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You're (Not) Entitled
What was the substance of this debate? Essentially, there wasn't any. Recently I came across some disturbing statistics compiled by the Concord Coalition, a bipartisan Washington group dedicated to deficit reduction and entitlement reform. Under the title "Tweedledum and Tweedledee," the report showed that, under both the administration and congressional Republican plans, growth in outlays for Medicare, Medicaid, Welfare, Unemployment, Social Security and other entitlements wound up consuming virtually the same amount of the next generation's wealth.
It's easy to cut the deficit in the short run, but unless you seriously take on the issue of entitlements, any short-term savings are overwhelmed in the long term as the population ages and cost of health care soars. Specifically, whether Newt gets his way or Clinton gets his way or they split the difference, by the time today's 30-year-old reaches retirement age, about one-fifth of the U.S. economy will be made up simply of transfer payments - money taken from one pocket and put into another.
This kind of disconnection between economic reality and political rhetoric should make you mad - especially if you are in your 30s or 40s. The reason is that there is no way the next generation is ever going to accede to paying the kinds of taxes required to sustain today's entitlement programs through the next century. That means that after years and years of seeing your paycheck nicked for Social Security to finance other people's retirement, you may well find upon retirement that there's no money left in the till for you.
The cost and consequences of America's uncontrolled spending on entitlements is described in troubling detail in an important book being published this month. Written by Florida Trend Senior Editor Phillip Longman, it is titled "The Return of Thrift: How the Coming Collapse of the Middle Class Welfare State Will Reawaken Values in America" (The Free Press).
As the title makes clear, Longman's thesis is that the real problem for America is not the welfare mothers and other perennial scapegoats of the government's bloated budget. Welfare needs reform, but its cost pales next to the vast sums of federal funds transferred to the financially comfortable. In reading Longman's book, I couldn't help returning again and again to Pogo's observation, "We have met the enemy and he is us."
Longman's book delineates, in lucid and unambiguous terms, how the failure to reform entitlements poses an extreme threat to the American standard of living in the next century. It's not as if Washington doesn't know about the threat. "In 1995," Longman notes, "President Clinton's Entitlement Commission found that unless appropriate policy changes were made, outlays for entitlements and interest on the national debt will consume all tax revenues collected by the federal government within 17 years."
What may make some readers uncomfortable is that the book makes clearer than I've ever seen before the role of the middle class in America's debt crisis ? and the inescapable sacrifices that eventually must be made by all of us. "In 1990," the book says, "fully 75% of all direct outlays for federal entitlements went to families earning $20,000 or more annually. Even families earning $50,000 or more are major consumers of the welfare state."
Longman confronts what he calls "middle-class America's $2 billion-a-day addiction to entitlements." He explains why the cost of entitlements has grown out of control, and what middle-class Americans must do, "starting now," to prepare for the inevitable collapse of the middle-class welfare state.
