Since we’re already depressed by the enactment of Obamacare, we may as well wallow in misery by looking at some long-term budget numbers. The chart below, which is based on the Congressional Budget Office’s long-run estimates, shows that federal government spending will climb to 45 percent of GDP if we believe CBO’s more optimistic “baseline” estimate. If we prefer the less optimistic “alternative” estimate, the burden of federal government spending will climb to 67 percent of economic output. These dismal numbers are driven by two factors, an aging population and entitlement programs such as Medicare, Medicaid, and Social Security. For all intents and purposes, America is on a path to become a European-style welfare state.
If these numbers don’t depress you enough, here are a couple of additional observations to push you over the edge. These CBO estimates were produced last year, so they don’t count the cost of Obamacare. And as Michael Cannon repeatedly has observed, Obamacare will cost much more than the official estimates concocted by CBO. And speaking of estimates, the long-run numbers in the chart are almost certainly too optimistic since CBO’s methodology naively assumes that a rising burden of government will have no negative impact on the economy’s growth rate. Last but not least, the data above only measures federal spending. State and local government budgets will consume at least another 15 percent of GDP, so even using the optimistic baseline, total government spending will be about 60 percent of GDP, higher than every European nation, including France, Greece, and Sweden. And if we add state and local spending on top of the “alternative” baseline, then we’re in uncharted territory where perhaps Cuba and North Korea would be the most appropriate analogies.
So what do we do? There’s no sure-fire solution. Congressman Paul Ryan has a reform plan to reduce long-run federal spending to less than 20 percent of GDP. This “Roadmap” plan is excellent, though it is marred by the inclusion of a value-added tax. Bill Shipman of CarriageOaks Partners put forth a very interesting proposal in a Washington Times column to make the federal government rely on states for tax revenue. And I’ve been an avid proponent of tax competition as a strategy to curtail the greed of the political class since it is difficult to finance redistribution if labor and capital can escape to jurisdictions with better tax law. Any other suggestions?
[...] about 25 percent of GDP, but the really bad news is that the burden of federal spending is projected to rise to at least 45 percent of GDP in coming decades because of an aging population and programs such as Medicare, Medicaid, and Social [...]
Mr. Mitchell says,
“For all intents and purposes, America is on a path to become a European-style welfare state.”
———————–
Sorry to say this dear American friends, but, to elaborate on a comment posted earlier by “Rushdie”, compared to the Average-American, the Average-European is actually a rocket scientist.
So if the welfare state has already crushed the competitiveness of the more competent Europeans, it seems inevitable that, decline for the less competent Americans will come much earlier. Way before Government to GDP ratios reach 50%. In other words, at a government size equal to that of the Europeans, even the Europeans themselves will beat the pants off you.
Once you loose your top spot on the international competitiveness scale, decline will be swift. It will follow the classical vicious cycle, whereby, the greater the pain voters feel, the more they will turn to government for “help”, enslavement, and then in turn, further decline in competitiveness.
There are roughly 200 nations in this world; and Americans had been the most prosperous of all for the last 100 years. Yet they never asked what seems the simplest, most obvious question: Why? That is, why alter a recipe (individualism) that has kept you the wealthiest nation in the world for 100 years and start copying the others?
Pr. Despandee
A warning to America:
All of Europe will sink just like Greece. Actually, by rescuing Greece, the European Titanic is adding weight to its bowls making it sink a tad bit faster. Europe hit the iceberg a while ago. It is too late to do anything. The only actions that make sense in Europe are to secure a life boat and plunder the ship while she goes down.
Unfortunately, I’m afraid that by the time Americans see all of Europe sinking like Greece, it will be too late to stop the American vicious cycle of (bigger government) -> (loss of prosperity) -> (voters feel pain) -> (voters ask for more government).
So those of you who are mobile, stay so, and get ready to move to whatever country or continent emerges freer from this race to the bottom.
