News Flash: Entitlement Spending Grows Like Giant Cancer on U.S. Economy

USA Today notes:

The real drivers of looming deficits are Medicare, projected to grow from $516 billion this year to $932 billion in 2018, and Social Security, forecast to grow from $581 billion this year to $966 in 2018 as Baby Boomers retire.

That's not so much wrong as incomplete: We've already got deficits on the discretionary side of the budget ("discretionary spending" is spending which must be approved every year by Congress; it includes things such as military spending, homeland, defense, and most education spending). But the paper of bright colors is right that so-called mandatory spending (so named because it is not subjet to annual budget approval) is a big hairy plague that's only going to get worse before it gets completely catastrophic. And note too that the number of entitlement programs continues to grow: Bush and his pals in the GOP-led Congress pushed through the Medicare prescription benefit in the Aughts and Obama is pushing to make higher-ed grants an entitlement program.

USAT suggests that cutting benefits and raising taxes is the only way to square this problems. But why not start working on changing benefits quickly for people under 50, or 40, or whatever and figuring out other ways to pay for stranded costs than jacking up taxes on the relatively young and the relatively poor (as a group, the elderly are the wealthiest segment of the population, which makes sense since they've have full lifetimes to acquire assets)? Fiscal stability is important for any government, of course, but there's a basic principle that needs to be put in place first: We live in a world where individuals, especially individuals in the private sector, are expected and required to fund their own retirements and take on an increasing percentage of their health-care costs. Society at every level should be shifting to pension and health-care systems in which you are responsible for funding your future. The days of getting supported or subsidized by a large number of younger workers is over (and that's not a bad thing, either, especially as it gives more freedom and flexibility to individuals).

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  • Whippersnapper||

    The private sector can set an example by abolishing senior citizen discounts.

  • Alice Bowie||

    Yea, who needs old people anyway

  • Justin||

    Someone's gotta eat the food cooked at 4pm, right?

  • dmitryb||

    do you really believe that if it weren't profitable for the private industry to give away senior discounts they would not abolish them in a second?

  • ||

    As a start, the eligibility for SS retirement benefits and Medicare should be raised one month annually till they reach age 70.

    A thirty year old would have to wait a little over 3 more years to start slopping at the trough.

  • ||

    Ending early retirement (age 62-65) would probably be a good start, too. And I for one would be fine with that, even though I'm a year into that group.

    The old notion that people need to retire comes from an age when people worked at strenuous physical labor.

    One can make a case for people getting government aid if they're disabled but reaching some arbitrary age does not constitute a disability.

  • ||

    I agree. Even the idea of retirement, especially taxpayer-supported, is a recent phenomenon. Until just a couple of generations ago, people were expected to work and be productive until they died, and if they were too disabled to do so, it was understood that your care was the responsibility of your children and other relatives.

  • Invisible Finger||

    J sub D, I think that was put in place during Reagan's tenure. I think the first birth year that was affected was 1964 - you don't get SS benefits before 65.25 years of age. I think 1966 birth year starts at 65.5 years of age.

  • kinnath||

    Born 1957. Must work to 66.5 years to get full SS benefits.

    It has already started.

  • Brian Sorgatz||

    Will the 2010s have something in common with the 1960s (but for different reasons): intergenerational strife?

  • ||

    If the current framework is unchanged, I think the answer is yes. I've read studies to the effect that Social Security can be "saved" by tweaks here and there--e.g. raising the payroll tax cap, delaying retirement to say 70 or 72 (perfectly reasonable, as people are living longer and staying healthier longer), means testing, etc. All that can be done to Medicare too.

  • Alice Bowie||

    Absolutely!!!

    It's just that conservatives/libertarians and people that ALREADY HAVE MEANS to RETIRE are stingy and simply don't believe in mandating that working people pitch-in for the common good.

  • Burrow Owl||

    OMFG!

    The audacity of those people!
    I mean really! They have the nerve to object when goons in clown suits show up to steal their stuff in order to give it to the parasites who deserve it ohhh so much more than those who actually worked for what they have!
    The horror!

