Why are we in the mess we’re in? [update]
You don’t have to be a rocket scientist, brain surgeon, or even particularly smart to figure out that this trend means entitlements, as structured, will fail:
Last week, the Commerce Department announced that the gross domestic product shrank by 0.1 percent in the fourth quarter of 2012. And the Census Bureau reported that the U.S. birthrate in 2011 was 63.2 per 1,000 women ages 15 to 44, the lowest ever recorded.
Slow economic growth and low population growth threaten to undermine entitlement programs like Social Security and Medicare. Despite contrary rhetoric, they are programs in which working-age people pay for pensions and medical care for the elderly.
When Medicare was established in 1965 and when Social Security was vastly expanded in 1972, America was accustomed to the high birthrates of the post-World War II baby boom. It was widely assumed that the baby boom generation would soon produce a baby boom of its own.
Oops. The birthrate fell from the peak of 122.7 in 1957 to 68.8 in 1973 and hovered around that level until 2007. The baby boom, it turns out, was an exception to a general rule that people tend to have fewer babies as their societies become more affluent and urbanized.
So, when will our so-called “leaders” finally figure this out? My guess, in fact it really isn’t a guess, is they know but haven’t intestinal fortitude, politically speaking, to do what is necessary. That is cut them, privatize them or any of a host of other options they won’t even consider.
What they will consider, of course, is raising taxes and borrowing.
The fact of the matter is that both Social Security and Medicare are based in flawed models. The original models saw the base of the those paying into the system remaining constant, despite the “general rule that people tend to have fewer babies as their societies become more affluent and urbanized.”
The numbers don’t lie. Fewer and fewer workers are available to pay into these systems and continue to pay out at the rate at which they’re paying out now. This is no mystery. This is plain old everyday economics. It’s as plain as the nose on your face. Yet our so-called “leaders” seem unwilling and unable to face the facts. The facts are not going to change. We’re not going to suddenly have a baby boom again.
These are the sorts of problems elected leaders are supposed to face head-on. That’s why they’re elected, supposedly. Yet we continue to let our elected officials get away with malfeasance. So while it is easy to point at them and say they’ve failed, in fact we’ve failed. We have failed to gin up the courage to do what is necessary to fix these problems. To force our “leaders” to do the right thing. We continue to claim in poll after poll that entitlements must be fixed. Yet we continue to put in office, time after time, the same people who haven’t yet mustered the courage to do that (nor fund themselves held accountable for not doing it).
Whose fault is that?
UPDATE: Here’s a perfect and timely example of part of the point:
John Kasich, the fiercely conservative governor of Ohio, announced Monday that he’s going to expand Medicaid dramatically using federal money — a 180-degree turn from what conservative groups swore their allies in governors’ mansions would do when the Supreme Court gave them an out last year.
This makes John Kasich a big, fat liar.
Republicans should be the ones circulating recall petitions. He should be drummed out of office, out of politics and never again hold any office higher than dog catcher. But they won’t, because despite this, he’s “one of ours”.