Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

2009 Federal Revenue and Spending Book of Charts - Entitlements
Heritage Foundation ^

Posted on 05/13/2009 11:05:27 AM PDT by Conservative Coulter Fan

Entitlement Spending Will More Than Double by 2050

Entitlements, fueled by demographic changes and rising heath care costs, will cause federal spending to explode. Medicaid spending will more than double, increasing from 1.5 percent of GDP in 2005 to 3.1 percent in 2050. Medicare spending will more than triple, increasing from 2.7 percent of GDP in 2005 to 8.9 percent in 2050.

Entitlement Spending as a Percentage of GDP

Entitlement Spending as a Percentage of GDP

The Ratio of Workers to Social Security Beneficiaries Is Declining

As the baby boomers age, the nation's demographic makeup will change greatly. Currently, there are approximately 3.3 workers for every Social Security beneficiary, while in 1945 the ratio was approximately 42 workers per retiree. This declining ratio means that fewer and fewer workers will be left to support more and more beneficiaries.

Covered Workers per Social Security Beneficiary, Intermediate Scenario

Covered Workers per Social Security Beneficiary

Tax Rates Would Need to More Than Double If Entitlements Are Not Reformed

Under current law, the costs of Medicare, Medicaid, and Social Security will rise substantially. If this spending were funded solely through federal income tax increases, tax rates would more than double, even for the lowest tax bracket.

Increased Tax Rates Necessary to Pay for Entitlement Spending

Increased Tax Rates

Source: Congressional Budget Office.

Repealing Tax Cuts and Not Fixing AMT Won't Balance the Budget

If the 2001 and 2003 tax cuts expire and the AMT is not fixed, taxes will soon grow to unprecedented levels. Even this massive increase in federal revenue will not solve the spending imbalance driven by Medicare, Medicaid, and Social Security.

Federal Spending as a Percentage of GDP Under the Extended Baseline Scenario

Federal Spending as a Percentage of GDP

Source: Heritage Foundation calculations based on Congressional Budget Office data.

If Tax Revenue Is Held At Historical Levels, Total Spending Could Reach 67 Percent of GDP

Historically, tax revenues have hovered around 18.4 percent of GDP. If taxes are kept at these levels, spending from the three major entitlements, Social Security, Medicare, and Medicaid, will push spending levels to unsustainable heights, crowding out all other programs by 2052.

Federal Spending and Revenue as a Percentage of GDP

Federal spending

Source: Heritage Foundation calculations based on White House Office of Management and Budget

Entitlements Alone Will Eclipse Historical Tax Levels by 2052

Spending on the three major entitlements, Medicare, Medicaid, and Social Security, will more than double in the next 40 years. Without major reforms, entitlement spending will consume all federal tax revenues by 2052.

Three Major Entitlements and Tax Revenues as a Percentage of GDP

Three Major Entitlements

Source: Congressional Budget Office.

The Unfunded Liabilities of Entitlement Programs Dwarf Recent Bailout Spending

Recently, massive federal government spending on programs such as the Troubled Asset Relief Program (TARP), the 2009 economic stimulus bill, and the bailout of AIG has dazzled the nation with their enormous price tags. However, the cost of the unfunded obligations for Social Security and Medicare are more than 61 times the cost of TARP alone.

Total Unfunded Obligations for Medicare and Social Security vs. Bailout Spending

Total Unfunded Obligations



TOPICS: Crime/Corruption; Government; News/Current Events
KEYWORDS:

1 posted on 05/13/2009 11:05:29 AM PDT by Conservative Coulter Fan
[ Post Reply | Private Reply | View Replies]

To: Conservative Coulter Fan

Yep, maybe we can get Ross Perot out again to break out charts on the deficit. As much as people ride Perot, he did help pave the way for Budget deficit reduction.