  • ||

    @Burrow Owl,
    I am with you on this!!! How can Social Security or Veterans Benefits be touched at ALL? The welfare roles of young able bodied SOB's should be the first to go!! Get off your ASS and make a living!! Leave our Elderly and Veterans alone!!!! I am about to write the damn White House!!

  • kinnath||

    . . . . simply don't believe in mandating that working people pitch-in for the common good.

    From each according to his/her ability, to each according to his/her need.

  • Banjos Kick Ass!||

    How dare they try to be independent of the government! How dare they work hard, sacrifice to take care of themselves, and not expect anyway to take care of them! How dare they!

  • anonymous||

    "for the common good"

    There's a big difference between "the common good" and "the good of a few unfortunates, idiots, and/or assholes"

  • Brian Sorgatz||

    "A little rebellion now and then is a good thing."—Thomas Jefferson

  • kinnath||

    My daughter recently completed her Associates degree in accounting. She says that she expects to work until she dies, because the system will collapse under the weight of the boomers.

    I was so proud of her.

  • Roadkill||

    I've been telling my 20-something kids for years...the best day in their lives will be the day the last baby boomer dies.

  • Banjos Kick Ass!||

    I say let's add even more weight to the sytem. The more weight we add, the sooner the system will fall. So bring on socialized medicine, and while we are at it, let's give a pony to every child and a golden wheelchair to every senior citizen. The roof, the roof, the roof is on fire. We don't need no water let the mother fucker burn, burn mother fucker burn.

  • Jersey Patriot||

    USAT suggests that cutting benefits and raising taxes is the only way to square this problems. But why not start working on changing benefits quickly for people under 50, or 40, or whatever and figuring out other ways to pay for stranded costs than jacking up taxes on the relatively young and the relatively poor (as a group, the elderly are the wealthiest segment of the population, which makes sense since they've have full lifetimes to acquire assets)?

    I have no idea what this is a proposal to do. Altering benefits for people due to collect Social Security or Medicare in 3 decades doesn't do anything to solve their 2018 problems. Those problems will have to be dealt with through benefit cuts and/or tax raises.

  • ||

    That's why I'm pessimistic about Social Security reform incorporating any degree of privatization. Such reform invariably creates a "sandwich" problem--there is going to be one age group who simultaneously must pay out the ass to support current retirees while having no benefits for themselves. I think the system will lurch and stumble along for a while, rescusitated by various raises in taxes and the retirement age, and then suddenly collapse and everyone's on their own.

  • Alice Bowie||

    I agree.

    And what exactly r we suppose to do with the people that r over retirement age and have no benefits? Kill them?

    They're gonna come to the government for help. We're gonna pay for them ANYWAY.

  • ||

    Maybe I'm pessimistic but I think prevailing attitudes about euthanasia may change. At a minimum, the days of "err on the side of caution, spare no expense to extend life, no matter how short a period of time" being the default position for hospitals to take (if there is not an explicit living will) will end.

  • Alice Bowie||


    The days of getting supported or subsidized by a large number of younger workers is over (and that's not a bad thing, either, especially as it gives more freedom and flexibility to individuals).

    IT is NOT a good thing. It's probably the ONLY thing that would work.

    I'd say, any retired/disabled person in the US that receives TWICE the NATIONAL MEDIAN INCOME in revenue from their own sources should NOT be entitled to CASH entitlements. That is, social security checks and the such.

    I see no reason in raising the retirement age to 70 and taxing the young.

    BUT, you CAN'T TAX the YOUNG if the system is not goin 2 b there once they retire.

  • short, fat bastard||

    Wasn't that long ago that we believed that hysteria was caused by lack of orgasms.

    Just sayin' Alice.

  • ||

    you've got a real intermittent issue with that caps keY, aLICE.

    I'm one of those people of which you speak, or at least I will be soon.

    Points to make - I have paid $ since I was 16 years old to the govt to support those older than me. The ponzi scheme that was set up to run SS in the 30's doesn't give me the return that I would get from this $ if I'd invested it for myself, but at least I was promised that I would get something like the same degree of return that those who preceded me would receive. You propose to disqualify me by virtue of my diligence in saving, investing and preparing for my future. At the same time you propose to take my money and give it to those who have been unwilling or unable to prepare for when they would no longer have regular income generated by other means for their retirement.

