In a new video parodying Dr. Seuss’s whimsical style, the American Enterprise Institute puts the problem of growing entitlement program spending in a form elementary school kids can understand.
It’s a good thing, too, because their generation will be burdened with paying for this skyrocketing spending if Congress and the President don’t start getting serious about structural entitlement program reforms now.
The video tells the tale of the “makers,” who were once “makering all kinds of neat things, Make-dads and Make-pads and mighty Make-dings.” Then the federal government stepped in, imposing an endless slew of taxes and cultivating an entitlement state. This developed into both a moral and fiscal problem, as it bred a culture of dependency and threatened to bankrupt their country.
America is a land of makers. Despite the current economic downturn, we have a history marked by prosperity, and today we enjoy widespread liberty and economic opportunity. Yet rising government spending, a sign of an expanding government, threatens that economic health and freedom. Specifically, spending on the entitlement programs—Medicare, Medicaid, and Social Security being the largest—is driving future deficits and debt to unsustainable levels.
Already, 62 percent of the federal budget goes to entitlement programs—double the amount 50 years ago. Entitlement program spending is projected to nearly double from 10.3 percent of the economy in 2010 to 19 percent in 2050. Such staggering figures are the result of millions of baby boomers beginning to retire and health care costs that keep rising. (continues below chart)
The number of workers paying for the benefits of retirees has also fallen, making Social Security and Medicare structurally unsustainable. For example, in 1965, the ratio of workers to Medicare beneficiaries was nearly five to one, meaning five workers were paying for the benefits of each retiree. In 2011, that ratio had fallen to three to one, and by 2030 there will be just two workers shouldering the responsibility for each beneficiary.
Government-centric Obamacare will only exacerbate the increasing health care costs in both the public and private sectors and send Medicaid spending upward. As the video suggests, this is a “fiscal nightmare.”
It is possible to structurally reform the entitlement programs in a way that ensures that they are a safety net for Americans who truly need them now—and for today’s children when they retire. Doing so requires political will on the part of Congress and the President to make tough choices now.
The Heritage Foundation has a plan that does just that. It gets our spending and debt under control and preserves the freedoms that allow America’s makers to keep “makering” and succeed.
