"Americans face far more claims on their incomes than can be easily met"

Writing in Newsweek, columnist Robert Samuelson takes note that future economic policy is constrained by unsustainable promises of entitlement spending:

Start with government. It's overcommitted in the sense that it's made more promises than can be sensibly afforded. The largest of these involve retirement costs. As is well known, three programs for the elderly dominate the federal budget: Social Security, Medicare (health insurance) and Medicaid (nursing-home care for the elderly poor). These programs now represent more than two fifths of the $3 trillion budget, and as baby boomers retire, they could nearly double—measured as a share of the economy, gross domestic product (GDP)—in 2030. The tough questions are obvious. How much will we permit spending on retirees to raise taxes or crowd out the rest of government?

Health care compounds the difficulty. About three quarters of the projected increase in federal spending for the elderly involves Medicare and Medicaid. As a society, we haven't learned how to control health spending. Most Americans think that people should get all the medical care they need. Spending controls-for government and private insurance-haven't worked, because Americans don't want them to work. Health spending has gone from 5 percent of GDP in 1960 to 16 percent now and may hit 20 percent by 2015.

So if entitlement spending doubles from 2/5ths of the federal budget to 4/5ths, you're talking about a government that sends money to retirees with the last fifth going to interest on the national debt. America has always had the luxury of making promises based on the "next dollar earned" in a robust and productive economy. But when tax rates - which may have to rise 50% to cover retiree benefits - become an undue burden, it crushes incentive to work and depresses economic growth.