Two stories, one moral
To understand the need for entitlement reform, consider two stories with a single moral.
Story One: The 1984 Los Angeles Summer Olympics were heady, halcyon days, mainly because of all the free food everyone was getting at McDonald’s.
McDonald’s was running an Olympic-themed promotion offering free food based on how many medals the U.S. athletes won. Unfortunately for them, they set up that promotion before the Soviet Union decided to boycott the games that year, depriving American athletes of their most serious competition. Americans were winning everything in sight! All of those medals added up to a whole lot of complimentary Big Macs. America ate well while McDonald’s lost a fortune.
Story Two: In the first Austin Powers movie, Dr. Evil is frozen for three decades and unthawed in a world where his ransom of “one million dollars” is greeted with ridicule, due to inflation and such. He then adjusts his demands to “One hundred billion dollars.” Nice work if you can get it.
That figure becomes a problem in the second movie, though, when Dr. Evil returns back in time. But he fails to return to the 1960s-appropriate ransom figure. He asks the 1960s presidential cabinet for “One hundred billion dollars” or else he’ll blow up the moon. Once again, everyone bursts out laughing, because that amount of money simply doesn’t exist in the entire world.
Beware of idle promises cheaply made
And now the single moral:
The United States has made financial promises that are as silly as Dr. Evil’s moon ransom. Like McDonald’s, we have tied a huge chunk of our spending to forces outside our control. Congress does not decide how much money they’re going to spend on Social Security, Medicare, and Medicaid. These programs are driven by demographics, not decisions, and the demographic data is almost as disastrous as this forced alliteration.
Those are scary numbers. Well, here are some scarier numbers.
Last year, we spent $2.4 trillion in mandatory spending programs, and $1.2 trillion in discretionary spending. For those of you who are math challenged, that means we spent twice as much on programs that are McDonald’s gold medal money than on programs that the government can control. Those numbers are slated to grow to gargantuan sizes until they approach 100 percent of money collected in taxes.
Shut the government down, and you still still have a budget deficit
all of government. Abolish every cabinet department; wipe out the Occupational Safety and Health Administration and the Environmental Protection Administration, burn down the national parks, mothball the IRS and every other three-letter agency. After that, cut defense spending, too. Cut it as much as possible. Then cut it out altogether. Shut down the government completely.
You will still have a budget deficit.
That budget deficit will continue to grow with each passing year as the population ages and the demographics keep growing.
Sure, you can raise taxes, which will provide some additional revenue – but not nearly enough.
The power of math is undeniable that ‘entitlements’ need to be fixed
The Congressional Budget Office projects that, with current demographic trends, by 2038 there will not be enough money in the world to meet the financial obligations we will have. When your expenditures hit 100 billion in 1967 dollars, your civilization essentially collapses, regardless of the party of guy in the White House.
And what is Donald Trump doing about this? Absolutely nothing.
It doesn’t matter what your political stripes are. The math is undeniable. You can either demand that Washington take real action to reform these programs while they still can. Or you can threaten to blow up the moon and enjoy your Big Mac.