    Think through the implications of human nature in all human cultures.

    Do you get what you reward via incentive? What are the implications for the overall creation of wealth and availability of capital in society?

    That is, unless you'd like to abolish capitalism. In that instance, your comments are completely understandable.

  • Itchy Puss||

    Look,

    To make TWICE the Median US Income (+-$50,000) you'd have to have $4,000,000 in Assets. Can we safely say they don't get their precious share ?

  • ||

    "I have paid $ since I was 16 years old to the govt to support those older than me. The ponzi scheme that was set up to run SS in the 30's doesn't give me the return that I would get from this $ if I'd invested it for myself..."

    I have a lot of sympathy for your position. But I am a book/paper dealer and have turned up in people's estates SS records from the 1950s and 1960s and it's shocking how little they paid in.

    You can find a chart online showing SS contributions over the years. In 1965, the maximum contribution for employer and employee to FICA was $348.

    Today, it's $16340.

    FORTY SEVEN times as much, and with less certainty of getting anything out of it for young people now.

    So while I agree with your point, it's only right that you share the pain, since what you put in is a pittance compared to what we endure today.

  • ||

    In 1965 when fica was $348 you could purchase a 4 bedroom custom brick home on 1 arce for less that $19,000. Today you are luck to buy that house for $190,000. A car cost less than $2,000 you cannot find a new car for under $12 or $15K. Milk was 5cent a gallon, today it is over $4.00. Inflation has hit everything and everyone, that is no excuse to say the elderly today should not expect to recieve their retirement or that I should not expect my retirement.

  • ||

    Have you lost your mind? Do you not realize that the social security check you are talking about receiving is money that we pay to the goverment out of each pay check with an expectation to have a retirement? FICA is meant to pay into the social security fund medicare/medicaid for retirement, not spent on WARS.

    I personally pay almost the full if not the full FICA tax each year (over $8,000). That means in the last 10 years I have paid into my retirement $80,000 -- YES I EXPECT TO GET GET MY SOCIAL SECURITY CHECK from the US Government every month when I retire, and I'm pissed off that it is being suggested my money will not be there for my retirement! Imagine the nest egg I could build myself and my family with that $80,000!

  • Invsiible Finger||

    We're already seeing people in their 20's competing with people in their 60's for minimum wage jobs. You keep extending the retirement age, you increase the supply of labor and depress wages. Minimum wage laws won't fix that - somebody's going to remain unemployed; give me UE benefits or give me SSA benefits.

    Be careful what you wish for - extending retirement age will wind up only extending the compulsory school age to 21 or 22.

  • ||

    How is the government returning my Social Security premiums to me in my old age "a cancer" on our economy?

    That is the dumbest thing I've read today. It's our money. I suppose you'd rather Washington keep it to build more empty airports?

    If Medicare is a "cancer" the cure is getting the government out of the health care providing business and returning us the 1.75% payroll tax they take at the barrel of a gun.

  • ||

    No, your money was wasted by politicians decades ago. Your SS welfare payments will be funded exclusively from the labor of the workforce at the time you collect them.

    Oh, and medicare is currently consuming 2.9% of payroll and hopelessly insolvent.

  • Jeffersonian||

    How is the government returning my Social Security premiums to me in my old age "a cancer" on our economy?

    Because they've spent it all already. It's not stuffed in a mattress in DC. To pay your SS, they have to snatch it from your kids and grandkids.

  • ||

    That's right... they're not "returning your money", they spent it the same year you paid it, to buy government debt - which they THEN turned around and spent on other things.

    I've paid into SS my entire working life, as well, but I'm not going to see a single dime. It's simply not possible - the math doesn't work out. It's a giant Ponzi scheme.

    The boomers are just going to have to get used to the fact that they do not have some magical claim on part of my income for the next few decades so that they can sit on their asses and play shuffle board for their last 40 years. When it comes down to it, sure, maybe you outnumber us, but you're OLD. You want to push the issue? Fine, we can resort to cattle cars and ovens.

