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This media outlet didn’t have a lot of nice things to say about former South Carolina governor Nikki Haley during her 2024 presidential campaign – but one issue she consistently got right (and former president Donald Trump continues to get wrong) revolves around federal entitlements.
For those of you unfamiliar with the term, “entitlements” are defined by the U.S. Government Accountability Office (GAO) as “income redistribution programs intended to address problems such as illness and poverty.” These programs – enacted by the federal government over the course of the past century – are financed either from federal trust funds or through the federal budget.
Soon, though, both will be financed by federal debt …
The top two entitlement programs? Medicare and Social Security – both of which are spiraling into scarcely calculable, utterly unsustainable levels of deficit spending. Simply put: America will drown under this tidal wave of red ink unless something changes soon – and changes drastically.
During the 2024 campaign, Haley was the only candidate speaking some semblance of truth on this issue – which, in turn, forced other candidates to at least acknowledge the grim realities staring us all in the face. Did I trust Haley to actually follow through on her rhetoric and propose meaningful, lasting reform of entitlement spending? Of course not.
That, fundamentally, was Haley’s ultimate problem. No one trusted her.
(Click to View)
But to her credit, she sounded an alarm on this issue which the two major party nominees-in-waiting continue to ignore … despite the gathering of darkening, increasingly ominous storm clouds on the horizon.
According to the latest Financial Report of the United States Government (.pdf) – released just last month by the U.S. Treasury – the federal government ran a deficit of $1.7 trillion in the fiscal year which ended last September. That’s on top of the $1.38 trillion deficit the government ran the previous fiscal year. Add it all up and the national debt currently stands at a staggering $34.5 trillion – and counting.
We know these numbers. We’ve heard them before. Over the years, the math underpinning them has become so impossibly big – so incalculably unknowable – we have decided to just tune it out. Turn it off. Surrender to numbness as it relates to these depressing facts and figures. Rather than confronting a hard reality – and demanding change – we have reduced ourselves to ostriches, burying our heads in the sand as we doom scroll the accompanying societal collapse on our Matrix-monitored mobile devices.
“Americans are asleep,” one of my progressive friends told me recently.
On that point, we are in violent agreement.
America is asleep … and when it comes to entitlements neither Trump nor incumbent president Joe Biden has any intention of waking anyone up.
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Of course, the numbers referenced above are merely the current manifestation of the problem. They don’t come close to telling the full story of the coming crisis.
According to the Treasury report, an estimated $215.7 trillion will be spent over the next 75 years on Social Security and Medicare payouts. The problem? That number is $78.3 trillion more than the trust funds are scheduled to collect.
Where is that money (officially defined by the government as an “unfunded obligation”) coming from?
“According to the (Treasury) report, it can only be generated through increased borrowing, higher taxes, reduced benefits, or some combination of these,” wrote Adam Andrzejewski for Open The Books. “All options are politically toxic, which is why Congress is hiding, hoping the problem will go away. And why no one in Washington D.C. wants to talk about the (Treasury) report.”
Indeed, no one has substantively addressed entitlements in American politics in more than forty years … which is why we find ourselves in the current situation.
Of course, Andrzejewski points out the jaw-dropping $78.3 trillion projection “underestimates just how much extra cash is needed” to keep these two programs afloat.
“A child born today will pay massive taxes into Medicare and Social Security over the next 75 years,” he noted. “But the government will not have to send that person benefit checks until they are 62 years old, meaning the majority of payouts will occur more than 75 years from now.”
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According to the Treasury, current enrollees are in line to receive $105.4 trillion more than they put into the programs via taxes – while future participants are projected to receive $69.9 trillion more than they contribute. Combined, this “infinite horizon” gap totals a staggering $175.3 trillion – and like our debt, deficits and unfunded liabilities, it is getting bigger by the day.
Andrzejewski refers to this ticking time bomb as America’s “Doomsday Clock.” He calls our current crop of leaders “paralyzed” and laments there is “no clear path forward.” He also points out that the looming liabilities of these two entitlement programs outstrip the gross domestic product of “every planet on earth” – to say nothing of approaching every dollar our government has spent (on everything) since its founding in 1787, even adjusting for inflation.
These issues are foundational to the future of the American Republic, yet neither major party presidential candidate – nor anyone in Washington, D.C. – is even talking about them, let alone doing anything about them.
