits against Exxon Mobil by their shareholders and three states uses a lot of Exxon’s own reports.

Congresswoman Alexandria Ocasio-Cortez is being vilified by Conservatives for  her Green New Deal. She has become their new pinata replacing Hillary and Nancy. While there a few bridge-too-far parts to the plan, it is something to discuss and build from. Let me ask who is crazier, someone who recgonizes the greatest threat to our planet along with the limited time to address it, or someone who is too scared to say Voldemort’s name?

As an Independent voter who left the GOP twelve years ago primarily due to its Voldemort stance on climate change, i applaud that someone is making a stand. People must ask all politicians about their position on climate change. If it is like that of the two Florida Senators, people need to avoid voting for them. This is that important.

US DOD is worried about climate change

Per a Politico article yesterday, the US Department of Defense is concerned about climate change, even if the President denies the risk. It should be noted this concern is not new. Per Politico:

“Flooding, drought and wildfires driven by climate change pose threats to two-thirds of the U.S. military’s installations, the Defense Department said in a new report required by Congress.

The authors of the report, which the Pentagon delivered to Congress on Thursday, note that it probably underestimates the full extent of risk to military facilities because it only looks at likely impacts over the next two decades. The UN’s Intergovernmental Panel on Climate Change has said the world needs to become carbon neutral by 2050 to prevent global temperatures from rising 1.5 degrees Celsius, which would lock in many of the most catastrophic effects of climate change.”

This DOD report is following previous cautions that climate change is a risk to national security. This echoes the recent US government report and that of the UN. Yet, the US has a President who denies the human influence on climate change, has called it a hoax, announced the US pullout of the Paris Climate Change Accord and has eased regulations to enable the fossil fuel industry.

The larger irony is this President is inventing a crisis at the border and may declare a national emergency, while fiddling away about climate change. I think I will listen to the DOD than this man.

Kudos to Scotland

Last weekend on PBS Newshour, a two-part series called “Scotland is betting on tidal energy” was presented. Per the series, Scotland “is nearly 70% powered by renewable sources already, with the goal of reaching 100% by 2020, 10 years ahead of schedule.” Let that quote sink in a little – by 2020. Their focus has been on offshore wind energy, but the true wave of the future is tidal energy.

A project in the Pentland Firth is called MeyGen which includes three tidal wave turbines each with three thirty foot blades, the apparatus weighing 150 tons. The turbines provide a very predictable amount of energy powering over 1,000 homes each. “As the tide ebbs and flows, the turbines spin between 7 and 15 times a minute generating power to a wind turbine.”

Tim Cornelius, the CEO of SIMEC Atlantis said the tidal turbines have been expensive at first and have required half the cost to be subsidized by the Scottish government. But, he said the costs are coming down and after one year the cost of production is 50% of the year before. The turbines also build off existing technology used in the oil and gas energy, with cranes, ships and equipment to position a new turbine.

Scotland has been the leading edge implementer of these tidal turbines and others are taking notice. Cornelius says SIMEC plans to deploy 250 additional tidal turbines in the next several years. Other coastal countries are taking notice and creating their own pilots. The US is behind others, but will be investing in a testing facility off the Oregon coast.

As discovered with solar and onshore and offshore wind energy, the production costs decline over time so as to be more on par with fossils fuel production costs. But, in my view, when all costs are factored in – maintenance, litigation, environmental degradation, transportation, water loss and health – renewables are far cheaper than fossil fuel. For example, maintaining coal ash is a cost that never goes away.

While good things are happening with renewables in the US, we can all learn from countries like Scotland. We have a few cities like Burlington, VT, Georgetown, TX and Greensburg, KS which are 100% renewable energy powered. And, while California is a solar power and Texas a wind power champion, we have far more ways to go.

So, kudos to Scotland!

