Category: Opinion Published on Wednesday, 24 February 2010 11:02 Hits: 807
Like wine, entitlements cost money. Sadly the more addicted we become the less money we have to spend on more important and often essential things. The wino lacks food, housing and clothing; the entitlement addict lacks employment, savings and luxury.
Consider that today our national debt stands at roughly $12 trillion or roughly 70 percent of our gross domestic product or GDP. But wait. We have promised today’s workers Social Security and Medicare benefits totaling another $41 trillion. Toss in another trillion for miscellaneous expenses, and suddenly our debt skyrockets to $54 trillion. In layman’s terms it means in order to pay our future obligations we would need $54 trillion dollars invested today. How much of that money does this nation have sitting around? Zip! Zero! Zilch!
The next politician that proposes to solve this problem by cutting waste should be laughed out of office. The truth is that the result of our addiction is so severe that we could end ear marks, allow the Bush tax-cuts to expire and end the war in Iraq and still be some distance from solving this nation’s fiscal crisis.
How serious is it? At the rate we are spending entitlement expenditures will represent a full 3/4 of our federal budget by the year 2030. A decade later—when today’s college students begin to retire-our debt will have risen to 244 percent of GDP. This nation will be so broke that we will only be able to service our public debt and pay out some social security and Medicare benefits. All other parts of the government will be shut down.
What does the wino do when he has consumed all his wine? He begs others for theirs. Rather than a world leader—we will be a nation at the behest of others. Rather than a strong and secure people—we will be a nation, to paraphrase the bard, whose hearts will shake at every feeble rumor and whose enemies, with the nodding of their plumes will fan us into despair.
Clearly something must be done. I mean besides immediately instituting government health care.
On Feb. 16 President Obama announced the creation of a deficit commission charged with rooting out ways to restore fiscal discipline to Washington. This announcement came on the heels of his announcement of a $3.8 trillion budget, which anticipates—by their own accounting—a $1.6 trillion deficit. It has been reported that in certain parts of Brooklyn and in a particular household in Los Angeles it was shouted, “I’ve got your deficit commission right here!”
Chairing the bi-partisan commission will be former senate Republican leader Alan Simpson and former Clinton advisor Erskine Bowles. The president betrayed his lack of seriousness when he let slip that he expects the commission to find a way to “pay for ALL FEDERAL PROGRAMS.” (Emphasis mine)
In bringing down the deficit and reducing our national debt there are truly only two choices: either we stop spending or we raise taxes(there is also the option of both raising taxes and increasing spending favored by many on the new left or that favored by the GOP: cutting taxes while raising spending.) Our addiction makes it unlikely that we will do away with federal programs and entitlements; recent attempts to reform Social Security, for example, were met with a stone wall. And because cutting spending often means offending constituents, the solution most favored by politicians on both the left and right is that of raising taxes.
In order to keep up with our addiction we will have to double our federal tax rate across the board. It won’t be as easy as laying the burden at the feet of “the wealthy” or those making over $250,000 per year. There simply aren’t enough people making that much money to pay for all the spending. The burden will be borne by everyone. On the bright side the increase in taxes will mean that businesses will stop hiring so a lot of folks will not have to pay the higher taxes because they will not have earned any income.
Commissions made up of Democratic fools and Republican lackeys do not automatically make for good policy prescriptions. I dare say it was some brilliant commission that is responsible for creating the mess we currently find ourselves in. The truth is that we do not yet know which congressmen will make up the body of this commission; no doubt they are all grand fellows. However unless they begin their task with a discussion on taming the $54 trillion dollar beast that awaits the next generation—none of them is serious. They are, as Curtis Mayfield sang, simply “your pusher man.”
(Joseph C. Phillips is the author of “He Talk Like a White Boy.)
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