Bankrupt: Entitlements and the Federal Budget
Cato Sponsor e-Briefing
Wednesday, March 2, 2011
Noon - 1 PM EST
Featuring a presentation and discussion with Cato Senior Fellow Michael Tanner; moderated by Caleb O. Brown, Director of Multimedia.
Click to read the final draft of Michael Tanner's new Policy Analysis: Bankrupt: Entitlements and the Federal Budget.
The U.S. government is about to exceed its statutory debt limit of $14.3 trillion. But that actually underestimates the size of fiscal time bomb that this country is facing. Factor in the unfunded liabilities of programs such as Medicare and Social Security and the true national debt could run as high as $127.5 trillion.
But debt is the symptom rather than disease. The problem is not that taxes are too low, but that government is too big. Without a change to current policies, by 2050 federal government spending will exceed 42 percent of GDP. When you include state and local spending, government would be consuming nearly 60% of everything produced in this country. Whether financed through debt or taxes, government that large would represent a crushing burden to our economy and our liberties.
Driving this massive increase in the size and cost of government are so-called "entitlement programs," in particular Social Security, Medicare, and Medicaid. It may well be "politically convenient" to continue ducking entitlement reform. But doing so will condemn our children and our grandchildren to a world of mounting debt and higher taxes.