Big government's gigantic shortfall

Third, there is no way to close the massive deficits without big cuts in existing government programs or stupendous tax increases. Suppose we decided to cover all future deficits by raising taxes. Taxes would rise in the 2020s by roughly 50 percent from the average 1970-2009 tax burden.

That’s the guts of it. At age 65, average Americans live for another 18 years. Government now subsidizes each of them an average of about $25,000 a year (almost $14,000 Social Security, $11,000 Medicare). We cannot sensibly afford all these subsidies without oppressive tax increases (see above), deep cuts in defense and other programs or immense budget deficits that someday might trigger another financial crisis. Bond buyers might balk at swallowing so much government debt. By the administration’s estimates, that publicly held debt (the accumulation of all annual deficits) balloons from $5.8 trillion in 2008 to $18.6 trillion in 2020.

Eligibility ages for both Social Security and Medicare should be gradually raised to 70, coupled with a requirement for people to buy into Medicare at 65. Wealthier retirees should receive lower Social Security benefits and pay more for Medicare. Programs that have outlived their usefulness need to be abolished: farm subsidies, for instance. Even with these cuts, future taxes would need to rise. Unless you’re confronting these issues — and Obama isn’t — you’re evading the central budget problems.