Sorry about the shameless rip. But, the following is true with respect to Federal entitlements: they are a political and fiscal dirty litte secret. We’re talking about something like $80 trillion in liabilities between now and 2080 and there is no way to pay for them.
If you are a citizen of this country and/or you pay taxes, you need to read this.
Don’t just say “Oh God, there he goes again, yelling that the sky is falling.” This is a very, very real and very, very large problem that my generation will have to deal with within our lifetimes and could very well lead to the financial downfall of this country. Basically, it could lead to the total end of the party—not the political parties—but the (great, raging) party that is our country’s financial well-being.
I’m talking about Social Security—the conservative’s favorite target—only to a small extent. This is a small piece of the entitlements pie. Those entitlements are quite manageable. All that noise about Social Security is a great distraction when it comes to addressing the real fiscal abyss: Medicare and Medicaid.
Entitlements—like SSA, Medicare, and Medicaid—are called mandatory spending. Their outlays are required by law and each fiscal year the Federal government is required to find some way to write all those checks. There are interest expenses that a government in debt (like ours) has to pay, and then there’s discretionary spending, which is where all the earmarks and “pork-barrel” spending exists.
As it stands right now (FY 2007), entitlements are approximately 50% of the Federal budget. Interest on the debt is about 9% of the Federal budget, with the remainder of rhe budget as discretionary spending. Now, our population is getting older, and health care is getting more expensive, for reasons that I do not fully understand. Social Security itself is manageable, but Medicare and Medicaid spending will, at its current rate, consist of some 30% of our gross domestic product by 2080. That’s not 30% of the Federal budget. That’s thirty percent of all the money spent in the United States economy!
How much money are we talking about? The comptroller-general of the United States estimates that the Federal outlays between now and then will be about $70 trillion (that’s with a ‘t’) dollars. Even the most optimistic estimates of Federal government revenues indicate that massive deficits will be accrued unless we do something, and very, very soon, to reform these programs, control the cost of health care, and find new sources of Federal revenue.
How many candidates are talking about that?