Our Impending Failure As A Nation « The Burning Platform

Our Impending Failure As A Nation

This is an interesting piece, but not because of the root numbers in it.

In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States.

Today, entitlement spending has swelled to nearly 70% of the annual federal budget.

Things are about to get a whole lot more complicated. The 20-year baby boom that took place after World War II is now beginning to result in a retiree boom.

For context, Druckenmiller points out that in 2030, the average age of an American citizen will be older than the average age of a resident of Florida today.

This demographic trend is going to create an entitlement spending catastrophe.

It doesn’t have to, and the root of it isn’t “entitlement spending”, in the main.

Let’s think this one through.

Social Security is funded by a “one in 8” tax, basically.  That is, about one dollar of every $8 you earn up to a given cap is confiscated before you ever see it.  You think it’s half that, but it’s not because the other half is paid “by your employer” and this fiction is maintained so you don’t revolt.

Cont....