Entitlements

While there’s little disagreement that the nation is in severe financial trouble, there is a clear difference of opinion over the proper remedy. In broad generalizations the political left, generally Democratic, believes that the answer lies in more government money to create jobs and stimulate the economy. On the political right Republicans feel that the solution lies in more fiscal responsibility. The relative success of these approaches during the Great Depression may be only a coincidence. So for the sake of argument, or more accurately the lack of it, let’s go with the guys on the right for now.

OK. Balancing our books is our number one priority. That requires a combination of increasing income and reducing expenses. The Holy Grail of maintaining the Bush tax cuts, most conspicuously those for the richest two percent, would limit increased income, at least for the time being, requiring corresponding budget cuts.  If that’s where they want us to go, let’s not argue.

That means we must cut entitlements, a rubric that directly covers the obvious like national defense, the environment, safe food and water and agriculture.  In theory it covers every tax dollar spent. Whatever decisions government makes in a discretionary capacity are supposedly made for the benefit of the governed. There just aren’t federal bureaus to cover every situation.  

At the top of the budget balancers' hit list are Social Security and Medicare. Here I draw a line! There are entitlements and then there are entitlements. Federal money is allocated to most of them in amounts decided by our legislators in Congress. While Social Security and Medicare are entitlements, half of each is financed by the beneficiaries through money deducted from their payrolls for a specific purpose under specified terms. I include compensation for military service in this list.

Someone who has paid into the system for forty years and whose benefits are due now might be a bit put off to wake up and learn that the pension he or she was expecting next year had been postponed for four years or that paid for medical insurance no longer covers “this sort of thing.”

To allow these federally guaranteed systems to default on their promises would be a step in the direction of government defaulting on its bonds. Apart from that it would affect the most vulnerable among us.  A proper solution involves more than simply soaking the rich. But for a starter the very rich, some of whom are beneficiaries of our current dilemma, might quietly surrender a few more tax dollars off the top without threatening to shut down the nation’s business.

Will Rogers, in talking about the source of tax dollars said “just offhand I’d say that it’s coming from those that have got it.” For further information on the subject, see “Willie Sutton.”