America: The unsustainable.

With all of the recent fuss over raising the debt ceiling, Americans are divided. Recently I have read on Mises.org that only 48% of Americans polled, are not in favor of raising the debt ceiling. Which means only 48% percent of us actually have at least some basic math skills.

Another poll I have also read recently, is that most Americans agree we need to cut debt, yet want no cuts to entitlements or other social programs. I guess the old expression of "waiting to have your cake and eat it too" applies to this. Entitlement spending, when combined, consumes more money than even our defense budget, which is our largest individual expense in the US. Sorry, but we can not have it both ways, it is simply not reasonable.

Here is something to chew on:

In 2012 over 100 million Americans will be over 50 years old. Considering the US population is around 310 million, that means just shy of 1 out of every 3 of our citizens will be rapidly approaching retirement age. Which means they will be drawing on Social Security and using medicare in as little as 12-15 years, if they are not already.

Also, every year another 3.5 million Americans reach the gold age of 50.

When Franklin D. Roosevelt, signed the Social Security Act in 1935, I am sure he had the best of intentions. However, with life expectancies being for men 59.9 and for women 63.9, the age to recieve benefits was (and still is) 65. So with a program that collects money from individuals while they work, then these people die before seeing this money, this program sounds extremely sustainable... :-D

We have come a long way since then with all these medical advances, health lifestyles, etc, people are living to be much older now days. According to the recent census, current life expectancy is at 78.2. In another report on US life expectancy from The Congressional Research Center, A person who reached age 60 in 2003 was expected to live an additional 22.2 years, on average, and would die at age 82.2. This means people are now spending 20-25% of their life time in retirement drawing on Social Security and Medicare!

Okay, so I don't seem like I am attacking our nations elderly, let me also mention another unsustainable bug-a-boo, welfare programs.


According to a report from The USDA, as of May 27, 2011 44,587,328 Americans are now receiving food stamps. This number is a new all time high for the program. Hell, this number is 13.1% higher than it was just one year ago! Remember, this means 1 out of every 6.9 Americans are receiving food stamps.

Mixed into this number is the fact that now 1 out of every 4 of American children are receiving food stamps. Also 1 out of every 3 African American receives food stamps. I don't mean this on any racist grounds. I mean it on the grounds that African American's make up 13% of the population. So if a third of them are receiving food benefits, that alone is around 4.3% of the population!

Let us now look at Medicaid, our government run health insurance for poor Americans. Medicaid was first created in 1965. During this time only about 1 out of every 50 Americans received Medicaid. Today over 51 million Americans recieve Medicaid. That is 1 out of every 6 Americans. This number is higher than the amount of Americans who receive food stamps. To me, this is worse, as we all know medical procedures are generally more costly than providing food like in the food stamp program.

Still not scary enough?

For the first time since the Great Depression, households are receiving more income from the government than they are paying the government in taxes. Government transfers of income to households started to overtake personal taxes in 2008, and it is growing. In 2010, households received $2.3 trillion in income support from unemployment benefits, Social Security, disability insurance, Medicare, Medicaid, veterans’ benefits, education assistance and other cash transfers of government funds to individuals. In this same year, households paid $2.2 trillion in income, payroll, and other taxes.


What all of this means is that our debt is simply unsustainable! A start would be to not raise the debt ceiling, so we can not borrow more to spend more. The bad thing is with this kind of spending, a vote to raise the debt limit will only come up again later if we don't raise the limit now and we cut some spending. The only real cure in my opinion, is to eventually phase out most, if not all entitlements. We must stop the unsustainable programs and spending now, so that we stop pawning off the debt on the next generation.