First it's unavoidable because of demographics.
Unavoidable is too strong of word even for "a very large increase", although such a very large increase is very likely, even it isn't really unavoidable.
In any case my point was about a vast increase. (Defining "vast" as beyond just "very large") not just a very large one. Such a vast increase is something that can, and I think should, be avoided even with the unfavorable demographics. I would say that the demographic factors (both the medium run issue of the baby boom, and the longer run issue of people living longer and having fewer children than in the past), mean that we can't afford to be as generous with these programs as we where in the past. There will be more recipients with less payers in to the system per recipient, so we have to pay each recipient less (at least than what the formula would increase the per person spending to, not necessarily less than each person receives now in nominal or even real terms.)
Having just the combination of Social Security, Medicare, and Medicaid, be noticeably more expensive than the entire amount of federal spending on everything is now (and thats by percentage of GDP, if you use real or nominal dollars the spending looks even crazier), while at the same time debt payments will grow, is pretty unsustainable. And we can't make it sustainable through getting out of Iraq and Afghanistan, more general military cuts, or knocking out corporate welfare. Eliminating all those expenses (meaning among other things have no military at all, and if you count VA payments as military, than also ceasing to provide VA medical care or other benefits) just isn't reducing spending enough. And that's before all the trillions that will be spent on Obamacare.
Taxing the rich won't make up the difference either. A large tax increase on everyone theoretically could, but only at great harm to the economy, which in turn reduces the long term amount of revenue the government gets.
Unless the economy grows in a sustained above normal rate, we simply have to not pay as much (as the current formula suggest we will, we will still pay more than we do today) to retirees. |
