Instead of a growing younger population and women entering the workforce in droves, labor force participation rates are declining.
The same CBO report projected that after 2017, “economic growth will diminish to a pace that is well below the average seen over the past several decades” as labor force growth slows due to the aging of the population.
At the same time as the economy is on shakier ground, welfare state obligations are exploding as baby boomers retire and health care costs grow.
In 2024, spending on Social Security, Medicare, Medicaid and the Obamacare health insurance exchange subsidies will absorb two-thirds of the $4.9 trillion in revenue the CBO expects the federal government to collect. Add in the rest of mandatory spending and interest payments on the debt, and 96 percent of tax revenues will already be spoken for before Congress allocates money to pay for defense, veteran’s benefits, education, transportation, the court system, international affairs and other budget items.