It has nothing to do with paranoia, its the inevitable result of the way the entitlement laws are written combined with the demographics of the US. Its been happening for decades (essentially since the beginning of Social Security), and it will accelerate now that the baby boomers are retiring (until they die off, then it will reverse a bit, and start climbing again, probably at a slower rate, assuming the programs make it through this time intact).
The first big break in that trend will be when the nominal value in the Social Security trust fund equals $0. At that point payouts will be slashed according to current law. Maybe a 20 to 40 percent cut from one year to the next. Before that there will be a smaller break where the disability payments get slashed if current law is unchanged. The disability problem could hit as early as next year.
That only consides entitlements. The other problem is the huge debt, and interest on it. Interest rates are currently very low, but at some point its very likely that rates will go up. Even if they don't the interest on the debt will take a larger and larger percentage of federal spending.
Obama supporters like to talk about how much the deficits have gone down, but
1 - That's after record peace time deficits. And that's record as a percentage of the economy, not easy and almost meaningless records like nominal dollars which happen all the time. You might quibble about peace time with Iraq and Afghanistan, and anti-terror efforts elsewhere, but if its not peace we aren't in a major war. Subtract the spending related to Iraq and Afghanistan and you'd still have record deficits outside of the Civil War, WWI, and WWII all of which where massively larger for the US.
2 - The deficits are still large, and without budget changes will swing back up again. |
