Reforming American Entitlements or: How to Douse a Burning Enterprise

 A new report by The Washington Times shows that Medicare will lack the sufficient funds to pay out full benefits by 2024.  And where Social Security was not expected to experience such an event until 2037, a slow economic recovery has shortened that forecast by a year to 2036.  Knowing well that these have been considered “doomsday” events for the two leviathan entitlement programs, the government will look to continue demanding that taxpayers fund them, and will just run them in “permanent” yearly deficits. 


Despite the fact that progressive politicians have often bucked the calls to reform these programs by presenting them as not only moral imperatives but as complex abstractions that can only be understood by experts, it should be clear to anyone who can balance a checkbook why they are unsustainable.  One expert named William G. Shipman condensed it very clearly.  He describes “an interesting paradox; as countries become more wealthy, their social security systems become more poor.  The oddity is driven by the casual relationship between increasing wealth- and increasing life expectancy along with decreasing birth rates- all wrapped up around pay-as-you-go financing.” 


The dire formula is painfully easy to solve:


(Decreasing number of contributors) + (Increasing number of collectors) =

Perpetually increasing burden upon taxpayers                                          


Yet despite being ever more unsustainable, the government has chosen to accept inevitable failure and simply run these programs in “permanent” deficits until the taxpayer fountain dries up.  But as shareholders financially backing the American venture, shouldn’t we do something to stop such nonsense?


Imagine for a moment that Medicare is not a government entitlement program, but a business.  Then imagine that the CEO of that business announces his intention to run his company in “permanent deficits.”  What would be the reaction?  Shareholders would largely jettison their stock, the CEO would be replaced by order of the remaining shareholders, and the business model would be amended to again become productive. 


Government programs enjoy no such adaptability.  We can’t just stop paying, immediately cast Obama and Geithner out of their positions, and revamp entitlement programs to become more successful.  So we must wait to hold elections.  And to ensure that those elections yield a proper result, we have to first convince the indoctrinated American people that we need to amend what is obviously broken. 


Yet election after election, this has proven to be a difficult task.  Progressives cling to these entitlement programs with profound ideological resolve.  Where our founders and modern conservatives view the government as a “necessary evil” whose influence must be limited to preserve individual liberty, progressives have come to view government a sort of “necessary benevolence;” a means for the productive to subsidize the unproductive via wealth redistribution.  And no deluge of logic or reason can dislodge some of them from this unmistakably socialistic position.


But sensible Americans need to act- and fast.  The Social Security and Medicare constructs are aflame, and adding more taxpayer revenue will only fuel the fire and make it that much more difficult to douse.  We must demand that our representatives restore our individual property rights and seek responsible alternatives to counter the undeniable fiscal burden of these entitlement programs, rather than allowing the left to continue positioning it as a moral debate that has been twisted into a crisis by a fear-mongering right.


The aforementioned William G. Shipman, among others, has presented sound and constitutionally prudent ideas to Congress.  He suggests that we can pay benefits for existing collectors and proximally collecting retirees while establishing a personal investment alternative to government administrated retirement programs.  In describing this course of action, he relates:


If [Americans] could acquire this freedom they also would have personal property rights over their accumulated wealth. They have no such rights to Social Security benefits. They also could bequeath some or all of their retirement assets. They cannot under Social Security… They would no longer be tethered to the government. They would no longer be subject to politicians’ preferences over when they can retire, how much they can get, how their spouses are treated, how much they’re going to pay, and all of the rules and regulations that have evolved to the point of being incomprehensible. They would be free.

Now that sounds like a plan our founders would agree to: limiting the government’s right to an individual’s property and allowing liberty and freedom of choice to shape the destiny of American citizens.  We cannot let our lamentable lapses into socialistic enterprise lead us to our ruination, but rather, we must re-imbue our nation with the ideals of its founding.  That is the only way we can reverse or reform these destructive redistributive platforms.

Including ObamaCare.


William Sullivan commonly contributes to American Thinker, and blogs at http://politicalpalaverblog.blogspot.com