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.