I have a longish article in the new issue of National Review looking at problems and solutions for Social Security, Medicare and Medicaid. It was a nice piece to write, in that it pushed me back from some of the micro-issues I focus on day to day and made me think more explicitly about how I view the programs' purposes, problems and how they should be structured for the future. Our long-term budget challenge can be summarized in one word: entitlements. Without Social Security, Medicare, and Medicaid, the budget would be roughly in balance over the coming decades. But with these programs, and without reform, a fiscal crisis is inevitable. To balance the budget over the next 25 years would require an immediate and permanent 30 percent increase in all federal taxes. That is the future we face, and it is a future of our own making. Entitlements traditionally have paid generous benefits--financed by affordable taxes--to rich and poor alike, because the ratio of workers to beneficiaries has been high. Those days are gone and will not return. Maintaining entitlements in their current form will require either crippling taxes or crippling debt. Alternatively, we can rethink the entitlement philosophy, focusing resources where they're needed most, empowering individuals to make choices and giving them incentives to reduce waste, and buttressing personal retirement savings. Click here to read the whole article.
Tuesday, March 9, 2010
“Entitlement Apocalypse” in National Review
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I'm a totally embarrassed, "I'm entitled" senior, who for far too long has ignored the other side of my brain, which is screaming "who's obligated" if you're entitled. Government's assault on middle class America began with the signing of social security reform legislation in 1983. This legislation took social security funding from a pay as you go taxing structure ($1 in - $1 out), to a pay in advance taxing scheme ($5 in - $4 out -save extra $ for now retiring 78 million boomers). Thanks to political pilfering, made possible by asleep at the switch seniors like me, politicians have used the SS taxing scheme to turn a 2.5 trillion dollar (that extra tax $ has grown) potential asset into a 2.5 trillion dollar liability, that will have to be paid again plus interest. Social security has turned into a weapon of monetary destruction (WMD), that financially water boards this and future generations. My 15 grand children are entitled to something better than an "I'm entitled" asleep at the wheel Grandpa, hiding behind the skirt of a Tokyo Rose PR campaign put forward by the AARP organization. Working middle class Americans are the horse we all ride to our prosperity, and treating them like rented mules, will result in a society that, well acts like rented mules, and will soon kick back! To this end, a soon to be launched "community based" solution to the issues surrounding social security will soon be introduced. You can get a sense of the issues, and our comprehensive proposal at: www.americaretoday.com
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