Are Entitlements Really the Problem?
Byron York has an excellent piece in the Washington Examiner today that spells out exactly how we came to be in the current fiscal crisis that afflicts our federal government. He details in easy to follow numbers that while some of the budget deficit is a result of the economic downturn and resultant costs, entitlements have actually added a rather small amount to the problem.
The real budget buster has been the massive new stimulus spending that Obama and his fellow Dems have undertaken. Here's the money quote:
The bottom line is that with baby boomers aging, entitlements will one day be a major budget problem. But today's deficit crisis is not one of entitlements. It was created by out-of-control spending on everything other than entitlements. The recent debt-ceiling agreement is supposed to put the brakes on that kind of spending, but leaders have so far been maddeningly vague on how they'll do it.
Given the reality of our fiscal crisis and the main cause, which this article details, I believe the GOP nominee must be very careful in approaching entitlement reform in the coming election. We need to stop this outrageous new spending and get the economy back on its feet before we can address the long term entitlement issue. We need to be very careful about spooking the electorate and throwing away our presidential chances in 2012.
Thoughts?
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Comments :
Aug '10
Re: Are Entitlements Really the Problem?
Do the expansion of the entitlements qualify as spending ? Alot of the spending has been headed out the door in the building of the voter base....I mean.. the everwidening door of eligibility for entitlements of every stripe and color.
Sep '10
Re: Are Entitlements Really the Problem?
There's no doubt that the recession reduced the revenues to the government, which, if non-entitlement spending had stayed flat, didn't help the debt situation.
So I disagree with York's article; entitlements are the problem, because there's no buffer at all when the economy goes south. It's like me taking out a mortgage and couple of car loans and not having trouble paying for it as long as the monthly bonuses continue. But then my employer ends the bonus program, and all of a sudden I'm underwater. I still have income, but I stretched myself too thin and now I can't afford my obligations.
Edited on Aug 23, 2011 at 12:06pmDec '10
Re: Are Entitlements Really the Problem?
I've been beating this drum for a while. Entitlements are a coming problem, not a current problem. Added to the current profligacy of the congress, disaster is inevitable. The very first thing that needs to be done is to return to a stimulus free baseline.
Aug '10
Re: Are Entitlements Really the Problem?
Exactly. I'd hate to see our nominee crash on the shoals of entitlement reform in 2012 when we still have time to fix that issue. Even if the GOP controls the House and Senate in 2013 Obama can still do tremendous damage by executive fiat and judicial appointments. And you can bet he will veto any meaningful spending reductions or entitlement reform congress may put forth.
We are on the edge of the abyss and 4 more years of Obama will push us over...
Feb '11
Re: Are Entitlements Really the Problem?
Could not agree with you more. It is the baseline that is the problem that should be tackled. Tackling social security and medicare should be handled through an increase in retirement age tied to an increase in human longevity. Every year of human longevity should lead to a year's increase in when social security and medicare are received.
Mar '11
Re: Are Entitlements Really the Problem?
Conservatives should address both problems head-on. Recent spending mega-increases AND entitlements need to be addressed and sold. The climate is right for it and we should not let a good crisis go to waste!
To reform current spending and entitlements will require the consent of the governed. If we can't sell the public on it now we may never be able to until it is too late. If the public doesn't buy it and re-elects liberals, then we will go to hell sooner. If we pussy-foot about entitlement and spending reform for electability purposes, the traditional approach of Rockefeller Republicans who try to make the welfare state more efficient but don't try to end it, then we will just go to hell later rather than sooner. If we are going to hell let's not prolong the agony. It means we get to start over sooner.
Jun '11
Re: Are Entitlements Really the Problem?
You're right. Entitlements are a coming problem. But we don't know when it's coming. We have time to focus on non-entitlement spending if we don't have a spike in interest rates that would drive up our cost of debt service; if we don't have another economic downturn that drives down government revenues; if we don't have some natural (or man made) disaster; if we don't get into a major war; if, if, if...
I don't think it's wise to adopt a political strategy that relies on everything proceeding along smoothly.
I wish it were otherwise but I believe we have to deal with all government spending including entitlements now.
Sep '10
Re: Are Entitlements Really the Problem?
As a political strategy for the election, I think you're right. A Republican message that spending has gone through the roof because it was directed towards Democrat interests will be better than one on entitlements. The latter message is one the Democrats can demagogue as throwing Grandmom off the cliff. They'll try that in any case, but if the Republicans are running on cutting back entitlements, they'll just make the Democrats' job easier.
May '10
Re: Are Entitlements Really the Problem?
100% with Tenn. Patriot. While the $4+Trillion run up in cash debt is largely due to insane spending, we have another $65 Trillion of unfunded entitlement liabilities right around the corner - and closer with every new estimate. Either we deal with everything: spending, entitlements, priorities up front or we face rapid deterioration. Dealing with them requires a public debate and a resulting mandate from the electorate.
I'm not comfortable that the present GOP cast has the ability to articulate properly and win the debate.............or are in fact totally convinced themselves. I do not see any way to successfully shortcut the articulate/debate - mandate process however.
May '10
Re: Are Entitlements Really the Problem?
Entitlements are most definitely a problem: Our deficits project to be $1 trillion + every year for the next decade (even under CBO's optimistic assumptions), primarily due not to our current recession or stimulus residue, but to the entitlement state.
In Ryan's words, it's the most predictable crisis in history, and, to quote Daniel Hannan in a similar context, we're "sailing into those squalls with our hull pressed deep into the waterline under the accumulated weight of our debt."
Good luck with that. Let's get 'er done (even while, of course, promoting economic growth and prosperity -- as Ryan does).
Aug '10
Re: Are Entitlements Really the Problem?
