Spending on autopilot programs like Social Security, Medicare, and Medicaid is the main driver behind this increase over the historical baseline. This chart illustrates the problem we face. Under current law, CBO projects that spending on Social Security and major health care programs — mainly Medicare, Medicaid, Children’s Health Insurance Program — would be 12.2 percent of GDP in 2021; a 70 percent increase relative to the historical average. All spending apart from this and interest payments on the debt have averaged 11.5 percent of GDP during the past 40 years. That broad category includes defense (largest single item), food stamps, unemployment compensation, veteran’s benefits, transportation, and other programs.
As you can see, while entitlement programs (and interest payments) are consuming a larger share of the wealth created, all other spending is shrinking. We can continue to fuel the spending fire — and ignore these chilling facts — or we can reform these programs. The debt deal unfortunately failed to address these pressing issues in spite of warnings from the rating agencies. We can only hope that now that the cash flow crisis is been averted (it never was a default crisis), Congress will finally focus on this key problem.
Here is great post by Kevin Williamson about what needs to be done as soon as the president signs the debt deal.
As a proud new recipient of Social Security who, considering that I am a male, am not getting any actuarial windfall from the program (although, obviously, future "beneficiaries" are apt to do much worse), I ~hate~ that this program lumps together an earned annuity with a disability welfare program that is subject to massive fraud. It seems to me yet another way to confuse the citizens while robbing what should be a responsible program to generate transfer payments more often to crack babies and miscellaneous scam artists than to people with "legitimate" disabilities. Not that being a crack baby is not a disability...it is just not the sort of thing that one usually thinks of as being covered under a disability insurance program. All of this seems to have most of the country thinking that retirees getting "government checks" from SS are somehow in on the scam. They need to know that a lot of those SS checks are not actually going to retired geezers.
Reply to this commentLinkReport AbuseI know I sound like a broken record, but real entitlement reform is not possible with a Democrat majority in the Senate and Obama in the White House. The American people have three choices in 2012:
1) Continue w/ divided government and thus continue down the road to financial ruin.
2) Decide they enjoy the carnival ride and want to speed it up by turning everything over to the Democrats.
3) Take a gamble that the GOP is not really a party of terrorists who want to destroy life as we know it, but rather a party that has found religion in regards to incontinent spending and wants to save America via a reduction in spending coupled with pro-growth economic policies.
Honestly, I'm not sure what is going to happen. We know that Obama and his echo chamber (aka, the MSM) will distort, lie and demagogue like never before. We also know 100 years of progressive policies coupled with a dysfunctional public education system have created a sizable percentage of Americans who believe that not only should the Federal Government take care of them via the redistribution of ill-gotten gains, but that the Federal Government also has the secret recipe for a 'free lunch'.
The fate of American truly hangs in the balance, and there's no guarantee that conservative control in D.C. starting in 2013 will be able to save her.
Reply to this commentLinkReport Abuse"As you can see, while entitlement programs (and interest payments) are consuming a larger share of the wealth created, all other spending is shrinking."
Hey, you're off message here!
I thought Mr. Obama was the biggest spender of all time!
Oops. And so the lie is exposed.
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