The author wrote a great book on the history of entitlements and how politicians have continually liberalized them for electoral advantage over the years. As stated in the article all growth in spending relative to GDP the past seven decades has been in entitlement spending. If you click on the link there's an excellent graph showing spending on entitlements, national defense and all other. The entitlement line goes vertical.
Why America Is Going Broke
Entitlements are driving deficits and debt. Absent reform, the problem will soon become a crisis.
The federal deficit is big and getting bigger. President Trump’s budget estimates a deficit of nearly $900 billion for 2018 and nearly $1 trillion (with total spending of $4.4 trillion) for 2019. Its balance sheet reveals that the public debt will reach $15.7 trillion by October. This works out to $48,081.61 for every man, woman and child in the U.S. That doesn’t count unfunded liabilities, reported by the Social Security and Medicare Trustees, that are four times the current public debt.
How did the federal government’s finances degenerate this far? It didn’t happen overnight. For seven decades, high tax rates and a growing economy have produced record revenue, but not enough to keep pace with Congress’s voracious appetite for spending. Since the end of World War II, federal tax revenue has grown 15% faster than national income—while federal spending has grown 50% faster.
While most Americans are aware of the budgetary importance of entitlements, the accompanying chart clarifies the magnitude of the problem. It shows the importance of entitlements in determining past and present budget trends, and where they will take us if Congress fails to reform them.
The chart shows federal spending relative to gross domestic product since World War II, broken into three categories. Entitlements are depicted in red. This includes Social Security, Medicare, Medicaid, disability insurance, food stamps and a host of other welfare programs. National defense is shown in blue. All other nondefense spending is in yellow. Interest on the public debt isn’t included. Because of currently low rates, interest payments amount to less than half what the government spends on all other nondefense programs.
As the chart makes clear, all—yes, all—of the increase in federal spending relative to GDP over the past seven decades is attributable to entitlement spending. Since the late 1940s, entitlement claims on the nation’s output of goods and services have risen from less than 4% to 14%. Surprising as it may seem, the share of GDP that is spent on national defense and nondefense discretionary programs combined is no higher today than it was seven decades ago.
The contrast between the long-term increase in entitlement spending and the long-term decline in defense spending reflects the profound transformation of the federal government’s priorities from providing for the nation’s defense to redistributing income. The Vietnam War, President Reagan’s defense buildup, and the Iraq and Afghanistan wars were costly, but the increase in defense spending in each case pales in comparison with the astonishing growth in entitlement spending.
If you’re seeking the reason for the federal government’s chronic budget deficits and crushing national debt, look no further than entitlement programs. Show the accompanying chart to your friends or acquaintances who continue to assert that defense spending is causing the budget deficit. Since the early 1970s, entitlements have been the federal budget’s largest spending category, the sole source of the federal budget’s growth relative to GDP, and the primary cause of chronic budget deficits.
Today, entitlement spending accounts for nearly two-thirds of federal spending. Defense spending still only accounts for about a sixth of the federal budget, even with recent increases. Defense spending could be doubled and it would still be only half what the federal government spends on entitlements. Significant reductions in the budget deficit can only be achieved by restraining the growth of entitlement spending.
History shows that such restraint is not possible without presidential leadership. Unfortunately, President Trump has failed to step up. His budget proposes to shave a mere 1% from entitlement spending that is growing at 6% a year. The president has ruled out any significant reform of Social Security and Medicare, the two largest entitlement programs. His budget shows that this year Social Security and Medicare expenditures will exceed the payroll taxes and premium payments dedicated to supporting them by $420 billion. Social Security and Medicare deficits will account for half this year’s total budget deficit.
The situation is no better at the other end of Pennsylvania Avenue. Democrats are getting domestic spending increases and Republicans are getting increases to the defense budget. Instead of offsetting higher spending with reductions elsewhere, Congress simply increased both defense and domestic spending in the recently enacted continuing resolution to fund the government. At the same time, by eliminating the need to vote on a debt ceiling this year and ruling out the reconciliation process for any budget bill, Congress signaled that it has no stomach for entitlement restraint.
The continuing resolution’s two-year spending binge has been rightly criticized as excessive. But the size of the increase in spending it authorizes should be kept in perspective. The Congressional Budget Office estimates that the resolution will add $174 billion in discretionary spending to the budget in 2019, the year of its maximum impact. At the same time, entitlement expenditures will automatically increase by about the same amount.
What about the future? Social Security and Medicare expenditures are accelerating now that baby boomers have begun to collect their government-financed retirement and health-care benefits. If left unchecked, these programs will push government spending to levels never seen during peacetime.
Financing this spending will require either record levels of taxation or debt. Economics teaches us that high tax rates reduce economic growth and living standards. History teaches us that high public debt aggravates economic volatility and makes a country’s financial system more prone to crisis. Congress can avoid these harmful outcomes only by taking action soon. Its first step should be to send the president’s budget proposal back with a request that he come up with a plan to rein in entitlement spending.
https://www.wsj.com/articles/why-ame...4875?mod=e2two
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