When our country was founded, Thomas Jefferson had this to say about the U.S. government. "When the people realize they can vote themselves benefits, all is lost."
Well, we have arrived. The vast majority of people want our government to get control of spending. Except when it comes to their benefits. "Don’t take away my benefits. I need them." Politicians give out our tax money to buy votes. They don’t dare talk about taking anything away.
It could be argued that if one party controlled the House, Senate, and Presidency, there they could deal with our debt problem. However, on more than one occasion over the last 20 years, one party has had total control. Nothing has been done.
Take a look back. We have built a huge welfare state starting in the 1930s. Even with the cost of WWII, our debt was a manageable 35% of GDP. Today, it is 74%, and if we don’t take some action, by 2024 it will be 90%.
President Obama released his 2015 budget last week. Everyone says it is dead on arrival. It is nothing more than a campaign paper spending money we don’t have.
Fortunately, we still have a sequestration law in place to keep a lid on regular spending, including defense. But it does nothing to deal with our entitlement spending programs. I’m talking about Social Security and Medicare. Our population is much older now and the entitlements are eating up all the money.
Here is an example. An average Medicare couple pays $109,000 into the program. They will get $343,000 in benefits out of the program. They come out ahead by $234,000. Social Security has the same kind of shortcoming. We are living too long. Are we going to fix this unsustainable shortfall or are we just going to ignore it, and let our children pay?
With an election coming up this fall, the easy way out is just to deny the risk, and kick the can down the road another year.