Can’t argue with the numbers

Well, maybe you can, but if Brian Riedl’s analysis “Entitlement-Driven Long-Term Budget Substantially Worse Than Previously Projected” is packed with graphs, tables, and figures to demonstrate that the burden of Medicare and Social Security will swallow whole the federal government over the next half-century. From the executive summary:

More realistic assump­tions show that Social Security, Medicare, and Medic­aid costs will leap from 8.4 percent of GDP to 18.9 percent of GDP by 2050. Unless lawmakers reform these programs, they will have to fund their costs by:

Raising taxes every year until federal taxes are 57 percent ($11,000 per house­hold, adjusted into today’s economy) above the current levels;

Eventually eliminating every other federal program, including spending on defense, edu­cation, anti-poverty programs, and veterans benefits, by 2045; or

Running massive budget deficits (the status quo option). This is the most expensive option because it would cause the federal debt to increase from the current level of 40 percent of GDP to 500 percent of GDP. Beginning in 2025, just a small interest rate response would push federal spending to 44 percent of GDP by 2040 and 73 percent by 2050—levels twice as high as previous projections.

In one graph titled “The Spending Cut Option” (scroll halfway down) Riedl shows that without tax increases or additional deficit spending, the “big three” entitlement programs will take up 100% of government spending. I’ve tried to make this clear for Democrats who oppose entitlement reform: if they value the idea that the government should play an active role in governing, it will be impossible when discretionary spending drops to zero. Without European-size tax rates, the U.S. government will slowly morph into a way station for tax dollars, transferred from younger workers to senior citizens. (Hat tip: Conspiracy to Keep you Poor and Stupid)