There is no way an economy that grows by 75% every 25 years can fund entitlement programs expanding by 500% or more over the same time period.
by Charles H. Smith, Of Two Minds:
One aspect of Peak Government is Peak Entitlements: the ability of the government to fund its social program promises out of current tax revenues. Recall that Federal entitlement programs–Social Security, Medicare and Medicaid, to mention the largest–are all “pay as you go,” meaning they are funded out of current tax revenues.
The Social Security and Medicare “trust funds” are politically useful illusions: as the securities within the so-called trust funds are non-marketable, the government funds shortfalls in these programs the same way it funds all its other deficit spending, by selling Treasury bonds.
As the charts in Have We Reached Peak Government? show, government spending has soared to levels that no longer reflect the growth of the real economy. Government spending has risen by 300% or more since 1990, while the economy has grown by 75% in that time.
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