Despite all the talk of “austerity,” little has been done to stem the tide of the United States’ ever growing debt. The little that has been cut is in area that needs it most: defense. The Budget Control Act’s sequestration hits defense disproportionately and essentially ignores entitlement spending, the leading driver of U.S. debt. President Obama has warned that he would “veto any effort to get rid of those automatic spending cuts.” This stance is irresponsible and unwise for several reasons. First, in an increasingly dangerous world with a rising … More
No Comments »
“Provide for common defense” is a core constitutional obligation of the federal government. Yet entitlement spending is putting unsustainable pressure on the defense budget. In 1965, Medicare, Medicaid, and Social Security constituted 2.5 percent of gross domestic product (GDP) while defense made up 7.4 percent. The Office of Management and Budget estimates that entitlement spending will reach 9.7 percent of GDP in 2012 while defense will shrink to 4.5 percent—even after the wars in Iraq and Afghanistan are included. (article continued below chart) The defense budget is further threatened from … More
No Comments »
By Jagadeesh Gokhale
I was recently asked the following: You gotta figure: States defaulting on pension obligations through bankruptcy and/or action by legislatures. Some de facto defaults will likely be to promise payment at age 90 or whatever. National governments, including the US, also likely defaulting on everything, gov’t bonds and so-called “entitlements.” So, pensioners, city, state and [...]
Dealing with Fiscal Challenges is a post from Cato @ Liberty – Cato Institute Blog
No Comments »
By Jagadeesh Gokhale
One of the first things I did upon joining Cato in 2004 was to develop a Social Security benefit calculator. That work would later contribute to my book on the outcomes of different Social Security reform proposals. The Social Security Administration used to have a benefit calculator on its website, but it was cumbersome to use. Now [...]
Social Security ‘Calculator’ is a post from Cato @ Liberty – Cato Institute Blog
No Comments »
Her name is “Julia,” and if you haven’t seen her, she’s a colorful cartoon character invented by the Obama campaign to help spread the message of how women will “benefit” under the president’s policies. What it shows instead, though, is the president’s vision of America — that individuals need the federal government at each stage of their life, and that he deserves credit for making our lives even better. In Julia’s story, as depicted in a cartoon slideshow, a faceless young American woman grows from birth to old age with … More
No Comments »
President Obama has called Rep. Paul Ryan’s budget “an attempt to impose a radical vision on our country,” but as this week’s chart illustrates, if something radical doesn’t happen, entitlement spending will nearly double by 2050. The amount of spending on Medicare, Medicaid, Social Security and Obamacare subsidies will soar over the next 38 years, leaving future generations with an alarming debt burden. Congressional Budget Office predictions show that in 2010 entitlement spending attributes 10.3 percent of GDP, then jumps to 19 percent of GDP by 2050. David John, Heritage’s … More
No Comments »
By Michael F. Cannon
(This blog post first appeared at Cato@Liberty following the release of the 2006 Medicare and Social Security trustees’ reports. I repost it, with updated links and “exhaustion dates” because sadly nothing else has changed.) Sometimes, Governments Lie Year after year, federal officials speak of the Social Security and Medicare trust funds as if they were [...]
Sometimes, Governments Lie (6th Anniversary Ed.) is a post from Cato @ Liberty – Cato Institute Blog
No Comments »
By Marian L. Tupy
In his 2005 open letter to Karl Rove, Ed Crane defended Cato’s proposal for private retirement accounts thus: “You want to get people excited about personal accounts? Tell them about the 1960 Supreme Court case, Flemming v. Nestor, which explicitly says Americans have no ownership rights to the money they pay into Social Security. It [...]
Dignity in Retirement is a post from Cato @ Liberty – Cato Institute Blog
No Comments »
By Michael D. Tanner
Paul Krugman is the latest to suggest that advocates of personal Social Security accounts are guilty of hypocrisy in criticizing the constitutionality of Obamacare’s individual insurance mandate. After all, they contend, are not personal account supporters arguing in favor of a federal government mandate that individuals purchase a specific commercial product (i.e., stocks, bonds, mutual funds, [...]
Are Individual Mandate Critics Showing ‘Bad Faith’? is a post from Cato @ Liberty – Cato Institute Blog
No Comments »
Dark clouds hover over the nation’s finances and threaten a perfect storm of massive debt and crushing taxation unless Congress starts acting—soon. Washington must demonstrate that it is serious about reining in ever-rising spending and reducing annual deficits. Passing commonsense reforms to our major entitlement programs (Medicare, Medicaid, and Social Security), the main drivers of future spending and annual deficits, is crucial. As the population ages and health care costs rise, spending on entitlements is projected to more than double by 2050, as this Heritage Budget Chart Book chart shows. … More
No Comments »