The politics of avoidance: America’s unsustainable entitlements budget

America’s budget problem boils down to a simple question: How much will we let programs for the elderly displace other government functions — national defense, education, transportation and many others — and raise taxes to levels that would, almost certainly, reduce economic growth? What’s depressing is that this question has been obvious for decades but our political leaders have consistently evaded it. This includes and indicts Democrats, Republicans, conservatives, liberals and every president since Jimmy Carter, particularly Bill Clinton and George W. Bush, who clearly understood the problem…

It’s scary. From 2006 to 2035, federal spending goes from 20 percent of GDP to almost 29 percent. Social Security, Medicare and Medicaid (including Obamacare) account for all the increase. The reasons: More elderly people and climbing health costs. In 2035, the 65-plus population will be 93 percent larger than in 2010. Paying for bigger government would require a tax increase of about 50 percent. If we want to avoid a tax increase — while honoring existing Social Security and health care benefits — we’d have to cut all other programs by about 80 percent. (And these figures are likely optimistic, because interest on government debt is assumed to remain low.)

The problem is not reducing the deficit. It is controlling spending in a way that seems socially just, economically sensible and politically tolerable. If we are honest — neither party has been — it means asking how much we allow benefits for the old to burden the young through higher taxes, lower public services, slower economic growth and weakened national security.