This is something that most of us that live in the real world knew before the a majority of the population reelected Mr Obama. Our economic situation must change if we are to survive as a free nation.
What's so worry-some now is that the majority, although small that voted for 'more of the same', must believe there is no problem with our entitlement programs, all we really need is to be told by someone they will fix the problem and it will be fixed. All is well. Pay no more attention, we are a path to recovery.
It's really amazing how many people in this country believe that just by hoping the problems will be fixed, saying that are fixed or hoping they will go away if they are ignored is enough. After 4 years of this agenda, we are still facing the same problems only they are worse, and apparently, reelecting the person the made them worse is a good solution.
Are the millions of people that voted in this election cycle truly believe this or are they just ignorant, badly informed or plainly stupid.
Why is this approaching disaster so clear to me, and others, but lost completely to so many others? This is not that complicated. Spend more then you make will always cause systems to fail. It's no more complicated then falling down, it's a fact you will hit the ground.
The Coming Entitlements Cliff
Source: Merrill Matthews and Mark E. Litow, "The Coming Entitlements Cliff," Institute for Policy Innovation, October 30, 2012.
November 8, 2012
The fiscal cliff approaching at the end of this year pales in comparisons to the impending entitlements program cliff, say Merrill Matthews, a resident scholar with the Institute for Policy Innovation, and Mark E. Litow, a retired actuary and chairman of the Social Insurance Public Finance Section of the Society of Actuaries.
According to the U.S. Census Bureau, 108 million Americans live in households where at least one person participates in a means-tested program. The number has grown rapidly under the Obama administration.
•Medicaid has grown from 46.9 million to 56 million people.
•Disability beneficiaries increased from 7.5 million to 8.8 million.
•Food stamp recipients have grown from 32 million to 47 million Americans.
The budgetary challenges for these programs are enormous.
•For the 2012 fiscal year, the nation spent around $2.2 trillion of its $3.7 trillion budget on entitlement programs.
•The cost of entitlement programs plus the interest on debt is nearly equal to total federal revenue today.
•Everything the government does is on borrowed, or printed, money.
Who is going to pay for all these benefits?
•The $2.2 trillion expenditures for 120 million-plus entitled individuals translates to $18,000 per beneficiary.
•Moreover, an estimated 10,000 people are retiring every day. As the 77 million baby boomers transition from being taxpayers to net benefit recipients, the funding stream further diminishes.
•Sustaining this level of entitlement expenditure will only result in a reduction in work effort, reduced employment opportunities, and more people moving onto entitlements.
To solve this crisis, three things must happen.
•Entitlement spending must decrease: Benefits program must be reengineered into a real safety net, helping those who need it most without having to create economic incentives to remain on welfare.
•Policies that encourage economic growth must be implemented.
•Several programs must transition to prefunded personal accounts.
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