In his column today, John Stossel points out the irony of "entitlement" programs:
That's the government's ironic term for programs that transfer money from people who earned it to people who didn't.
Entitlement? How can you be entitled to someone else's money?
Irony aside, entitlements are taking up a growing portion of the federal budget and, as Stossel points out, this comes with serious consequences:
Today's big problem with entitlements is that their growth will soon eat everything in the federal budget.Last month, the Congressional Budget Office (CBO) analyzed the growth of government spending and deficits for Rep. Paul Ryan (R.-Wis.), ranking member of the Budget Committee. The report estimated that spending on Medicare, Medicaid and Social Security, which in 2007 represented about 8 percent of GDP, would balloon to 14.5 percent in 2030 and 25.7 percent in 2082.
There is no way that can fly.
If you add in all other spending, including interest on the debt, federal spending under the CBO's scenario would eat up an astounding 75.4 percent of GDP in 2084.
If taxes don't keep pace, the CBO says the "additional spending will eventually cause future budget deficits to become unsustainable ..."
And if taxes were to keep pace? The CBO says, "[T]ax rates would have to more than double."
More here.
1 Comment
Chris | June 23, 2008, 1:13pm | #
John Stossel and Congressman Ryan are absolutely correct; we need to reform entitlements before it is too late.
Albert Einstein said that compounded interest is the most powerful tool in history. Unfortunately, our current system is on the losing end of this by letting our unfunded liabilities accrue into an unsustainable Social Security "Trust Fund." Instead, we should be using the power of compounded interest to invest in our own personal retirement accounts.
The word "entitlement" would be bad enough if it were only used in the connotation Stossel described it in (taking money from earner's and giving it to people that don't contribute to the system). Unfortunately, politicians use the term even more liberally. In the budget committee, "entitlements" are any part of the budget that will be allocated beyond the fiscal year.
The only way to stop government from borrowing from the Social Security "Trust Fund," and spending it on other programs is to create a system of personally owned and managed retirement accounts.