Contemplating Singapore’s $7 billion bailout of CitiGroup — not to mention China’s recent buyout of 3Com — I ran across this report by the U.S. Treasury Department. Called “The Nation By the Numbers: A Citizens Guide,” the report is astonishing in its candor regarding America’s future.
Here is the good news: Socialized medicine, along with the welfare state, is dead — or, at least, it is on life support. This is because there is no way we are going to be able to pay for it. Indeed, it is very unlikely that we are even going to be able to pay for our current Medicaid and Social Security commitments.
Notes the Treasury report:
Simply said, holding revenues constant, required Medicare, Medicaid, and Social Security spending
and the related deficit financing costs will far exceed the Government’s ability to pay. Projections show that by 2070, total Government expenditures are projected to be 50 percent of GDP. … The spending for social insurance programs, in particular, is projected to grow at an alarming rate under current law. The precise amounts of the Government’s future social insurance responsibilities are far from certain, as they are based on complex calculations and many assumptions, e.g., age, life expectancy, and the cost of health care. However, the magnitude of the problem and the need for a solution are evident and could have a significant impact on the economy in the future unless action is taken in the near future.
The bad news is that America’s experiment with Fabian socialism — not to mention our descent into moral and fiscal philistinism — has wasted nearly all the political, social and economic capital that was left to us by previous generations of Americans. This news is made even worse because it seems unlikely that either lame-duck Bush or the Democrat Congress or any of the current crop of presidential candidates possess either the vision or the will to address these systemic problems.
If we are to begin to fix things, though, we need to admit we have a problem. To begin with, the money is gone. We are a nation of debtors. Warns the Treasury guide:
Under current policy, the confluence of these trends would cause the Government’s debt levels to more than triple by 2040 (well above even the WWII peak of 109 percent), to double again by 2060, and approach six times GDP levels by 2080. At some point before the debt reaches such unprecedented levels, the world’s financial markets would likely cease lending to the United States.
I don’t think we’ve reached this point yet. It’s at least 20 years off. I also don’t think it is inevitable that our economy is going to collapse. The reality, though, is that just as Moody’s warned that America’s credit rating is slipping, we are experiencing a transition from being an A+ superpower to becoming an A-/B+ superpower. That is going to happen over the next 20 years. This decline, however, is the result of choices that we have made in the past — and choices that our parents — the Baby Boomer Generation (the most selfish and narcissistic generation ever to rule America) — have made. What happens next is up to us: we can either begin the hard work of reforming our economy, reforming our culture and reforming ourselves; or we can continue to let things slip.
I am ashamed of our country, though. I am ashamed of all the good that we have wasted. I am ashamed that we are passing on a legacy of moral and economic insolvency to our children. Shame, though, is not a bad thing. Shame can make people change. It’s time we do.