The Entitlement State Is in Trouble? Let’s Hope So
Posted by Anthony Gregory on May 13, 2011
We have been told for years that any concern about the financial stability of Social Security or Medicare was completely misguided. It was irresponsible to talk about the need to tinker with, reform, or phase out these programs. They were on solid ground, the liberals have confidently assured us.
Yet lately, the government does not seem to agree. Recently, its projections have become less confident with every year. And now, as the LA Times reports:
“Medicare, which now provides health insurance to some 47 million elderly and disabled Americans, could begin running a deficit in 2024, five years earlier than projected last year.
“And Social Security, which last year began paying out more in benefits than it collected in taxes, now faces insolvency in 2036, compared to 2037 in last year’s projections.”
Such projections will become increasingly pessimistic, I predict, as the economy fails to grow under the burden of ever expanding government nearly the way the politicians and Keynesian economists all arrogantly assume it will. It turns out that aggrandizing deficit spending every year does not a healthy economy make. Within a decade, the fools in Washington will have to recommend another round of reforms to Social Security and Medicare which, I fear, will involve tax increases rather than the only sensible option—means-testing and otherwise slashing benefits.
The entitlement state for the elderly is worse than a Ponzi scheme, which at least relies on the victims voluntarily handing over their money and tends to collapse before too many lives are destroyed. Bernie Madoff was newsworthy because his scam was so far-reaching. But he is a piker compared to the Social Security administration. U.S. payroll taxes and the entitlement programs they finance constitute the greatest pyramid scam in the history of the planet. They are inter-generational plunder on a massive scale. The fact that left-liberals are so devoted to this nakedly regressive and socially destructive racket demonstrates that they, wittingly or not, are better shills for the power elite and its relatively wealthy beneficiaries than they are defenders of the poor and needy, most of whom are the greatest victims of America’s largest welfare state apparati.
In light of this reality, the unsustainable nature of the U.S. entitlement state is a blessing in disguise. At this point, I am loath to recommend reform proposals, although many would be humane and move us toward freedom at the same time. If we were interested in moderate reforms that would best serve everyone in need and get us on the road to liberty we would: (1) Let the young opt out entirely, and pay for current beneficiaries out of the general fund, as with any other welfare scheme, which is at least honest accounting; (2) Means-test benefits: no elderly people who don’t need Social Security or Medicare to live comfortably should get a single dime of it; it is indeed lamentable—in fact, criminal—that they were forced to pay for decades into this fraudulent system, but it is no less so that I have been forced to pay for wars I find morally objectionable. The answer to this is never to continue on the same path of looting from others to pay back those who have been robbed; (3) Recognize that if the retired do have an ethical claim to any money, it should not be procured through taxation, but rather through selling government assets; (4) Allow retirees to opt out of Social Security in exchange for not having to pay federal taxes.
Any humane and civilized reform to programs like Social Security and Medicare involves immediate, however gradual, cuts to the programs, a shrinking of government, and a move toward honest accounting.
But I say that I am reluctant to “save” these programs. This is because their inherently immoral foundations can never be papered over or altered through reform, and those who suggest methods of “saving” Social Security through private accounts often, whether they know it or not, propose reforms that would actually expand government for the short term and do nothing to absolutely guarantee that future politicians will see through with the phase-outs. Never trust a “free market” proposal that does not cut government until years have passed. Another problem: Many suggested years ago “privatizing” Social Security by having “individual private” accounts that the government would graciously allow, but only among its favored investment schemes. Had the Bush proposal to do just that passed, it would have likely meant young Americans’ accounts would have been tied up in the stock market—and perhaps in real estate securities. Could you imagine the bad name free markets would have gotten if these “private” Social Security accounts would have collapsed with the housing bubble in 2008? The cause of free markets would have taken a major hit, even though corporatism, not laissez faire, would have been the real culprit.
These programs are going to give way, one way or another. If they collapse dramatically, I’d much rather the blame fall right where it belongs: On the public sector. The left is proud of Social Security and Medicare. Let the liberals own the programs completely. They can enjoy all the credit for the supposed success of the entitlement state today. Let them own the blame when the inevitable collapse comes.
-
Guest
-
Rmt602