 

Two Americans win Nobel Economics prize on Climate Change work

Per an article this morning in Reuters, “Americans William Nordhaus and Paul Romer, pioneers in adapting economic theory to take better account of environmental issues and technological progress, shared the 2018 Nobel Economics Prize on Monday.”

Romer, with New York University, and Nordhaus, with Yale, developed models on the economic impact of dealing with climate change. Reuters cited the Nobel Academy in Stockholm, “‘Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge.'”

This news is important as Americans still provide global leadership inspite of the dearth of leadership in the White House and EPA. America is moving forward on renewable energy, but our efforts are in spite of the absence and antagonistic actions of federal leadership. Arguably, more than any other issue, voters must ask their candidates where the stand on climate change actions and protecting the environment.

It is interesting that this came today as the headline article in The Charlotte Observer is “NC Leaders share concern about climate change.” These are 60 business, advocacy, former government and university leaders who have been brought together to speak to various problems. 45 of them responded to the question of climate change and, of the 45, only two naysayed climate change – one called it a hoax, while the other said it is real, but the jury is out on man’s influence. Think about that – 43 out of 45 define the problem and offer solutions.

Per these leaders, ideas include ceasing building on lands prone to flooding. NC has had two 500 year floods in two years, the same with Houston, Texas. Miami may be inescapably lost to continued flooding due to rising seas and porous limestone. The term we must understand as well is “sunny day flooding,” which happens more and more throughout the year.

These Nobel prize winners note we have to address the problem now while the costs are more manageable and can be sustained. The best teachers are the Dutch, as they have managed sea water encroachment for years. But, the impact also includes more and intense forest fires and the faster depletion of already dear water sources.

We have major problems occurring that Washington is not talking about and, in some cases, is making it worse. We must address climate change and invest more in  renewable energy, consider better coastal and flood plain building and consider a carbon tax. We must address fresh water loss that is hastened by climate change that is affecting farmers and other Americans. And, we must address pollution by companies and the growing mountain of plastic.

There are economic models that call to mind the old Fram oil filter commercial – you can pay me now or pay me later. Now, is far cheaper. Ask your politicians more questions and vote accordingly. If they do not admit there are problems, do not vote for them.

Atlantis will be a reality

Back in the early 1970s, an interesting and different song by Donovan called “Atlantis” hit the airwaves. It spoke of the destroyed world consumed by the sea. As sea level rises, the city of Miami will become a future Atlantis.

Earlier this week, on a PBS Newshour piece called “Will climate change turn Miami into a future Atlantis?”, Henry Briceno, a research scientist from Florida International University, used the phrase to define his city, “we are doomed.” Sadly, this is the second scientist I have heard define Miami’s future demise.

Hurricanes have caused Miami planners to build for strong winds. Yet, they have not paid enough attention to the encroaching seas. Miami is built on porous limestone, so sea water can more easily come in. Sunny day flooding has occurred more frequently and pumps and pipes attempt to take the water back out to the bay. It is even worse during the spring and fall when the moon’s impact on tides is stronger.

Miami’s Dade County and three adjacent counties are investing $200 million to recycle the water back to the bay. Yet, It is not enough and maybe too late. New Orleans is taking advice from Denmark on their water management lessons, but Miami’s limestone is a huge problem. Plus, the sea water will find its way into the Biscayne aquifer which will cause drinking water issues.

This is no longer a future issue. Sunny day flooding causes the streets of Miami Beach to be several inches deep in sea water quite often. Other coastal cities are seeing more sunny day flooding, as well.

Future models show an alarming picture for Miami and the Everglades. Sadly, too many are turning a blind’s eye. In the sequel to “An Inconvenient Truth,” Al Gore and the Miami Beach mayor were standing in flooded streets, while the governor would not take their calls after asking staff to never use the term climate change. You would think the governor of a state surrounded on three sides by water would be concerned about climate change.

Donovan’s song may need to be re-released. Or, maybe the words can be updated for new coastal cities like Miami.