Friday, November 7, 2014

Washington's Mathematical Mess: America's Looming Entitlement Tsunami

Washington's Mathematical Mess: America's Looming Entitlement Tsunami:

Milton Ezrati

Domestic Politics, United States

"The arithmetic is irrefutable, whatever some people would like to believe. There simply is no room in the budget for much else but entitlements." 

With the midterm elections now concluded, people should naturally want to consider how Washington might shift its spending priorities. The answer, regardless of what the candidates have promised or whoever runs the government for that matter, is that Washington can change very little on this front. Entitlements—Social Security, Medicare, Medicaid, unemployment insurance and the upcoming outlays associated with the Affordable Care Act—so dominate the budget already that there is little room for anything else. Without serious reform in these areas, such financial constraints will only intensify in coming years and ultimately close out all other spending options, whatever presidents, senators, or Congress people say.

These constraints are crystal clear in existing budget data. Entitlements have grown relentlessly over the decades, from 30 percent of all government spending in 1950 to fully 70 percent today. They amount to 15 percent of the gross domestic product (GDP). More than one dollar in seven, then, of everything this country produces now gets paid out in one or the other of these programs. Since the full implementation of the Affordable Care Act promises only to increase those proportions, and voters clearly show no desire to fork over still more economic resources to Washington, the rest of the budget, everything else that Washington does, faces a relentless financial squeeze.

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