Tuesday, April 01, 2008

All of the United States wouldn't cover Medicare expenses

From Smart Money (HT: RCP) "Entitlement mentality is wrecking economy"

From welfare to food stamps to Medicare, Medicaid and Social Security, our country now marshals a massive network of trillion-dollar entitlement programs colloquially known as the "social safety net." Many Americans, including a few of those running for president, see these bureaucracies as defining achievements of a nation where "nobody is left behind."
Forget the fact that the entitlements, many of which began with the goal of providing "basic minimum benefits" have grown into a gargantuan burden costing over $1.5 trillion a year and careening toward total collapse. For example, payouts will begin to exceed the revenues into Social Security in just nine years and current estimates have the entire system going belly up in 2041.
Author Jonathan Hoenig notes that the shift to an all-entitlement government invites further taxation and regulation of the economy which flips American fiscal history on its head:

As I've written before, it is America's historical commitment to capitalism and individual rights that has differentiated our prosperous economy from the socialist basket cases of North Korea, China and communist Cuba. When economic freedom is protected, societies see vast increases in productivity that result in higher-quality, lower-cost products.
And here's a factoid I hadn't heard before:

Moral bankruptcy eventually leads to financial collapse as well, and the evidence is growing more obvious with each passing day. As noted in Barron's over the weekend, the future obligations of Medicare are now so staggering that liquidating all the residential real estate in the country - a sum of almost $12 trillion dollars - wouldn't even cover the costs.
I should have marked this one "too good to excerpt." Read the whole thing.

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