The Real Meaning of Entitlement

Several articles have appeared recently on the deficit and the nation's "entitlement programs." This phrase, "entitlement", is, of course, untrue. The entire program was created as a combination safety net and insurance plan; citizens were required to give the government money with the expectation they would get it back. Now there are ominous murmurings; perhaps the government will have to break another promise, this time to people who vote.

 

Numbers from the Congressional Budget Office show that in the past 10 years, 70 percent of real spending increases have gone to Social Security and Medicare. In fiscal 2017, the federal government spent $4 trillion. Of that, 40 percent — $1.5 trillion, or 8 percent of our gross domestic product — went to Social Security and Medicare. These two programs will consume $3 trillion in the next decade, and that doesn't include the interest charged on credit. (de Rugy)

 

In an article for National Review titled "The Entitlement Crisis Ignored," the Manhattan Institute's Brian Riedl reports that within three decades, the Social Security and Medicare systems will run a cash deficit of $82 trillion — including interest.

de Rugy writes that Riedl emailed her: "The rest of the federal budget roughly balances over 30 years." He added: "In other words, the entire long-term deficit comes from these two programs' shortfalls. The national debt would reach 150 percent of GDP" at the current rate.

de Rugy goes on: 'We have known for a long time that these programs are unstainable. Yet no one elected to office seems to have the political courage the state the obvious — that these programs are insolvent and in need of reform.

As Riedl wrote to me [de Rugy], "popular solutions will not work. Doubling the 35 percent and 37 percent tax rates to 70 percent and 74 percent would close just (one-fifth) of the long-term Social Security and Medicare shortfall. Cutting defense to European levels would close just (one-seventh) of it. Nor can economic growth or inflation fix the gap."'

"Popular solutions will not work." So an unpopular solution will have to be turned to. Which is.....?