While discussing our nation’s economic health before Congress on March 8, 2011, Erskine Bowles, co-chairman of President Obama’s National Commission on Fiscal Responsibility and Reform, said, “This debt and these deficits that we are incurring on an annual basis are like a cancer. And they are truly going to destroy this country from within unless we have the common sense to do something about it.”
Thirteen months later, our national cancer still is growing.
While there are many factors contributing to the rapidly declining economic health of our country, the largest contributors are our burgeoning federal retirement and health care entitlement programs.
Last Monday, the Social Security and Medicare boards of trustees released their annual reports for 2012. The reports paint a picture of an impending fiscal collapse when it comes to three of the major welfare programs Americans increasingly rely upon — Social Security, Medicare and disability.
According to the reports, the Disability Insurance Trust Fund will be exhausted in 2016; the Medicare Trust Fund (specifically, Medicare Part A, which covers hospital stays) will be exhausted in 2024; and the Social Security Trust Fund will be exhausted in 2033.
As if these dates are not imminent enough, the trustees warned the projections are overly optimistic because they are based upon unrealistic expectations of congressional action. And the trustees quantified the size of the cancer in dollars.
Social Security and Medicare currently have a combined unfunded liability (benefits promised minus payroll taxes and premiums collected) of more than $63 trillion. And once again, the trustees warned that this dollar figure probably is low because the calculation is based on the “highly uncertain” enactment of provisions within the Patient Protection and Affordable Care Act — commonly known as Obamacare.
A more realistic figure for the unfunded liability is $100 trillion.
At the heart of this erupting volcano of debt is an inescapable demographic reality. We are a graying nation. Today, and every day for the next 20 years, 10,000 Americans will reach the age of eligibility for Social Security and Medicare.
There’s the rub.
Combine 10,000 additional retirees per day with historically low birth rates and historically high life expectancy, and you have a nation that no longer can expect to fund entitlement programs for an exploding population of seniors by shifting the costs to a dwindling population of working-age citizens.
So, how do we stop this economic crisis?
As a conservative libertarian, I think the costs of health care and retirement should be borne by the individual with charities for those incapable of providing for themselves. As a realist, I know our current welfare state will not return to a nation of individual responsibility overnight.
However, that should not stop us from immediately beginning to make changes that can save us from certain ruin.
The most important change must begin with each of us.
As much as we all like to blame our elected representatives in Washington for the current dismal economic state of affairs, the reality is we have trained our representatives that they get rewarded — re-elected — by satisfying our every desire, want and whim. And, yes, we all want something from Washington.
We as a nation must change that paradigm.
We must stop demanding that the president and Congress increase the size and burden of government and start demanding that they expeditiously and dramatically reduce the size of the federal government by returning the well-being of our lives to the states, our local communities and us as individuals.
Bottom line: When it comes to Medicare, Social Security and disability, we quickly are running out of time to correct a looming disaster. It is long past time that we take responsibility and demand less of our federal government and thereby avert what rightly has been called “the most predictable economic crisis in history” by Bowles and others.