- Entitlements (excluding net interest) account for 56 percent of all federal spending and 14 percent of GDP--up from 10 percent of GDP three years ago.
- The three largest entitlements are Social Security, Medicare, and Medicaid. Their total cost is projected to leap from 8.4 percent of GDP in 2007 to 18.4 percent by 2050.
So what are our options? The Heritage Foundation has some options, but nobody is going to like what they hear:
- Increase taxes by $12,636 per household by 2050, and further thereafter;
- Eliminating every federal program except Social Security, Medicare, and Medicaid; or
- Increasing the national debt to unprecedented levels that could cause an economic collapse.
We continue to hear these Democrats insist that we can't cut spending, particularly on programs that target their voter base. Instead, Democrats maintain that simply raising taxes will be the solution to all of our budget woes ... "If we hadn't extended the Bush tax cuts, we would never be in this position. Blah blah blah." The Progs know this is moose squeeze ... but they also know it plays to their voter base, the wealth envy crowd. I will say it again, we do not have a revenue problem in this country, we have a spending problem. The Heritage Foundation can explain it a lot better than I can:
- Rising spending--not low revenues--is driving the long-term budget deficits. By 2020, spending is projected to be 6.2 percent of GDP above the historical average, while projected 2020 revenues are 0.2 percent of GDP above the historical average. Thus, the entire expanded budget deficit will be caused by rising spending, rather than by falling revenues--even if the 2001 and 2003 tax cuts are extended.
- Between 2008 and 2020, the cost of Social Security, Medicare, Medicaid, and net interest is projected to rise from 10.2 percent of GDP to 15.6 percent of GDP--making them responsible for nearly the entire rising budget deficit.
Something has got to change. Otherwise, it's time for luggage.