The government shutdown is over. It is back to business as usual – that is, the usual business of out-of-control government spending. As of this writing, the U.S. national debt is over $17 trillion which amounts to $53,764 per citizen, $148,756 per taxpayer (according to USDebtClock.org). The six largest federal budget items are, in order: (1) Medicare/Medicaid ($860 billion); (2) Social Security ($812 billion); (3) Defense/Wars ($607 billion); (4) income security ($349 billion); (5) net interest on the debt ($261 billion); and (6) federal pensions ($229 billion). These sums are astronomical, and signal financial crisis or national degeneracy or both.
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Economic historian Niall Ferguson has written a piece touching on this subject, titled, On Knowing What I and the CBO Know, in which he states that “spending on entitlements has continued to rise – and will rise inexorably in the coming years.” Ferguson has explained the reasons for this in previous books and publications. The baby boomer generation is now entering retirement. The percentage of persons over 65-years-of-age is growing steadily. This is creating an enormous entitlement crush. As Ferguson explained, “The question that matters is whether the CBO now thinks the fiscal position is going to improve or deteriorate in the future, relative to where we are today. And the answer … is that it is almost certainly going to deteriorate unless there is a significant increase in revenues or reduction in entitlement spending.”
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With regard to the roots of this crisis Ferguson has written a book titled The Great Degeneration: How Institutions and Economies Die which George Melloan praised in The Wall Street Journal as “A Jeremiad to Heed.” The prophet Jeremiah was right, after all, and so is Ferguson, says Melloan. Previously an optimist about the United States and its economy, Ferguson was sobered by the events of 2008. “The West is stagnating,” his book admits, “and not only in economic terms.” Ferguson asks why this is happening and who is doing it.
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Why has this happened? In brief, the state has grown into a cancer – a leveling monster that cannot be restrained. It cannot be restrained because it is the product of our own making. We are the authors of this profligacy; and I fear that in our present state of degeneracy we are more likely to join the party of plunder than rally to fiscal sanity. Who is bold enough to propose austerity at the present time? How many baby boomers, now retiring, would readily forego their Medicare and Social Security in order to save the federal budget?
Full article: High Debt, Low Integrity (JR Nyquist | Financial Sense Online)
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