    People knew this was coming since before my generation was born. You have no excuses, you greedy bastards.

  • ||

    The failure of the social programs may be due to abortion policy. 60 million more workers would have been born to pay into the system. So raising retirement age and cutting bennys will be necessary.

  • ||

    The post above demonstrates the crux of the problem. People think Social Security payments are "premiums"...not the TAXES that they are.

    Face it. The bulk of your social security dollars (taxes) are being spent TODAY.

    Get everyone to understand THAT...and you'll see a culture change. As long as even LIBERTARIANS can fall for what was posted above (social security "premiums") we don't have a chance.

  • ||

    SS payments are not a gift. Real money was paid into the (shitty) system and I would like to get back my money at the wonderful 1% or so it "earned".51 years paying in, you should get it back. I'll never live long enough.

  • ||

    I've been paying into the SS system my whole working life. If I'm not going to get anything out of it, I'd like to opt out and keep my money and let it work for my future instead of someone else's. Where's the magic "off" switch that makes it so?

  • Jeffersonian||

    The switch isn't the problem. The problem is the big-ass gun you need to have to keep the folks in DC from turning it back on again.

  • ||

    The gov should start by not paying for drug rehab, stop paying SSI to alcoholics and addicts and clean up welfare fraud and medicaid, medicare fraud and get the damned unions out of the government. Get SS out of the general fund and stop Congress from using it to pay other bills.(thank you LBJ for that piece of work) Start there and get a plan going.

  • Mitch||

    I'm at the age where some of my friends, or their older siblings, are starting to collect Social Security. In many cases, they had not planned on doing so, but had little choice in "retiring" early. If you are 60+ when it happens, you will likely never work in your field again. Believe me, you don't have to hear "over-qualified" too many times before you figure out it's a euphemism.

  • ||

    There are only two approaches to controlling Medicare costs: rationing/denial of care and requiring insured seniors to have significantly more skin in the game.

    The first is in use currently though in back-handed fashion. Cuts in Medicare reimbursements cause providers to drop out of the system making it more difficult for seniors to find doctors and/or get timely care. At a certain age, care delayed can end up being care denied. Conceivably, it could get to the point where the only place Medicare recipients will be able to get care is in the ER.

    The second is my favored approach. My mother announced recently that next time she had to go to the ER, instead of calling me, she was going to call a ambulance whether needed or not so that she wouldn't have to sit in the waiting room. And why not? It's not going to cost her anything. Her Medicare premiums are very low and deducted from her SS so she never even sees them. Many, if not most, senior citizens can afford to pay a significantly larger share of their medical costs. The system should not subsidize everyone to the extent it does. And the undeniable truth is, many seniors use medical services frivolously. They might rethink that behavior if it started to put a significant dent in their bank accounts.

    Both programs require massive overhauls. Means testing, reductions in benefits, higher ages for eligibility and at least partial privatization are in the future. Now all we need are some politicians with the guts to do it.

  • SenatorMark4||

    IRS Form 1099-GOV for all recipients of entitlements. When Texas went from paper food stamps to the LoneStar card in order to "reduce" fraud, almost 100,000 families decided they really didn't want to apply for it. Go figger! It'd be nice if they had to file a return, too, even if they don't pay taxes. Share the wealth...and the pain.

  • ||

    I see that some of us still believe that SS money collected is going onto some sort of "lock-box."

    I remember the day I became a conservative. It was in high school civics class, about 1963. (Yes, I am of that certain age). The teacher was explaining how SS worked--the Ponzi scheme aspect of it, and there almost a riot. Now this was what we would now call an AP class--the top 40 or so kids in the school, definitel;y all college bound, and they couild not accept it. The lock-box myth was that deeply ingrained.

    At that point I realized how much trouble we were in. If the smart kids were so so conned, what hope was there for the general-ed types, not just in my school, but all over the country.

    A further note on the notion of raising retitremnet ages to get out of the trap, we should not forget that many of us do not work at a desk. For someone in construction, transportation, materials handling--things like that--working past mid-sixties is out of the question.

