Our politicians just “don’t get it”. For the first time in memory, the Congressional Budget Office projects that Social Security income this year will not meet obligatory pay-outs. The shortfall will most likely be filled from discretionary funding. To be sure, this shortfall is the result of the poor state of the economy and the high unemployment. It is expected that with economic recovery the figures will balance, at least until 2016 when the first waves of the baby-boomer tsunami arrive. Then projections of insolvency in the following years will run into the trillions. This same tsunami will also overwhelm Medicare with even deeper insolvency projections. We all know that over the years Congress raided the “Social Security Trust Fund” to make the budget appear to balance or at least make shortfalls appear less drastic than they were. Social Security money was replaced in the trust fund with government IOUs that today are basically worthless. So how does Congress intend to address this looming entitlement disaster? Adding Massive new healthcare entitlements and reducing Medicare funding by 50% to pay for it does not seem to be the wisest choice. Now is the time to face reality. We are already late in addressing this entitlement issue. We must demand that Congress fulfill their constitutional fiscal responsibilities and start now to focus on how we are going to face the situation. We simply don’t have enough money to cover all the promises. We are already more than $12 Trillion in debt. Adding trillions more to an already unconscionable debt is definitely not the answer. It is improbable that we will be able to grow the economy sufficiently to pay for everything. Particularly with the anti-capitalist, government control oriented economic philosophy of the current Administration and Congress. That leaves only two REAL solutions: Raise taxes or curtail benefits. Curtailing benefits will be politically very difficult if not impossible. That leaves only raising taxes. There is no other way. Our current tax structure will never be able to generate the needed revenue. You could tax the rich out of existence and you wouldn’t be able to put a dent in such a massive requirement for funds. The Europeans do it by the Value Added Tax (VAT), basically a national sales tax that is levied at every step of production. But talk about a regressive tax? It reaches up to 22% in some countries and EVERYONE, rich and poor alike pays it. It is 19 ½ percent in Germany. Except for food, every time you buy an item in a German store you pay a 19% sales tax. It is included in the sticker price on the shelf, so it is invisible to the consumer. Value added means that at each stage of production the item is taxed. Take a piece of wooden furniture. The guy who cuts the wood and sells it to a lumber mill adds some percentage to the cost. The mill then sells it to the manufacturer who also pays a tax. The Manufacturer then sells the finished product to the retailer adding a certain percentage. The retailer puts it in his shop and adds 19%. This is the general idea, although the specifics may change some. Think about the company who builds cars and all of the parts it uses from its suppliers. Incidentally, items manufactured for export are, in many cases, exempt from the final tax which makes the producer more able to compete internationally. Folks this the direction in which the USA is headed. Politicians always take the most politically expedient, least painful way out. This is how you are going to pay for Obamacare, Medicare, Social Security and all the other government entitlements in the not too distant future.