[...] excessive government spending. The public sector is far too large today and it is projected to get much bigger in coming decades. But the corrupt and punitive internal revenue code is second on the list of fiscal problems. This [...]
[...] excessive government spending. The public sector is far too large today and it is projected to get much bigger in coming decades. But the corrupt and punitive internal revenue code is second on the list of fiscal problems. This [...]
[...] uncommon traits among supporters of limited government – and with good reason. Government has grown rapidly in recent years and it is expected to get much bigger in the future. To make matters worse, it seems that the deck is stacked against reforms to restrain government. [...]
[...] [...]
I am not for ANY tax increase. It will only enable more spending. The mess will only get bigger. Argentina collapsed when revenues were 10% of public spending.
Only hard limits of reality will cause politicians to change behavior.
[...] not uncommon traits among supporters of limited government – and with good reason. Government has grown rapidly in recent years and it is expected to get much bigger in the future. To make matters worse, it seems that the deck is stacked against reforms to restrain government. [...]
[...] percent of GDP. We have a bloated public sector today that is consuming 40 percent of GDP and the long-run projections indicate that the problem will get much worse because of entitlements and demographic changes. jQuery('#lazyload_post_0 [...]
[...] percent of GDP. We have a bloated public sector today that is consuming 40 percent of GDP and the long-run projections indicate that the problem will get much worse because of entitlements and demographic [...]
[...] percent of GDP. We have a bloated public sector today that is consuming 40 percent of GDP and the long-run projections indicate that the problem will get much worse because of entitlements and demographic changes. Tags: debt, deficits, Laffer Curve, Rahn [...]
[...] to smugly scoff at Europe’s troubles, but it’s just a matter of time before the same problems afflict America. This chart is based on Congressional Budget Office projections (an optimistic [...]
20% reduction in federal payroll.
Outsource federal employment to employee leasing companies and reduce total compensation to average market levels.
SS Retirement age changed for those under 46 years of age – adjusted to difference between average age of death (in 1937) and 65 years of age.
Sell “all Places/[Federal property] [not] purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;”
Remove medical licensing requirements for those treating medicare/medicaid patients. Produce PDF version of Mao’s Barefoot Doctors Manual for distribution to all practitioners.
[...] may be tempted to smugly scoff at Europe’s troubles, but it’s just a matter of time before the same problems afflict America. This chart is based on Congressional Budget Office projections (an optimistic “baseline” [...]
[...] I’ve explained before, America is on a pre-determined path to being a European welfare state. Preventing that tragic [...]
[...] Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of [...]
[...] Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of [...]
[...] Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of [...]
[...] Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of [...]
[...] Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of [...]
[...] Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] But even that’s too optimistic. America’s real fiscal challenge is that the burden of government spending will dramatically increase in coming decades, thanks largely to an aging population and poorly designed entitlement programs. Barring some sort of change, the United States will suffer the same problems that are now afflicting failed welfare states such as Gr…. [...]
[...] But even that’s too optimistic. America’s real fiscal challenge is that the burden of government spending will dramatically increase in coming decades, thanks largely to an aging population and poorly designed entitlement programs. Barring some sort of change, the United States will suffer the same problems that are now afflicting failed welfare states such as Gr…. [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] The bad news is that the budget does nothing to undo any of the damage of the past two years. Nor does it undo any of the damage of the previous eight years. And because the President’s budget refuses to address entitlement spending, it certainly doesn’t do anything to avert the damage of rapidly expanding budgets over the next several decades. [...]
[...] But even that’s too optimistic. America’s real fiscal challenge is that the burden of government spending will dramatically increase in coming decades, thanks largely to an aging population and poorly designed entitlement programs. Barring some sort of change, the United States will suffer the same problems that are now afflicting failed welfare states such as Gr…. [...]