  • ||

    I went into the Navy in 1961, got out in 1965 and have never been unemployed for more than a few weeks since. I'm ready to give up being employed and work for a living.

  • ||

    The very word "entitlement" gets under my skin.

  • ||

    Mine too, Bill. But, if the Gov't was entitled to claim a portion of my paycheck over my working career under the pretext of a promised return in my retirement, then I'm entitled to believe they should live up to that promise. It's a two way street. Many seem to think only the govt. should be entitled to anything.

    It's really a private property issue. If entitlement is just a one-way street with the govt. entitled to whatever it wants and citizens entitled to nothing, then the concept of private property goes out the window. Anything you've worked for is fair game for the govt. at any time. You're not entitled to the use of any of it.

    This sounds OK to people starting out as they have little or nothing. Over time, that will change. The old will leave and everything that's here will fall into their hands...one way or another. Unless, of course, the govt. claims it all as theirs. Be careful what you wish for.

  • ||

    Entitlement spending was enacted during boom times we will not see again if ever, why should we be forced to pay into a system that is clearly unsustainable? "Entitlement" is simply a sophisticated euphemism for stealing. No person should be entitled to the fruit of another's labor. However, if we expect to cut senior benefits, we should be prepared to find renumerative work for all who are able to work again. It is neither humane nor fiscally prudent to put millions of seniors on the street with no visible means of support.

  • StoneHead||

    Entitlement is not a direct euphemism for stealing. it is a euphemism for income redistribution, which in turn is a euphemism for socialism. The entire SS system (together with Medicare) is a plan by determined leftists to drag the United States into the same failed system that was in effect in Russia under Communists and Western Europe under the socialists (who have never actually had to pay their own bills thanks to the United States). You're absolutely correct that anyone who pays into the system today will never see a single cent from it. It is legalized thievery.

    As for the boomers, they are probably the most selfish and least productive generation in American history. That generation has done virtually nothing to build up this country, but instead they have engaged in destructive behavior. Many of them are out and our traitors (Bill Ayers comes rather quickly to mind). I have no compunction about stripping their retirement benefits from them - they are largely responsible for the mess we find ourselves in today. Remake SS to be a last-resort. Stop payments in and make it a last resort FOR CITIZENS ONLY. And yes, getting the governemnt out of healthcare is a wonderful idea. They have created most of the problems we currently face. HMOs? Big bills? Lack of transparency? All due to government directives. Let's go back to paying for our own care. It's a service folks.

    However, the only way to change it is to make our elected representatives aware that we are sick and tired of the government stealing from us. Since the majority of the American electorate is either ignorant (is there any other explanation for the election of Barack Obama) or simply too used to sucking from the government trough to actually make that change, I doubt we will ever be able to wrest back control from the bloated plutocrats in DC. But we need to. The idea of limited government has been under attack from both Republicans (bad) and Democrats (worse) for years. It's time for a new Contract With America - one that contains five planks. 1) Shrink government. 2) Stop spending our money on Ponzi schemes. 3) Cut taxes and make the tax code simple. 4) Stop the criminalization of America. Sorry, owning a gun should not be the IRS's business. 5) Protect America. No more rights for people specifically excluded from the Geneva Conventions. And precisely what law/treaty was Boumedienne based on? I cannot find a single US law or treaty that establishes that POWs get access to US criminal courts. And if POWs don't, how can illegitimate combatants gain such access? I think that a lot of Americans, maybe even a majority, could go along with that. Just my two cents.

  • Grandpa||

    It was the democrats who robbed and spent the SS monies originally untouchable. It was they who thought up welfare, foodstamps, mortgages to those who now can't pay it back. It was they who have ALWAYS spent monies yet to be collected. Get rid of the damned bleeding heards and liberals who never worked for anything in their lives!

  • ||

    J sub D refers to SS benefits as "slopping at the trough." I have been paying into SS since 1962 and as of May '09 I have paid in $72,859 and my employers another $50,714. At a nominal rate of return over 48 years, say 3%, I should have a multi-million dollar annuity waiting for me. And I have only made a modest salary--the big earners have already contributed hundreds of thousands of dollars. Point me to the tough.

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