What is the #1 budget-buster over the next decade? Medicare.
Will voters allow cuts in Medicare? No.
Tea Party promoters say they are in favor of cutting spending. The problem is, they resist cutting spending for Social Security, Medicare, and the Defense Department. Yet these are the three budget-busters.
Keynesian liberal economist Paul Krugman has pointed out the irony of red state welfare checks. More federal money goes to these states than goes to blue states.
There is schizophrenia here. It turns out that over 40% of those people who are on the dole think they aren’t.
Aaron Carroll of Indiana University tells us that in 2010, residents of the 10 states Gallup ranks as “most conservative” received 21.2 percent of their income in government transfers, while the number for the 10 most liberal states was only 17.1 percent.
Now, there’s no mystery about red-state reliance on government programs. These states are relatively poor, which means both that people have fewer sources of income other than safety-net programs and that more of them qualify for “means-tested” programs such as Medicaid.
By the way, the same logic explains why there has been a jump in dependency since 2008. Contrary to what Mr. Santorum and Mr. Romney suggest, Mr. Obama has not radically expanded the safety net. Rather, the dire state of the economy has reduced incomes and made more people eligible for benefits, especially unemployment benefits. Basically, the safety net is the same, but more people are falling into it. . . .
The message I take from all this is that pundits who describe America as a fundamentally conservative country are wrong. Yes, voters sent some severe conservatives to Washington. But those voters would be both shocked and angry if such politicians actually imposed their small-government agenda.
He is correct. This is why no politician with any chance of winning is willing to show what he will cut. This is why the U.S. runs a $1.3 trillion deficit every year, and will continue to do so.
This is why the Great Default is coming, when Washington finally runs out of money to buy votes.
That is when the Federal Reserve will have to inflate. If it does, we will get hyperinflation. If it doesn’t, we will get the Great Default: universal deflationary bankruptcy. The FED wants to find the middle path. But $1.3 trillion deficits must be funded. How? For how long? At what interest rate?