Amerika

The budget bomb that will bankrupt the USA

Not many pundits are still reporting on the budget because democracies have the attention span of a gnat. Like that leaking pipe in the basement that you remember sometimes when you wake up in the middle of the night, the budget issue will not go away and the problem will get worse until we do something about it.

This condition of America ignoring the budget will continue because of the parameters of democracy. People do not like to hear that the most popular programs are the least realistic and the most expensive, and thus have to be cut. They also do not like to hear about us abandoning prior promises.

Among the paid, corporate-financed and populist shills on television, the left likes to scream for defense cuts and the right likes to ask for cuts in “entitlements.” Both of these are shaky categories because there’s a huge amount of overlap.

Here’s a budget overview, courtesy of US Government Spending:

As numerous analyses have shown, the largest single area of gain is that which government spends on its own citizens, which has risen from nearly zero in the 1950s to over half the budget today.

Within that lurks a gigantic time bomb. Government is our nation’s biggest employer and pays up to a third more than comparable private positions. All of these people will have pensions that pay most of their current salaries. They may retain health care benefits as well. What is certain is that with people living longer, and the number of government employees having at least doubled since the 1950s, the pension part of our budget — currently about a quarter — is a giant time bomb waiting to detonate. We will pay more per person, for longer, to more people than ever before.

Health care and the welfare state will also rocket upward. In my experience, the fastest way to make any service cost more is to regulate it because you add a whole layer of employees who do nothing but bureaucracy conformance. They are responsible to laws, and not results, and so everything bogs down. The result is an illusion of control but a higher cost. Healthcare will be expensive however we do it, but when you hire 25 administrators per doctor, the cost is higher than even the free market would bear.

Welfare is a “black budget” item, it seems:

The U.S. does not have a significantly smaller welfare state than the European nations. We’re just better at hiding it. The Europeans provide welfare provisions through direct government payments. We do it through the back door via tax breaks.

…The Organization for Economic Cooperation and Development recently calculated how much each affluent country spends on social programs. When you include both direct spending and tax expenditures, the U.S. has one of the biggest welfare states in the world. We rank behind Sweden and ahead of Italy, Austria, the Netherlands, Denmark, Finland and Canada. Social spending in the U.S. is far above the organization’s average.

…Government controls more and more of the economy. It just does it by getting people to do what it wants by manipulating the tax code. Politicians get to take credit for addressing problem after problem, but none of their efforts show up as unpopular spending. – “America is Europe,” by David Brooks, The New York Times

There are other stealth items on the budget, mainly the overall government initiatives that get farmed out to each part of government. Affirmative action and gender re-balancing take their cut, everywhere from the military to academic research staffs. Global warming compliance will be another such boondoggle. It will be found to be completely ineffective in another dozen years, but in the meantime, it’s a great employer for those who can’t or won’t find work outside of government. I wonder how many diversity officers our government hires as a whole?

Check out the summary of our budget. Thanks to leftist citizen-benefit programs, we have created a series of programs that can never be removed without appearing to dispossess someone. They in turn require vast layers of bureaucrats. Those in turn pass the cost on to us. It’s a steal method of wealth redistribution, using government as a “shadow economy” to replace the actual one.

The end result is that we spend more and get less, and that we have stopped rewarding industrious productivity and replaced it with rewards for conformity to regulations and bureaucracy. This calcification is the sign of a dying concern. It no longer responds to reality; it creates its own reality, and as long as the money flow (or rather, continual borrowing) keeps up, it will live in this little cocoon and assume it’s doing just great.

It’s bad now, but wait until the pension bomb comes due. And then the healthcare bomb. Our politicians clearly have no incentive to fix this problem. However, we’ll be the ones who pay for their mistake.

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