Who is on the dole, and for how much? This map of the USA tells us, beginning in 1969. Watch the welfare state grow. This map lets you do this. (You have to click the link to get the interactive map to do its work.)
Here is what the map looked like in 1969: under 8% of people’s personal income came from the U.S. government’s welfare programs.
It’s just getting rolling. The real hit to the federal budget lies ahead. An accompanying story reveals this.
The Congressional Budget Office projects that government spending on medical benefits, even taking into account the cost containment measures in the 2010 health care law, will rise 60 percent over the next decade. Then it will start rising even more quickly. The cost of caring for each beneficiary continues to increase, and the government projects that Medicare enrollment will grow by roughly one-third as baby boomers enter old age.
Spending on medical benefits will account for a larger share of the projected increase in the federal budget over the next decade than any other kind of spending except interest payments on the federal debt.
Medicare’s starring role in the nation’s financial problems is not well understood. Only 22 percent of respondents to the New York Times poll correctly identified Medicare as the fastest-growing benefits program. A greater number of respondents, 27 percent, chose programs for the poor. That category, which includes Medicaid, is slightly larger than Medicare today but is projected to add only half as much to federal spending over the next decade.
Medicare’s financial problems are much worse than Social Security’s. A worker earning average wages still pays enough in Social Security taxes to cover the benefits the worker is likely to receive in retirement, according to an analysis by the Urban Institute. Social Security is still running out of money because the program must also support spouses who do not work and workers who earn lower wages. But Medicare’s situation is even more dire because a worker earning average wages still contributes only $1 in Medicare taxes for every $3 in benefits likely to be received in retirement.
Then the author of the articles plays the government’s shell game. Can you spot it?
A woman who was 45 in 2010, earning $43,500 a year, will pay taxes that will reach a value of $87,000 by the time she retires, assuming the money is invested at an annual interest rate 2 percentage points above inflation, according to the Urban Institute analysis. But on average, the government will then spend $275,000 on her medical care. The average is somewhat lower for men, because women live longer.
I hope you did. This qualifying phrase is deliberately deceptive: assuming the money is invested at an annual interest rate 2 percentage points above inflation. The money will not be invested at all. It will be spent by the government, which will issue IOUs to the Medicare Trust Fund.
Medicare is already running an annual deficit.
Medicare is often described as an insurance program, but its premiums are not nearly high enough. In simple terms, Americans are getting more than they pay for.
Medicare will bankrupt America. The welfare state is going bust.
You had better prepare now for the inevitable Great Default.
This should be mandated reading for voters this year. This is the corner we have painted ourselves in and why things get more dicey every day.
Is anybody out there in the United States or in Europe? This is what you have done to yourself and everyone else. Do you have no shame?
Thank you Gary! This is a must see article. I appreciate the fact that it breaks Medicaid our from Medicare. Our expectation is that Social Security and Medicare will be funded from payroll contributions. It looks like spouses need to be paying into Social Security. My father was in farming, and I know they both made their Social Security contributions. Other people needed to be doing the same thing, if they wanted to be covered by Social Security. This is an example of people using the system. If a couple has been married over 10 years, then they can quit paying into the system for the wife. If they expect to be married for over 10 years, some may never pay into the system for the wife. The Social Security Program needs to end its loop holes. The Federal government needs to immediately end Social Security spousal support for those with total earnings above the Maximum for Social Security, if that that group is currently being allowed Social Security. Medicaid obviously needs to be privatized – back to non-profit support and home births. The majority of health problems strike in "Old Age", so there is no excuse for Medicaid requiring more Federal dollars than Medicare. In my opinion, the reason that Medicaid requires so much Federal funding is that Medicaid pays for the consequences of vice – everything from unwed pregnancies to alcohol and drug-related disease. The public should not have to be paying for life-style choices that result in disease.