09.13.2012 0

Federal Debt: Urgent To Unsustainable To Insane

NRD Editor’s Note: This column originally appeared at Investor’s Business Daily.

By Howard Rich — We are no longer looking at an exercise in unsustainability — what we are witnessing is pure insanity.

“Future spending on these programs will skyrocket far beyond current revenues,” writes Daniel J. Mitchell of the Cato Institute, noting that our nation will soon face Europe’s fate “if government policy is left on autopilot.”

In fact, this is already happening. In the most recent fiscal year Medicare paid out $564 billion in benefits — but only took in $274 billion in taxes and premiums. That’s a shortfall of $290 billion.

Social Security is also currently paying out more than it is taking in — with its annual deficit projected to reach $623 billion over the next two decades. Driving this escalation is the fact that the program’s ratio of workers-to-beneficiaries is set to drop from 2.8 to 1.9 by 2035 as the number of Americans collecting checks soars from 56 million to 91 million.

“It is time for Congress to take on the task of retooling Social Security for the long haul,” SSA Commissioner Michael Astrue said earlier this year.

Wrong. Government’s entitlement programs don’t need to be “retooled,” they need to be either privatized (like Medicare and Social Security) or eliminated altogether (like ObamaCare and the 2003 prescription drug benefit). And these reforms don’t need to happen this year — our entitlement mess should have been addressed decades ago.

“Urgent doesn’t begin to describe it,” Social Security Trustee Chuck Blahous said recently. “We’re somewhere between critical and too late to deal with it.”

Indeed. Which is why continuing to delay the inevitable — i.e. the “bipartisan solution” — only adds additional destructive force to the fiscal reckoning that’s coming.

Howard Rich is chairman of Americans for Limited Government.

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