Scott Reusser: Entitlements are most definitely a problem: Our deficits project to be $1 trillion + every year for the next decade (even under CBO's optimistic assumptions), primarily due not to our current recession or stimulus residue, but to the entitlement state.
In Ryan's words, it's the most predictable crisis in history, and, to quote Daniel Hannan in a similar context, we're "sailing into those squalls with our hull pressed deep into the waterline under the accumulated weight of our debt."
Good luck with that. Let's get 'er done (even while, of course, promoting economic growth and prosperity -- as Ryan does). · Aug 23 at 5:58pm
You need to read the article, Scott. SS amd medicare spending have only gone up a total of $280 billion since 2007. Not an insignificant amount to be sure but hardly the cause of our current $1.4 trillion deficit
Dec '10
Re: Are Entitlements Really the Problem?
The problem is that money is fungible. The government does not count tax receipts from income, corporate, SSI, or medicare differently. It's all income to the government. It all goes into the same overdrawn checking account. Everything the government pays out comes from that same account. It does not matter that the government took your money as a social security, medicare, or income tax. It simply becomes the public's money to spend however the representatives of the public see fit. "The proceeds of both taxes are to be paid into the Treasury like internal revenue taxes generally, and are not earmarked in any way." (Helvering v Davis) Further, the money is no longer the property of those who pay it. "The noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments." (Flemming v Nestor) It's just a tax like any other. The payments are just welfare payments. The government simply spends more than it can take in through taxation. Medicare and SSI are simply growing branches of the root problem.
Edited on Aug 23, 2011 at 8:09pmOct '10
Re: Are Entitlements Really the Problem?
Frozen Chosen
You need to read the article, Scott. SS amd medicare spending have only gone up a total of $280 billion since 2007. Not an insignificant amount to be sure but hardly the cause of our current $1.4 trillion deficit · Aug 23 at 7:34pm
GOP should be careful, but the Ryan plan doesn't affect Medicare for seniors or those 55 years old or above. It preserves it. The reform plan only changes it for the younger generation. Obamacare on the other hand will cut 500 billion off medicare and move it to the dems healthcare plan, which means the quality of medicare services for seniors will definitely be affected.
May '10
Re: Are Entitlements Really the Problem?
Frozen Chosen
Scott Reusser: Entitlements are most definitely a problem: Our deficits project to be $1 trillion + every year for the next decade (even under CBO's optimistic assumptions), primarily due not to our current recession or stimulus residue, but to the entitlement state.
In Ryan's words, it's the most predictable crisis in history, and, to quote Daniel Hannan in a similar context, we're "sailing into those squalls with our hull pressed deep into the waterline under the accumulated weight of our debt."
You need to read the article, Scott. SS amd medicare spending have only gone up a total of $280 billion since 2007. Not an insignificant amount to be sure but hardly the cause of our current $1.4 trillion deficit · Aug 23 at 7:34pm
I did read it. It addresses only the causes of our current deficit, not the looming crisis of our future deficits, which are entitlement-caused and can only be mitigated if we institute a long-term plan for solvency, and soon.
But here we are, once again, rationalizing our way into kicking the can still further down the road. Very frustrating.
Dec '10
Re: Are Entitlements Really the Problem?
Scott, I don't think we're trying to kick the can. We're focusing on the more immediate problem, and it just so happens to be one heck of an electoral issue. Using it we can gain the necessary position to do what needs to be done on the bigger, scarier, longer term problem of the entitlement crisis.
May '10
Re: Are Entitlements Really the Problem?
I agree with Scott that the can is heading down the road with reckless abandon. The Ryan plan was meant as a starting point and gets us maybe 1/2 way to where we need to be. Given the imminent crisis in Europe, Japan starting to come apart, radical adjustments required in China, countries like Switzerland, Canada, Norway that try and manage their currencies responsibly but can not from pressure from those that refuse to - either we deal with our fiscal issues in this election debate or they will deal with us very shortly thereafter. Predictable crisis it may be, but we are rapidly running out of time to deal with it.
Regardless of our willingness to confront the issues before us, I strongly suspect we will be forced into the debate before Nov. 2012 by events. I think it will be a very rocky ride.
Jul '10
Re: Are Entitlements Really the Problem?
From an email to Rush Limbaugh:
Reduced to more conceivable terms this the situation:
A family (or business) with $21,700 of income spends $38,000 in one year, adding $16,000 of debt on their credit card to a balance already at $142,000. They decide to "get serious" so they cut spending by $385.
Add eight zeros to all figures and you have the situation in Washington. And they're puzzled as to why the Hoi polloi is so upset.
May '10
Re: Are Entitlements Really the Problem?
Hope so, but keep in mind that part of "gaining the necessary position to do what needs to be done" is talking about it, changing minds, making independents aware that action is needed, etc. It's not just electoral math that needs to change, but also conventional wisdom -- the zeitgeist, as the educated people say -- and that requires discussion, and lots of it.
Edited on Aug 24, 2011 at 5:33amMay '10
Re: Are Entitlements Really the Problem?
We are stupid, though. Why? Because we jump up and down and stamp our feet over "no more revenues!", which is a position that is 1) hard to support, and 2) not the real problem.
People like "free" stuff. Until you persuade them otherwise, politicians will respond and provide "free" stuff to the middle class. And that costs money. Before the 2008 crisis that led to the spending and revenues issues York describes, we had a structural imbalance approaching $200 billion per year, one that needed to be addressed. It still exists, with the other two factors layered on top (increased recession costs with reduced revenues, and $800 billion a year in Obama profligacy).
Not all revenues are created equal- increased income tax rates kill industriousness and entrepreneurship. Pigou taxes may actually offer some benefits if implemented properly.
But people like Grover Norquist even oppose ending ethanol subsidies, calling it a "tax increase". With friends like these....