2 posted on 05/13/2009 11:09:27 AM PDT by Always Right (Obama: more arrogant than Bill Clinton, more naive than Jimmy Carter, and more liberal than LBJ.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Conservative Coulter Fan

Obama's Budget Would Send Debt to Levels Not Seen Since World War II

In 2008, publicly held debt as a percentage of the economy (GDP) was 40.8 percent, nearly five points below the historical average. Under President Obama's budget, this figure would more than double to 82.4 percent by 2019, and interest payments alone on this debt would be $100 billion more than Obama projects to spend on the entire Department of Defense.

Debt Held by the Public as a Percentage of GDP

Debt Held by the Public as a Percentage of GDP
Source: White House Office of Management and Budget; Congressional Budget Office.

Obama's Budget Would Increase Debt by 26.3 Percent of GDP Compared to CBO Baseline

The non-partisan Congressional Budget Office projects that publicly held debt will reach 56.1 percent of GDP under current law. If President Obama's budget is implemented, CBO projects debt to reach 82.4 percent of GDP.

Debt Held by the Public as a Percentage of GDP

Debt Held by the Public as a Percentage of GDP
Source: Congressional Budget Office; White House Office of Management and Budget.

Federal Budget Deficits Will Reach Levels Never Seen Before in the U.S.

Under current law, the budget deficit is projected to grow to 24.5 percent of GDP by 2082, even if the 2001 and 2003 tax cuts are allowed to expire and the AMT is not fixed. This will be driven by entitlement spending for Social Security, Medicare, and Medicaid, with deficits well above the 30-year historical average of 2.5 percent. Deficits of this size have never been seen in the U.S. and illustrate the need to reform these programs.

Federal Budget Deficit as a Percentage of GDP

Federal Budget Deficit as a Percentage of GDP

3 posted on 05/13/2009 11:12:42 AM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Always Right

What budget deficit reduction? The only attaempt was the Republican Congress did balance the budget against the efforts of Bill Clinton (who later tried to steal credit), but those days are far gone...now we’re jumping from hundreds of billions to trillions in deficits every year.


4 posted on 05/13/2009 11:15:43 AM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Conservative Coulter Fan

How is it possible that we are not Bankrupt already?

We are witnessing a massive trainwreck and are absolutely powerless to stop it.

Powerless.

Conservatives can’t outspend and out promise liberals ...they simply aren’t stupid or irresponsible enough.

No business or country can survive with this much overhead. China understand it and will out produce us if they have not already and they are branching out. They plan to open car manufacturing in Bulgaria now.

There will be only ashes left after this year. Ms. Carrie Prejean was wrong last night on Hannity ...this WAS the greatest country on earth. It is now gasping for survival and the patient is terminal. We shall now let the scavengers over-run and take what is left while the overlords in the government preside from on high and away from the halocost.


5 posted on 05/13/2009 11:21:49 AM PDT by Sequoyah101 (Half of the population is below average)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Conservative Coulter Fan

Insanity, Complete INSANITY!


6 posted on 05/13/2009 11:27:15 AM PDT by ezfindit (OrthodoxNet.com - Shining the Light of Wisdom and Truth)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Conservative Coulter Fan

We need to get Ross Perot out of retirement and out there talking again 24/7 about Deficits...


7 posted on 05/13/2009 11:28:17 AM PDT by ezfindit (OrthodoxNet.com - Shining the Light of Wisdom and Truth)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Sequoyah101

I don’t believe we are powerless...I believe we are unwilling to advocate and pursue the end of the Welfare State. We are bankrupt...we’re spending money we don’t have and printing money that inflates the money we already have...perhaps we should have focused on on our country’s monetary policy and return to a gold standard, which would automatically make the dollar the most valuable and stable currency in the world.


8 posted on 05/13/2009 11:42:16 AM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Conservative Coulter Fan

I am sorry and wish I were wrong but it is you who are starry eyed. We are willing to end the Welfare State but we are now outnumbered and out promised. The Welfare State has spoken and their benefactors are setting things up to make more of the Welfare State.

The only reason we continue (we conservatives and workers) to work is that we will not accept defeat and just quit trying to achieve our dreams. The Welfare State are counting on us to continue to strive against decreasing odds we will ever succeed.

