Old Rocks
Diamond Member
I have never bought into the idea that Democrats are Socialists or that they want to be Socialists. However, their belief that government can do more for society than society can do for itself is leading to larger and larger government. At the same time, Republicans of late have been a part of this thinking as evidenced by the expansion of government under Bush. Now we see the Dems pushing for even more government involvement.
What we must now ask ourselves is how much do we want the governement to grow? Since the 1960's, federal government spending has totaled approximately 20% of GDP, give or take a few points up or down. All of a sudden, this spending is jumping to nearly 26% of GDP and may well be headed to 30%. To make matters worse, spending for SS, Medicare, and Medicaid has built in increases that cannot be changed without revamping those programs completely. At the current rate, government spending on these entitlement programs alone will increase government spending to 40% of GDP by around 2075. If we increase current spending from 20% to 30%, that would push government spending to over 50% by 2075, and this is with the assumption that we actually pay for some of this and don't continue borrowing to pay for it all.
Now, to make matters even worse, healthcare spending continues to rise. Currently, we spend nearly 17% of GDP on healthcare. However, there are estimates that at the current rate of growth, healthcare spending will increase to over 45% of GDP itself by 2080. Ezra Klein: Health Economics Archives
The bottom line is that we are faced with a situation where we must make some drastic changes. First of all, healthcare spending must be brought under control. Even if we control the spending, healthcare costs will still increase due to our aging population. The question is by how much do we allow that spending to increase. Secondly, borrowing by the federal government has to stop, as the cost to service that debt will begin growing exponentially if we don't. This means we will be facing higher taxation, whether we like it or not. There is no scenario in which we will be able to continue paying lower taxes over the long term. And the sooner we understand this, the less it will cost us in the long run.
The solution is to revamp SS, Medicare, and Medicaid, and to revamp our entire healthcare system where costs will be somewhat contained. Secondlly, discretionary spending must be cut where possible. Cuts in discretionary spending will be minimal as it's just not that big a part of the budget. Delaying payments for SS and Medicare until age 70 would be a big step in the right direction to help reduce some of the increases being faced for those programs. Last of all, taxes must be increased to the point that this can be paid for as we go, and so that the debt is eventually reduced as a percentage of GDP. That is the absolute most important part of the solution. If the debt continues to grow, the interest on that debt will eventually cost us more than all federal programs combined. In other words, it will bankrupt us.
I understand what you are saying. However, for someone in my line of work, going to seventy is an option of only a very few. There are jobs that are still intensively physical, that also require real technical skills. Industrial Millwrighting is one of those jobs. I will retire this year at the age of 66. I am still capable of doing the work, but I pay for it in pain at the end of every hard day now. Could I go another 4 years? Maybe, but why should I? A better solution is to leave the age of retirement where it is now, and put the 6.3% SS tax on all earned income.