The recent agreement between President Trump and Democratic leadership to once again raise the debt ceiling reinforced the notion that the annual increase in America’s already-massive debt limit is an inevitability. According to domestic policy expert and Stanford professor John Cogan, the primary reason the debt ceiling continues to rise is lawmakers’ inability to curb massive entitlement spending. The history of entitlements in America shows that weaning the nation off of these payments– or curbing them at all– is near-impossible. Which, quite frankly, is just fine for many politicians– primarily Democrats– who rely on them to retain the loyalties of several constituencies. The inability to curb entitlement spending is, however, a failure that falls on both parties.
The current statistics pertaining to the welfare state are overwhelming, and their multiplying growth is to be expected, according to Cogan. 2010 served as the most recent peak in entitlement spending as a percentage of GDP, reaching 18%. That is a huge leap from WWII era entitlement spending, which remained just over 2% of the gross domestic product. In 2016, Social Security spending alone totaled $916 billion, while Medicare cost an additional $595 billion.
Entitlement programs meant to benefit the poor also impose massive costs on taxpayers, adding to the debt which seemingly has no limit at all. Medicare was estimated to have run a $651 billion bill in 2016, while all other welfare programs carried a tab of $433 billion. It is clear that these multi-billion dollar programs, when combined on an annual basis, have come to represent a massive chunk of annual spending. Despite the obvious role they play in running up America’s national debt, few serious discussions regarding efforts to scale these programs back have been had. Much of the reason for this is explained by political promises, gamesmanship, and negligence toward the long-term financial future of the nation.
The history of the American entitlement system began with Civil War pensions. According to Cogan, who has researched the topic in depth, 30 years after the war ended Civil War pensions accounted for 40% of government spending, a truly astounding figure. Most perplexing was that in 1873, eight years after the war, only 8,000 people were receiving pensions. Inexplicably, 12 years later, approximately 1 million people were receiving a pension from the federal government. A similar pattern of exponential growth had occurred in the wake of the Revolutionary War.
And, perhaps unsurprisingly, such a pattern has been shown with respect to modern forms of entitlements. It is, after all, a pattern that is tied not to any specific program or true need for assistance, but to human nature.
The expansion of these programs is uniformly the result of rules being relaxed. War veterans who were injured were originally the only ones allowed to collect a pension. Then, such lifetime funds would be extended to all veterans of the war.
The same pattern would evolve with respect to Social Security. The original iteration of Social Security was extended to only 50% of the workforce. Eventually, universal coverage would be granted, even to those who did not need federal assistance. Likewise, disability provided from Social Security was originally only available to those 50 years or older, and only those who were truly prevented from working any job as the result of an injury. Eventually, laws would be relaxed to the point where even temporary disabilities were covered under the entitlement program.
Now, it is not a stretch to say that you can eat your way into disability payments. Many a website will instruct you step-by-step on how to monetize your gluttony.
We have seen this phenomenon of steady, permanent expansions in entitlement programs evolve to the point where Americans spend over a trillion dollars per year on these benefits. It is, according to experts like Cogan, a matter of human nature. Looking at a person who is receiving government payments yet seems not dissimilar from oneself creates an obvious question: “If he can get free products and services on the government dole, why can’t I?”
“After an entitlement is created,” Cogan says, “individuals who are just outside the eligibility line start clamoring for assistance on the grounds that they’re no less ‘worthy’ of receiving assistance than the group that is eligible.”
He uses the expanded disability program as an example to illustrate the mentality that has caused the massive expansion in entitlements as a whole.
‘In the case of Social Security disability, why should a 49-year-old who was disabled in a car accident receive any less help than a person who’d had an accident at 50?’
And, if a 49-year-old receives disability payments, a 48-year-old will be clamoring for their own subsidy not long after. And so it goes…
Unless politicians take a hard line on stanching further expansion of entitlement programs, the debt ceiling will continue to be driven up, and more Americans will be less incentivized to work as access to government is increasingly easier. We have already seen that the nation’s opiate crisis has created massive gaps in the labor force, and the expansion of entitlement programs enables those already inclined not to work to do so without financial penalty.
Politicians know the power of the government in appeasing constituencies and fostering a less independently minded populace. It is the reason why Nancy Pelosi and Chuck Schumer essentially boycotted funding for Hurricane Harvey relief until the President agreed to raise the debt ceiling once again. It is quite a sinister move, and it illustrates the lengths to which politicians on both sides of the aisle will go to expand entitlement programs, which Democrats are especially likely to embrace.
The House Freedom Caucus, made up of libertarian and conservative Republicans, was very unhappy with the President’s decision not to take a stand against yet again raising the debt ceiling primarily to accommodate further entitlements. It is a lose-lose, however.
The President was motivated to secure funding for Harvey as soon as possible, and the Democrats knew that the aftermath of a catastrophic natural disaster was an ideal time to leverage their spending agenda. Meanwhile, it is easy to paint the Freedom Caucus as heartless for prioritizing fiscal reform over securing funding for the flood victims. Somebody has to take a stand against the ever-rising tide of debt that comes from annually indulging entitlement seekers and those who grant their wishes, however.
Unfortunately for the Freedom Caucus and like-minded people, the fact is that there will always be some opportunity for pro-entitlement expanders to leverage their agenda. Whether it is the next hurricane or the threat of a government shutdown, it is always something. Inevitably, the debt ceiling gets raised, and entitlements get expanded. Such expansion has dated back to the Civil War, and the problem has only gotten worse.
With the nation already $20 trillion in debt, it seems as if Americans have become desensitized to the notion of debt entirely. This fiscal malfeasance has saddled future generations with untenable debt with no apparent means to pay it back. Millennials have unprecedented levels of personal debt that they can rarely afford to pay back in a timely fashion. The notion that they will be able to pay off the debt that their federal government continues to recklessly incur qualifies as delusion.
In fact, that personal debt makes it more likely that entitlements will be expanded as a generation continues to struggle to pay for their college and credit card debts, two of the greater albatrosses around the generation’s neck. And, bet your bottom dollar (likely loaned to you with a hefty interest rate) that more and more people will find a way to ‘qualify’ for the ever-expanding programs.
If regular citizens don’t find a way to get their government subsidy, the politicians will find one. History tells us that this is a certainty.