I see more and more of my business going for taxes, fees and regulations that the rest of the world we compete with DO NOT PAY. Raising prices is not possible, foreign competitors make money without raising prices. In fact, foreign competitors are pushign prices down. The United States have simply created a non-competitive environment for busines and personal prosperity.


9 posted on 05/13/2009 11:50:54 AM PDT by Sequoyah101 (Half of the population is below average)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Sequoyah101

This is where I strongly disagree with you...not even someone like Sean Hannity would come outright and say that we need to end the Welfare State...the Republican Party as a whole wouldn’t advocate it...and even the Heritage Foundation that supplied such graphs are content to reform entitlements. No one I’ve seen publicly articulates ending the Welfare State...I’ve never seen a forcful case presented to the public recently. Anyhow, I don’t believe the Welfare State will end until the country can no longer borrown tax n spend.


10 posted on 05/13/2009 12:29:51 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Conservative Coulter Fan

Social Security and Medicare are NOT entitlements! We pay and our employers match for both in thefts from our paychecks. When you retire, you still pay for both. SS is considered taxable income and retirees pay into Medicare fund.

Both SS and Medicare are liabilties owed to the retirees. I say go ahead and stop paying and their won’t any place in this universe for you to hide. Osama bin Laden would turn them in!


11 posted on 05/13/2009 12:58:02 PM PDT by NTHockey (Rules of engagement #1: Take no prisoners.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NTHockey

Wrong, Socialist INsecurity is a transgenerational ponzi scheme...there is no trust fund...the government confiscates money from you to redistribute it to another group of people....with only the promise that it will rob future generations to pay you...that’s if you live long enough while alternatively you could just as easily take care of your retirement.


12 posted on 05/13/2009 1:14:23 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 11 | View Replies]

To: NTHockey
I say...go ahead...let's keep robbing current workers...and tell your children and grandchildren that the government needs to rob them....soon there won't be a place for them to hide!

"The Social Security system, passed in 1935, is not a legitimate, savings-investment, insurance program. Taxes are not invested into real, income-earning assets. There is no trust fund but in name only. Americans have no property right in their supposed "contributions." The Social Security system today is a compulsory, redistributive, unconstitutional, pyramid scheme that contains the seeds of its own destuction given the demographics of the next 30 years. Reforming or "tweeking" a corrupt system is not a meaningful option. There is only one true privatization reform of Social Security. There is only one Constitutional solution. There is only one economically and morally sound system. Our nation must begin the difficult but manageable process of dismantling the Social Security system - yes, in total. The sooner the debate begins on how best to do it, on how to transition to free-market retirement options with their vast array of investment and retirement program choices, the sooner all Americans will remove the social insecurity in their futures." --Dr. Judd W. Patton Ph.D. (Bellevue University's Economics Departmnet)
13 posted on 05/13/2009 1:18:02 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 11 | View Replies]

To: NTHockey
Here you go...check out this thread

"Well, it is true that workers today pay 6.2% of their earnings (up to an earnings limit of $72,600) and the employer pays the 6.2% as well. Yes, that adds up to 12.4% in payroll taxes. (Self employed pay 15%.) But as economists often say, "There ain't no such thing as a free lunch." That 6.2% "mandated benefit" is not free; it forces employers to reduce workers' market- determined salaries or fringe benefits. Otherwise, the mandated cost would inflict losses on employers, causing unemployment. In other words, mandated benefits simply replace market- determined benefits and/or monetary compensation. Economically this means that workers, in fact, pay the full 12.4%. The bottom line is don't be fooled: It's your money the employer is sending to Washington, D.C.

More importantly, Americans do not have a legal right to these taxes. In 1960 in Flemming vs. Nestor, Mr. Nestor sued the Federal government claiming he had a right to collect Social Security benefits since he had paid his Social Security "contributions." The U.S. Supreme Court ruled that he, and all workers, have no such property right. "I paid in, I contributed, and therefore I deserve my benefits," is, therefore, a common mis-belief among Americans. Congress can change, as the current debate reveals, any and all criteria as to benefit amounts, tax rates, retirement age, etc. They can cut or eliminate benefits regardless of workers' so-called "contributions."