[...] The bad news is that the budget does nothing to undo any of the damage of the past two years. Nor does it undo any of the damage of the previous eight years. And because the President’s budget refuses to address entitlement spending, it certainly doesn’t do anything to avert the damage of rapidly expanding budgets over the next several decades. [...]
[...] The bad news is that the budget does nothing to undo any of the damage of the past two years. Nor does it undo any of the damage of the previous eight years. And because the President’s budget refuses to address entitlement spending, it certainly doesn’t do anything to avert the damage of rapidly expanding budgets over the next several decades. [...]
[...] But even that's too optimistic. America's real fiscal challenge is that the burden of government spending will dramatically increase in coming decades, thanks largely to an aging population and poorly designed entitlement programs. Barring some sort of change, the United States will suffer the same problems that are now afflicting failed welfare states such as Gr…. [...]
[...] For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece. [...]
[...] For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece. [...]
[...] For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece. [...]
[...] For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece. [...]
[...] For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece. [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece. [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax system. jQuery('#lazyload_post_0 [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax [...]
[...] America is in fiscal peril in the short run because of a 10-year spending binge by Bush and Obama and in the long run because of a toxic combination of entitlement programs and demographics. [...]
[...] America is in fiscal peril in the short run because of a 10-year spending binge by Bush and Obama and in the long run because of a toxic combination of entitlement programs and demographics. [...]
[...] don’t particularly care about the GOP’s electoral prospects, but I do want to save my nation from fiscal collapse, so that means I don’t want entitlement reform to become [...]
[...] America is in fiscal peril in the short run because of a 10-year spending binge by Bush and Obama and in the long run because of a toxic combination of entitlement programs and demographics. [...]
[...] America is in fiscal peril in the short run because of a 10-year spending binge by Bush and Obama and in the long run because of a toxic combination of entitlement programs and demographics. [...]
[...] don’t particularly care about the GOP’s electoral prospects, but I do want to save my nation from fiscal collapse, so that means I don’t want entitlement reform to become [...]
[...] led him to attack House GOPers who are trying to reform Medicare to protect America from becoming a bankrupt, Greek-style welfare state. Ryan’s proposal, which was passed by the GOP-controlled House in April, would have people 54 [...]
[...] don’t particularly care about the GOP’s electoral prospects, but I do want to save my nation from fiscal collapse, so that means I don’t want entitlement reform to become [...]
[...] don’t particularly care about the GOP’s electoral prospects, but I do want to save my nation from fiscal collapse, so that means I don’t want entitlement reform to become [...]
[...] a serious point to all this, of course, and it’s the fact that we know we are on a road that will lead to a Greek-style economic collapse. Yet Obama’s response is to step on the [...]
[...] Dan’s Blog, My Big Fat Greek Budget [...]
[...] When you follow these five steps, you’ll probably want to go to step 6, which is to inquire about the cost of property in Costa Rica or some other place to which you can escape when America collapses into a Greek-style fiscal crisis. [...]
[...] inquire about the cost of property in Costa Rica or some other place to which you can escape when America collapses into a Greek-style fiscal crisis. jQuery('#lazyload_post_0 img').lazyload({placeholder: [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point of no return when the people riding in the [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point of no return when the people riding in the [...]
[...] Morondotti; In my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point of no return when the people riding in the [...]
[...] make two simple points. First, America faces a Greek-style fiscal crisis if we leave the federal budget on autopilot (actually, it will be worse since we won’t get a bailout from the [...]
[...] The video features my commentary, along with the sage analysis of my Cato colleague Chris Edwards. We make two simple points. First, fiscal reforms are necessary because America faces a Greek-style fiscal crisis if we leave the federal budget on autopilot. [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] though I predicted it had to happen at some point because of the Bush-Obama spending binge and America’s giant long-run entitlement crisis, I confess that I’m somewhat surprised that the United States has suffered a debt downgrade [...]
[...] though I predicted it had to happen at some point because of the Bush-Obama spending binge and America’s giant long-run entitlement crisis, I confess that I’m somewhat surprised that the United States has suffered a debt downgrade [...]
