The End of Entitlement
Can the federal government afford to continue Social Security and Medicare payments at current levels? Can it afford not to? A more useful question would be: How did we get into this entitlement mess in the first place? Until we know that, we'll never find the way out.
When FDR launched the Social Security Administration in 1935 it was a move born of desperation. Unemployment during the Great Depression had peaked at more than 20 percent. Americans were destitute. The Social Security Act was signed over the objections of those who feared it would spawn a permanent welfare underclass -- that people who didn't have to work, wouldn't. However, the bank failures and home foreclosures, bread lines and soup kitchens were powerful persuaders that desperate times called for desperate measures.
America began a slow and unsteady recovery. By 1938 unemployment was 12.5 percent. It was World War II that finally snapped the country out of its economic slump: in 1943, at the height of the fighting, U.S. unemployment was 1.8 percent, well below the level of statistical full employment. Next, the 1950s ushered in the most prosperous period in American history.
But guess what? The federal safety net designed for a time when unemployment was 20 percent and stockbrokers were jumping out of windows was still there. Not yet unmanageable, still a small fraction of the federal budget, still considered a lifeline for the desperate and a retirement income supplement for the rest.
Then along came the tumultuous, iconoclastic, game-changing 1960s. The Beatles, birth control, civil rights, assassinations, women's lib, Vietnam. In 1965, the Best Picture Oscar went to The Sound of Music. In 1969, the winner was Midnight Cowboy. Out of this societal upheaval sprang a new foundational cultural belief: Somebody owes me.
A shift began in popular thinking and in the federal government's approach to governing. Historically, policymakers in Washington were there to do for individual citizens what they couldn't do for themselves -- build roads, deliver the mail, field an army. Now a raft of new programs, Lyndon Johnson's Great Society, appeared, unprecedented, to "help" not only the desperate and destitute but millions of others. These people needed "help" not because they were careless, lazy, untalented, or unfortunate but because they were "victims of society." Since society had wronged them, it owed it to them to make it right.
In 1965, Medicare and Medicaid began paying medical expenses of the retired and those who could demonstrate "need." Human nature being what it is, two things happened. First, those who could demonstrate "need" availed themselves of free medical care far beyond any level they would have used had they been required to pay for it. Second, given virtual carte blanche by the government, hospitals and other medical providers jacked up their prices in breathtaking fashion. (Even today, in times of "controlled" health care cost increases, medical care expense is growing at three times the rate of inflation.)
And voilá, our citizenry became entitled to medical care and a retirement income no matter what the cost. The more they got, the more they wanted. When mumblings began as to how government would keep paying for these entitlements down the road, many of those who asked the hard questions were voted out of office or threatened with such, and replaced by more enlightened legislators. Unwilling to face the political consequences of doing the right thing, Washington papered over the inevitable day of reckoning as long as possible.
Now their time is up. The Great Society slop trough is finally empty. After 46 years of War on Poverty and $3 trillion spent on welfare, Social Security and Medicare/Medicaid consume 43 percent of the federal budget, to the point where the U.S. is faced with the prospect of defaulting on its sovereign debt. The result: more people "in poverty" on a percentage basis than there were in 1965, and calls for still higher spending levels.
The War on Poverty was doomed from the first salvo. Jesus' statement that the poor will always be with us (Matt. 26:11) is not some vapid Christian platitude, but a keen observation on the human condition. Poverty is an inevitable consequence of life on earth. No amount of money will end it.
Certainly no one should go sick or hungry in the richest nation in world history. But neither should they have cell phones, central air conditioning, satellite TV, and late-model cars and then expect somebody else to pay their doctor bills.
More important, neither should people expect the government to meet all their needs and solve all their problems. The government is the least motivated and most poorly equipped of any entity for the job. How did we survive before the Great Society? We relied on ourselves, our neighbors, our private charities, our churches.
We had expectations in line with our means and the understanding that the world could be a harsh and unfair place. We had a public sense that we did the best we could, knowing that life's greatest rewards had little to do with money, comfort, and leisure and much to do with honor, self-sufficiency, and giving more than we take.
Of the 245 million Americans today age 15 and above, more than half of them, 136 million, receive some sort of payment from Uncle Sam every month. This reality makes any meaningful entitlement reform a steep uphill battle. Sorting through the truly needy to weed out the entitled masses will be a nasty job. They're all entitled; if you don't believe it, just ask them. And they all have lawyers. No charge, of course.
It took a lifetime to get into this mess, so it may well take that long to get out of it. The first useful step will be to stop looking to Washington to solve our problems and look instead to faith, family, honest work, humility, and the other foundation stones that lined our pathway to greatness. And that line the way back.