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10/13/2009
‘THE FOREMOST CHALLENGE OF OUR TIME’

My new AIP article is up and it returns to one of my favorite - and scariest - policy subjects; the threatened disaster due to entitlement growth.

A sample:

There is a ticking bomb embedded in America’s future that is hiding in plain sight. Everyone knows about it. Everyone acknowledges its potential to do enormous damage to our economy. Everyone is worried that, if not defused, it will destroy the dreams and aspirations of future generations of Americans.

And yet, we continue to act as if we can’t see the danger. We pretend that we can continue to pass the problem along to the next administration, the next congress, the next generation of Americans, as if they will be any different and find the courage to face the cancer that is eating us away from within.

We refuse to address the issue of middle class entitlements and how their growth will eventually impoverish the nation. And every year we delay, the problems only grow worse.

Today, we live in the most affluent nation in the world. This is largely the result of our possessing a hard working, industrious, creative, educated middle class whose amazing productivity is the wonder of the modern world. But certain demographic trends are emerging - trends that no one can stop or alter - that will make it impossible for that same middle class to maintain their standard of living not so many years from now.

As James Capretta points out, writing in the new policy quarterly National Affairs, the middle class entitlements of Social Security, Medicare, and Medicaid were all predicated on a growing, prosperous work force. If that were ever to change, the US government would find itself in the same position that General Motors finds itself today; a company whose own health and pension arrangements with its workforce has bankrupted it…

Read that article in National Affairs by Capretta. Our problems arise because of a well meaning and compassionate government that sought to ease the retirement years of the Middle Class - the backbone of the country and those responsible for creating so much of our wealth. These pension and health insurance benefits were designed in another era, for another subset of demographics. When Medicare was first proposed, the lifespan for an American male was pegged at around 67. Now it’s 82 and couple that with a birth rate that has declined from 3.5 children per couple to around 2.1, and you see the crisis immediately.

More people are living much longer and being supported in their pensions and health care by far fewer workers. Something has to give somewhere, sometime, and it is going to happen sooner rather than later. Every year we delay dealing with Medicare and Social Security, the problems will only get harder to solve.

By the way, National Affairs is a great publication and you should bookmark it. It is the grandchild of the old Irving Kristol policy mag The Public Interest that I can remember back in the 70’s and 80’s going to the library to read every quarter because I couldn’t afford to subscribe. National Affairs didn’t disappoint. Still the same excellent writing, devotion to making issues clearly understood for the reasonably intelligent, and right of center slant.

By: Rick Moran at 10:37 am
2 Responses to “‘THE FOREMOST CHALLENGE OF OUR TIME’”
  1. 1
    jackson1234 Said:
    2:18 pm 

    All true.

    Now a serious question for you. Why then did you advise Republicans to try to help shape a national health care bill the public doesn’t want and that would eventually become the grand-daddy of all entitlement programs the world over? I can’t square your circle, and wonder how you do. I guess you could argue again the GOP could help put the brakes on what will bankrupt this nation, but honestly, how could they? Would they? Even when the GOP regains the majority, which I think will be sooner than you believe, the pressure will be against elimination of whatever insanity the Democrats are about to throw on top of the ticking entitlement program.

    I listen to the Democrats lie and lie and lie about their intentions to reduce Medicare and Medicaid fraud and abuse to the tune of $500 billion, and can imagine them or the GOP or another party two generations out arguing how they plan to eliminate trillions in health care fraud and and abuse.

  2. 2
    retire05 Said:
    5:05 pm 

    Let’s not also forget that when the Social Security Act was enacted, it would start giving benefits at age 65. The average life span of a white male at the time was 58, and even less than that for a black male. In other words, it was never meant to cover as many people as it does simply because they would not live long enough to collect. FDR, and his Democratically held congress were fully aware of the age expentancy rates when they set the age to start collecting benefits at 65.

    There is an excellent book out that gives a shock to one’s brain on how social entitlement benefits are robbing Americans; Stealing From Each Other was written by a 30 year economic professor who out lines it all.

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