[...] though I predicted it had to happen at some point because of the Bush-Obama spending bingeand America’s giant long-run entitlement crisis, I confess that I’m somewhat surprised that the United States has suffered a debt downgrade for [...]
[...] whеn talking аbουt thе fiscal crisis іn Europe (οr thе future fiscal crisis іn America), I οftеn warn thаt thе welfare state reaches a point-οf-nο-return [...]
[...] Whether the President is talking about higher income tax rates, higher payroll tax rates, an expanded alternative minimum tax, a renewed death tax, a higher capital gains tax, more double taxation of dividends, or some other way of extracting money, the goal is to have these people foot the bill for a never-ending expansion of the welfare state. [...]
[...] it goes without saying that America faces the same challenge. The only difference is that we have a few years to solve the problem before we have our own Greek-style fiscal crisis. LD_AddCustomAttr("AdOpt", "1"); LD_AddCustomAttr("Origin", "other"); [...]
[...] Whether the President is talking about higher income tax rates, higher payroll tax rates, an expanded alternative minimum tax, a renewed death tax, a higher capital gains tax, more double taxation of dividends, or some other way of extracting money, the goal is to have these people foot the bill for a never-ending expansion of the welfare state. [...]
[...] But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece. [...]
[...] But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece. [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax system. Daniel J. Mitchell • April 18, 2011 @ 9:03 am [...]
[...] some dramatic change, America is doomed to become another Greece. LD_AddCustomAttr("AdOpt", "1"); LD_AddCustomAttr("Origin", "other"); [...]
[...] Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax system. Daniel J. Mitchell • April 18, 2011 @ 9:03 am [...]
[...] But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece. [...]
[...] But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece. [...]
[...] the way, America will suffer the same fate in the absence of [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] the way, America will suffer the same fate in the absence of [...]
[...] But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece. [...]
[...] written about the fiscal implosion in Europe and warned that America faces the same fate if we don’t reform poorly designed entitlement programs such as Medicare and [...]
[...] written about the fiscal implosion in Europe and warned that America faces the same fate if we don’t reform poorly designed entitlement programs such as Medicare and [...]
[...] written about the fiscal implosion in Europe and warned that America faces the same fate if we don’t reform poorly designed entitlement programs such as Medicare and [...]
[...] written about the fiscal implosion in Europe and warned that America faces the same fate if we don’t reform poorly designed entitlement programs such as Medicare and [...]
[...] Most people have a vague understanding that America has a huge long-run fiscal problem. [...]
[...] people have a vague understanding that America has a huge long-run fiscal problem. They’re right, though they probably don’t realize the seriousness of that looming [...]
[...] issue of genuinely fixing entitlement programs, something that is needed to save America from Greek-style fiscal collapse at some point in the [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of [...]
[...] the United States is in grave danger of becoming a European-style welfare state. Indeed, that will automatically happen in the next few decades because of demographic changes and poorly designed entitlement [...]
[...] the United States is in grave danger of becoming a European-style welfare state. Indeed, that will automatically happen in the next few decades because of demographic changes and poorly designed entitlement [...]
[...] right that the main problem is in the future. As I’ve noted before, America is doomed to become Greece because of rising entitlement [...]
[...] at a faster rate. So America will benefit from flight capital in the short run even though our long-run prospects are equally dismal. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] if you allow me to modify an old saying, a journey of tens of trillions of dollars begins with the first $3 billion. Rate this: Share [...]
[...] my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding [...]
[...] This isn’t to say gridlock, by itself, solves problems. Necessary reforms such as the Ryan budget can’t be implemented if we have gridlock forever, and that means America eventually would become another Greece. [...]
[...] issue of genuinely fixing entitlement programs, something that is needed to save America from Greek-style fiscal collapse at some point in the [...]