The Truth about Social Security and Medicare

As the national debt continues to skyrocket into oblivion, it should be obvious to any American that the U.S. government has a spending problem. The current offical national debt of the United States stands at $16 trillion. This number alone should frighten Americans and wake them up to the consequences of embarking on a welfare-warfare state project for almost 100 years. But for some reason, this has not sunk in for most Americans, who either want to expand the welfare state (modern liberals) or expand the warfare state (conservatives). But the costs of such social engineering of society are much greater.

As Gary North has noted, the real national debt for the U.S. has increased $11 trillion. How is this so? This increase was primarily due to unfunded liabilities, which are political promises politicians have made over the course of many year yet do not have the money at hand to pay for such promises. As Gary North states, "The expert here is Professor Lawrence Kotlikoff of Boston University. His most recent report says that total unfunded liabilities went from $211 trillion a year ago to $222 trillion this year."

So any calls for slashing federal spending in the billions over the course of several year is a pipe dream. The unfunded liabilities will continue to expand, thus defeating the purpose of any cuts in federal spending. But what programs contribute to this ever expanding problem of unfunded liabilities? The answer is two sacred pillars of the American welfare state: Medicare and Social Security.

 

Reaping a Whirlwind of Fiscal Disaster 



Along with the Military-Industrial Complex, Social Security and Medicare are considered to be "sacred cows" which are politically immune from any cuts. Any talk of abolishing and phasing out these programs is off the table to most Americans. But failure to phase out these blatantly unconsitutional programs will only retard any genuine economic recovery; even the unfunded liabilities of trillions are enough the bring about a total destruction of the American econonmy. In order to even pay off the unfunded liabilities (this is not counting the rest of the federal budget), taxes would have to be raised so high that almost all economic activity would come to a hald with genuine productivity being destroyed.

But we must ask ourselves, can the U.S. government even begin to pay off both the unfunded liabilities of Social Security and Medicare and the whole of the U.S. national debt? I am beginning to think that the answer is no. The U.S. government will default.

What to do? Default and End These Programs

 

If American are serious about ending and paying off the national debt of the United States, the first thing that needs to be done is to eliminate Social Security and Medicare. This proposal seems crazy and radical, but it is necessary. Why should Americans, especially current American workers, be forced to pay for the retirement of people who should have been saving for their retirement themselves, or at the very least get help from family, charity or the church? As George Reismen has stated:"Fundamentally, rights to entitlements of any kind, that must be paid for involuntarily by other people, are no more legitimate than the alleged property rights of slave owners in their slaves." George Reismen continues: "From its inception in 1935 to the present day, the Social Security system has served both to undercut people's motivation to provide for old age and retirement by means of saving and also their sheer ability to do so."

 

The Ponzi scheme of Social Security will eventually end. The welfare statism of both Medicare and Social Security will end when the government finally admits that it is broke. Defaulting sooner rather than latter will prevent greater economic pain later down the road.