15 March 2014

More On Where Our Money Is Going (And What Can't Be Done About It)

I've posted here and here about the problems of America's national program of welfare for seniors Social Security. In short, folks are getting more than they paid in (plus the rate of return on the investment of Social Security contributions in U.S. debt instruments) and the number of contributors (i.,e., young people) is falling as a relative portion of the American population. The combination of these trends is looming disaster.

Can the federal government divert funds from another portion of its budget to make up the shortfall? In even shorter: No. Go here to look at a short (1:40) YouTube video put together by The Economist that shows how the relative portions of the federal budget have changed since 1960. Defense has fallen and social programs (Social Security, Medicare, and Medicaid) have vastly expanded. Discretionary spending is small and interest--at least for now--is also small.

The Economist doesn't venture any suggestions but cutting benefits, increasing the payroll tax, and having more babies seem like good places to start.

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