Superficially, Social Security appears to be just a government pension plan for the elderly. Rather, it is a pyramid or Ponsi scheme. It is not based on sound principles of insurance. Private insurance companies invest the premiums of their customers in stocks and bonds and other income-producing assets. Real wealth is created. Later, the earnings from that wealth is used to pay annuities or pensions. But Social Security is not a savings-and-investment program. Social Security taxes (premiums?) create no wealth. The payroll taxes are not invested, but are used to pay current retirees and survivors under the program. It's called a pay-as-you-go system. Some call it an intergenerational income-transfer program. It is indeed! Now understand this, please. A pyramid or Ponsi scheme (illegal in all 50 states) works under the unsound and unethical principle that early investors are paid handsome returns with cash taken from later investors. As long as more and more investors (suckers) are attracted, the scheme works and appears to be successful. Eventually, however, the system collapses with the inevitable decrease in the number of new investors. In like manner, Social Security seemed to work well in the early years when there where few eligible retirees and lots of workers. A person retiring in 1940 could get an inflation-adjusted return of 135%!! But as the ratio of workers to retirees has declined over the decades, so has the average expected return, now 4% in 1999. A minus return is a distinct possibility in the near future. One wonders what Mr. Ponsi would have thought about Social Security "stealing" his idea.
14 posted on 05/13/2009 1:26:01 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 11 | View Replies]

To: All

The fact of the matter is that, perceived or not, believe that it is a retirement SUPPLEMENT. I agree that it is an unconstitutional and illegal system of wealth redistribution. That said, you are NOT going to get away with eliminating SS & Medicare to a whole generation!

Imagine the “welcome home” that any politician will get if it is eliminated. He, his property and his family would be forfeit. It would be 1789, 1861 and 1917 all rolled into one mess.


15 posted on 05/13/2009 2:10:57 PM PDT by NTHockey (Rules of engagement #1: Take no prisoners.)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Conservative Coulter Fan

I think we are just going to have to go bankrupt and end the capacity to tax and spend and pay the Welfare State.

Nobody that wants to win an election can either profess to desire ending the Welfare State nor end it and hope to win again so long as the opposition won’t join them. The voting power of the Welfare State(WS) outnumbers those of us who the power brokers steal from (TAX) to pay the WS.

No, I must continue to disagree with you ...when the founders only provided the vote to “landed individuals” they knew what they were doing. They were preventing the end of the Republic that must arrive when the masses figure out that they can vote themselves appropriations from the treasury (stealing through taxation from those who actually produce something)

And just another collateral tidbit... Average Federal Employee compensation $75,000/yr ...Average US Household compensation $52,000 ...just great.


16 posted on 05/13/2009 2:38:16 PM PDT by Sequoyah101 (Half of the population is below average)
[ Post Reply | Private Reply | To 10 | View Replies]

To: NTHockey

Social 'Security' Now Officially a Laughable Euphemism

Tuesday, May 12, 2009

Michael D. Tanner, senior fellow:

The Social Security Trustees report released today shows that the program's financial crisis is growing worse while Congress has continued to duck the issue.

Moreover, critics of personal accounts for Social Security have pointed to the decline in the stock market over the last few years as an argument against allowing younger workers to privately invest a portion of their Social Security taxes. Yet as the new Trustee's Report shows, the same poor economy that hurts the stock market, hurts Social Security's ability to pay its benefits.

In the end, there are only three possible solutions to Social Security's problems. Taxes could be raised (and the Social Security payroll tax would have to be nearly doubled to keep the program afloat). Benefits could be cut. Or younger workers could be allowed to invest privately. We can have an honest debate about which of those options is the best choice. But, as the Trustee's Report makes clear, we cannot afford to avoid that debate.


17 posted on 05/13/2009 3:03:42 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 15 | View Replies]

To: Sequoyah101
Private Sector Jobs Decline, Government Jobs Increase ... the private sector might be losing jobs, but the Government keeps adding jobs..
18 posted on 05/13/2009 3:07:38 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
[ Post Reply | Private Reply | To 16 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson