Skip to comments.The Slow-Motion Train Wreck of Entitlement Programs
Posted on 05/09/2014 8:23:36 AM PDT by SeekAndFind
The Census Bureau just released a report on Americas aging population.
The big takeaway is that our population will be getting much older between now and 2050.
And since Im a baby boomer, I very much like the fact that were expected to live longer.
But as a public finance economist, Im not nearly as happy.
As I explain in this interview with the Wall Street Journals Digital Network (and as confirmed by BIS, OECD, and IMF data), the United States is going to get deluged by a tsunami of entitlement spending.
I mentioned that its important to focus on the ratio of workers to retirees. This dependency ratio matters because economic output largely is a function of an economys working-age population.
To cite my famous cartoons, you need a sufficient number of people pulling the wagon to support those riding in the wagon.
Heres a chart from the Census report to help you understand the magnitude of the problem. As you can see, both in the United States and other nations, the increase in the dependency ratio is almost entirely the result of aging populations.
This is why I said that we face a slow-motion train wreck because of poorly designed entitlement programs.
But the good news is that there is time to reform those programs and avert a crisis.
Which explains why I probably sound like a broken record about the need for genuine entitlement reform.
(Excerpt) Read more at finance.townhall.com ...
Just wait till you see what those numbers do, Mr. Public Finance Economist.
The problem isn’t old people - it’s gang bangers collecting Social Security Disability starting in their late twenties... or almost the whole city of Detroit...
So what is America going to do? They are going to cut Social Security and Medicare and leave Medicaid, food stamps and welfare. And after finding out that cutting Social Security and Medicare is not enough, they will continue to cut Retired Military and Veteran’s. However, Medicaid, Food Stamps and Welfare will continue to flourish. What a country. Sorry but I don’t consider Social Security to be an entitlement. I know some here do but I don’t because we pay into the system (which I know pays the current retirees). Plus you can’t really cut 1400 dollars too much. It already is hardly enough.
We ought to adopt the Workfare system. In some European countries, if you are on welfare, unemployment comp, food stamps, etc., and can fog a mirror, you show up every day and work an 8 hour day for the State. It might be cleaning toilets, sweeping the street, or even some make-work program, but you do have to show up and work. My guess is that those people might figure, as long as I have to work anyway, I might as well get a better-paying job.
Also, the next time I hear some bozo in Washington tell me that he needs to increase the debt ceiling or he’s going to cut my SS benefits or military spending, I think the absolute FIRST cut is their salaries...zero pay until they balance the budget. After that, all of the able-bodied welfare recipients, and so on down the line, including the taring and feathering of the idiot who thought free cell phones was a good way to spend MY money. If that’s not a program purely to buy votes, what is?
People, we are so screwed...
We can't even adopt drug testing for welfare recipients.
Maybe not as slow-motion as folks like to think.
Those employers that offer health care are suddenly finding that their insurance costs are escalating sharply, enough so that they may discontinue the practice of providing health insurance altogether, and just pay the fines imposed, as it is much cheaper than continuing the benefit.
The bump-up and fumbling in various venues around the world in matters of diplomacy have us on the verge of choosing between engaging in a fruitless confrontation with a much more disciplined and determined adversary, or to beat a hasty and unseemly retreat in the face of a world full of bullies, more and more of whom have become emboldened.
The capricious and uneven application of law at the national level, and the ever more erratic interpretations of those laws by judges appointed by the Current Occupant, all serve to eat away at the foundations of law and order upon which our republic was based, turning the territory once known as “the United States of America” into a vast vigilante society, respecting only the crushing weight of unwanted attention on the non-compliant or the reluctant.
I miss George Bush. Hell, I miss Bill Clinton, who was at least an American, if a stunted and twisted caricature of patriotism.
Yeah, I know. I wonder why...?
And they’re going to import millions more of immigrants who will suck up yet more resources either in taking American jobs, or immediately hitching a ride on the great American gravy train, or in some cases, both.
Obozo is trying to force businesses to not be allowed to check for a felony in an applicant’s background. Because we need more foxes guarding the hen house, er, more avenues to “redistribute”.
We will bring back Prohibition and adopt Daylight Hoarding Time (set clocks forward twelve hours) before Congress ever seriously touches entitlement reform.
We’ll see a VAT on breathing before that happens.
“Plus you cant really cut 1400 dollars too much. It already is hardly enough.”
They are “inflating away” social security. The Consumer Price Index now excludes food & energy because they are considered to be “too volatile”. What a joke. Those two categories alone are eating up most household budgets.
Now the elderly may not drive too much, but they do need to eat. And energy costs are ‘baked’ into the price of everything else we buy.
Assuming the country can withstand the immediate costs for entitlements, what happens when the huge demographic bulge of the baby boomers die off?
A huge amount of that entitlement spending will simply disappear because of natural causes.
Granted the debt will remain, but the remaining population will have less to fund on the existing entitlement recipients.
Surely someone has run the numbers?
The global aging crisis.