Last December, 1.3 million Americans received SSI disability payments for “mood disorders.” Yes, that’s right, more Americans than the entire population of San Diego received a monthly check from Uncle Sam to compensate for their suffering from such psychic maladies as sleep disturbance, appetite disturbance, decreased energy and feelings of guilt or worthlessness.
That may ruin your mood, but it’s the tip of a very large and menacing iceberg. In 1960, federal transfer payments totaled $24 billion in current dollars. By 2010, government transferred $2.2 trillion, a whopping 727 percent growth over the half-century, (inflation and population-adjusted). The annual bill for these entitlements today comes to almost $29,000 for an average family of four.
In 1940, near the end of the New Deal spending surge, entitlements had risen to consume one-third of government spending. Today it is two-thirds, with all other responsibilities of government, including protection from danger, consuming just one third of our resources.
It isn’t a matter of partisan conflict. While Democrats generally argue for more spending and Republicans for less (or at least a slower rate of growth), both parties have learned how to win votes by passing around other people’s money. Presidents Nixon, Ford and George W. Bush all oversaw huge expansions of the welfare state during their presidencies.
It wasn’t always this way. Americans at one time were regarded by themselves and others as proudly self-reliant. Yet they also supported a remarkable number of lodges, churches and volunteer civic associations dedicated to helping each other in times of need.
Now 75 years of entitlements have eroded our spirit of independence and made Americans hungry for even more. Politicians who make the slightest effort to slow down the spending train are asking for trouble. Ask Paul Ryan.
Ryan’s Medicare idea was to provide seniors with an annual sum to support health insurance costs, with the amount adjusted for need. But the proposal was too modest by far, excluding all beneficiaries 55 and older. Even though the desperately needed savings would be postponed, Ryan obviously thought the delay was necessary to make it politically palpable.
The reward for his effort was a loud outcry from the Left claiming he was trying to “end Medicare as we know it.” An infamous ad showed a Paul Ryan look-alike shoving a wheelchair bound grandmother over a cliff. So much for trying to be the adult in the room.
Yet it’s simple mathematics that “our nation is on an unsustainable fiscal path” as the bipartisan Simpson-Bowles commission blandly put it. Federal income covers only 60 percent of expenditures. The other 40 percent is passed off to future taxpayers -- you know, those little people in the pictures on our desks. But because of what we’re doing to them, our grandchildren will have even fewer resources to pay for their grandparents’ thoughtlessness. We have created a gigantic intergenerational Ponzi scheme with today’s takers the winners and the children, whom we supposedly love so much, the hapless victims.
What to do? The Obama administration hasn’t offered a single entitlement reform proposal. Instead, federal spending has ballooned to 27.1 percent of GDP (from 19.7 percent in 2007) and the federal debt has grown to a crushing $16 trillion. They took an admittedly bad situation and made it worse.
Their solution: Tax the rich. But “the rich” don’t have enough money, even if we took it all, to make a dent in the problem. Furthermore, higher income tax rates historically have failed to generate additional income. For example, from 1952 to 1979, the top income tax rate was 70 percent to 90 percent and income tax revenue was 7.8 percent of GDP. Yet the take was 8.1 percent of GDP from 1988 to 1990 when the rates maxed out at just 28 percent. The only way to substantially increase federal income is through policies which stimulate economic growth.
Another traditional American virtue was looking out for future generations, to ensure that “posterity” was even more blessed than we. History will judge us harshly if we continue to spend on ourselves money that we don’t have.
Do Americans have the moral fiber and will to change our ways and limit our expectations from government? We’ll soon find out.
East Valley resident Tom Patterson (firstname.lastname@example.org) is a retired physician and former state senator.