If anything, they are encouraging us to dig our fiscal hole deeper – and dig our heads deeper into the doomscrolling sand.
“Say what you will about Haley (and I’ve said plenty), but she gets points in my book for substantively raising this critical issue … and at least being open to reading the writing on the wall as it relates to the future of these two programs,” I wrote a year ago.
Trump and Biden? They and the rest of the uniparty establishment in our nation’s capital are hoping to get reelected by ignoring the problem and promising to sustain entitlement benefits in perpetuity … no matter the cost.
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ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina and before that he was a bass guitarist and dive bar bouncer. He lives in the Midlands region of the state with his wife and seven (soon to be eight) children.
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5 comments
Thank you for the argument for higher taxes fur corporations and the wealthiest Americans.
Biden is already on it.
Even if that argument come from a guy who takes loans from the taxpayers , he will never pay back, and the all the taxpayer handouts that come with having 7 kids on a bloggers budget.
You can never accuse Welfare Will Folks of having any self-awareness, that’s for sure ;-)
Higher taxes are only toxic to MAGA Republicans. Why? Because they are too stupid to understand, that Trump and the other Republicans want to cut Social Security, Medicare, and Medicaid (programs that benefit middle-income America) to pay for tax cuts for giant corporations and very rich people. The Trump Tax cuts went 90% to the richest 5% of Americans. The remaining 95% of us divided up 10% of those tax cuts. The Trump Tax cuts did not pay for themselves (they never do at the historically low tax rates we have now. i.e. we are nowhere near the bend in the Laffer curve), and if they are extended they will reduce federal revenue by trillions. It’s time to admit those cuts were a costly mistake, that added hundreds of billions to the federal deficit. You don’t need to give corporations tax cuts at a time when they are already making record profits.
Republicans say, if we increase corporate taxes they will pass it on to the consumer by higher prices. I call BS on that. That is not how microeconomics works. Companies charge what the market will bear for their goods and services regardless of their operating cost. If the market will not pay enough for them to make a profit they go out of business. When Trump cut Corporate taxes they did not cut the cost of their goods and services to the public, so why would they need to increase them if those cuts go away? The answer is they won’t because they are already charging as much as they think they can get and they are making more profits than ever.
“He also points out that the looming liabilities of these two entitlement programs outstrip the gross domestic product of “every planet on earth”
This is a disturbing report on an obvious challenge. National leaders continue to “kick the can down the road” by leaving the problem for future elected officials. I included the above quote to note the need for editing. The earth is our planet. I suspect the writer intended to use “country” instead of planet.
DWB
Tax the billionaires and multi-millionaires and make them pay what the middle class and working poor do. But suppose, for a second, the GOP continues down this path of madness. We know that “trickle down” doesn’t work. In fact, you can chart the rise of the ultra-wealthy and the freefall of salary increases and retirement savings for the middle class from the Reaganomics era to now. Furthermore, does the GOP truly think that they won’t face angry mobs if they pull retirement and social security from those who’ll be retiring in the next 5-10 years? The median 401K balance for those currently 55-65 is just $89K. That’ll last a year, maybe too if they’re frugal in retirement. Then what? How will these people survive? Oh, right, the GOP doesn’t care about living, breathing human beings, or what happens to them. So please, do carry on with this nonsense about “entitlements”. Here’s your solution: tax the rich-problem solved. You’re welcome.
In a recent interview with CNBC Donald Trump was asked how he would handle entitlement spending “on Social Security, Medicare, and Medicaid” as president, he responded.
“So, first of all, there is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements. Tremendous bad management of entitlements. There’s tremendous amounts of things and numbers of things you can do. So I don’t necessarily agree with the statement. I know that they’re going to end up weakening Social Security, because the country is weak.”
He continued: “I mean, take a look at outside of the stock market—we’re going through hell. People are going through hell. They have—I believe that number is 50 percent. They say 32 and 33 percent. I believe we have a cumulative inflation of over 50 percent. That means people are, you know, they have to make more than 50 percent more over a fairly short period of time to stay up. They’ve gotten routed. The middle class in our country has been routed. And the middle class largely built our country. And they’ve been treated very, very badly with policy.”
Can we at least agree he is either in cognitive decline or stupid?