Thursday, June 13, 2013
The Entitlement Deficit
People look at the budget deficit as more or less "solved" by the recent budget sequester and tax hikes, but the truth of the matter is that we have a nearly insurmountable structural deficit in entitlement spending. This recent article captures the scope of that deficit... roughly 100 trillion dollars over the next thirty years. That is an unfathomably high number.
Republicans, after a decade of lavish spending when they had their turn at the helm, have finally painted themselves into a corner of permanent minority status. Their shift back to a financially tenable position as just come too late. Democrats are loathe to take the needed steps on the third rail of American politics, seemingly covering their eyes and ears in public about the looming debt. So does a path exist that could return America to long term fiscal solvency?
In the late 1990's, republicans and democrats came together under the Contract for America to enact welfare reform, the first major reduction in entitlement spending in a generation. The benefits were almost immediately tangible, with millions of capable people going back to work and off the welfare roles, and the first government surplus in over a generation. I'd identify that as the last time we saw a victory for fiscally responsible policy... and it could be a template again for responsible government.