Posts tagged with: entitlements

Samuel Gregg was recently on WORD-FM: Pittsburgh’s “The Ride Home with John and Kathy” to talk about Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future. They discuss many of the main themes of the book, including:  Americans’ changing attitude toward liberty and economic freedom, entitlements, and the welfare state.

Listen to their discussion here:

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Becoming Europe is available as a hardcover or an eBook. If you want to learn more, read a free sample, or purchase the book, click here.

Samuel Gregg, Acton’s Director of Research and author of the book “Becoming Europe“, says one of America’s real debt dangers is our increasing sense of entitlement from the government. In today’s Investor’s Business Daily editorial, Gregg states our “insatiable appetites” are getting us into the very deep economic trouble that no one, least of all politicians, seems to want to face:

…Luxembourg’s Prime Minister Jean-Claude Juncker famously lamented in 2007: “We all know what to do, but we don’t know how to get re-elected once we have done it.”

It’s tempting to see this as a peculiarly Western European problem. This is after all a continent in which even many nominally center-right governments’ default positions are essentially social democratic: i.e., extensive government intervention is simply considered normal.

But can anyone seriously deny that many American politicians — including some conservatives — play this game? Or that millions of Americans from all backgrounds have developed absurd expectations of what government “owes” them in economic terms?

And I’m not just talking about those who apparently regard any streamlining of social security as tantamount to homicide. I’m also referring to those businesses who think they’re entitled to receive corporate welfare instead of competing in the marketplace.

Gregg’s recommended remedy? “To put it bluntly, we need to accept that our participation in democracy cannot degenerate into voting for whoever promises us the most stuff.”

Based on Nicholas Eberstadt’s book, A Nation of Takers, this Seussian video depicts the dangerous dependency of entitlements and the importance of liberty.

(Via: Values & Capitalism)

Blog author: michael.severance
posted by on Tuesday, September 18, 2012

A video surreptitiously filmed during one of Mitt Romney’s private fundraisers was leaked and captured the Republican presidential nominee talking to donors last April in a Florida home (watch below) during a very candid moment.

While Romney states the facts and opinions as he sees them regarding the prevalent public welfare culture in America, he quotes figures that will surely stir animosity from within the Obama administration and his loyal Democratic voters.

Here’s a summary of what Mitt Romney told his campaign donors:

There are 47 percent of the people who will vote for the president no matter what…There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. ..They will vote for this president no matter what… And so my job is not to worry about those people. I will never convince them [that] they should take personal responsibility and care for their own lives. What I have to do is convince the five to ten percent in the center, that are independents, that are thoughtful, the look at voting one way or the other…

(more…)

Blog author: lglinzak
posted by on Thursday, August 11, 2011

Rumors are flying about a possible hearing involving Standard & Poor’s. It is believed the Senate Banking Committee is gathering information on the credit rating agency. Disgruntled over the loss of the government’s AAA rating, the rumored investigation is believed to be sparked by Treasury Department officials claiming that S&P’s judgment was affected by an error that overstated national debt projections by $2 trillion. And in the House, a few Republicans are wondering about talks S&P executives had with Treasury officials.

What is also being discussed as justification for a possible investigation is S&P’s, along with other rating agencies, failure to accurately rate mortgage securities which contributed to the housing bubble. The logic behind such an argument reflects a flawed train of thought, for surely if S&P  failed to rate mortgage securities they didn’t correctly rate the U.S. government.

It appears, based upon actions, that the government hasn’t learned anything from the recent downgrade. Instead of taking responsibility, elected officials are looking for a scapegoat and have decided to place the blame on S&P.

As Samuel Gregg explains in, “Down on the Downgrade?” S&P’s failure to accurately rate mortgage securities shouldn’t dismiss the obvious, which is the United State’s  inability to meet its fiscal obligations resulting in its credit downgrade:

There are many reasons to be cynical about ratings agencies. These are, after all, the same outfits that assured us collateralized-debt-obligation markets were doing fine just before they started imploding in 2007–2008. Their slowness in warning about the fading creditworthiness of corrupt entities such as Enron and government-sponsored enterprises such as Fannie Mae and Freddie Mac is a matter of record.

That said, Standard & Poor’s decision to downgrade America’s creditworthiness shouldn’t surprise us. It simply states in a pseudo-official kind of way what everyone — citizens, investors, politicians, and maybe even Paul Krugman — already knows: The failure of Washington’s neo-Keynesian policies combined with the long-term projections for entitlement-spending have lowered confidence in the U.S.’s ability to meet its fiscal obligations.

The surprise that many in the government are showing by the U.S. credit downgrade is appalling. S&P published reports clearly articulating the fiscal policy that was needed in order for the government to preserve its AAA rating which included $4 trillion in savings (the budget includes only abut half of that in cuts). Furthermore, in a report released on August 5th, S&P doesn’t just blame the lack of savings but describes  how entitlement spending is a problem:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

There are clear policy options the government needs to pursue if it wishes to return to fiscal health, and it should be of no surprise that such policies involve fiscal stewardship.

Instead of being humbled by the government’s loss of its triple AAA credit rating and learning from their mistakes, the politicians in Washington have chosen to sit on the sidelines. The lack of leadership in such a crucial time is astounding. Politicians are continuing down the path which brought them to this state: blaming others instead of accepting responsibility. It is time for some humility in Washington. Politicians need to admit to their mistakes and become leaders set on bringing America back on course.

Blog author: lglinzak
posted by on Tuesday, July 26, 2011

Yesterday Senator Harry Reid finally proposed a budget plan – one week before the United States is set to default. It is about time that Senate Democrats joined President Obama and House Republicans in offering a concrete budget proposal; however, their budget plan passes the buck onto future generations.

The government cannot continue to leave budget woes to future generations, and this is exactly what Senator Reid is trying to do. In fact, after viewing a video found on his website, he seems rather proud of the fact that his budget proposal doesn’t touch the three largest entitlements—Social Security, Medicare, and Medicaid—which alone consist of 40 percent of federal spending in 2010 (entitlement spending makes up 57 percent of federal spending). Instead of making the tough call, proposing reforms and cuts to spare future generations from the large financial burden these programs bring, the Senate Democrats are deciding to continue with things as they are. Judging by the current financial state of the U.S. this is rather problematic.

The Senate Democrats’ budget proposal disregards the principles of stewardship. By not cutting or reforming entitlements they are not looking long term to ensure the creation of a strong and stable economy for our children and grandchildren.  Jordan Ballor in his commentary “Do Less with Less: What the History of Federal Debt and Tax Leverages Teaches” offers a pretty common sense solution for Senator Reid:

Raising taxes without such assurances, even for such a critical cause as the public debt crisis, is pure folly. To really address the structural deficits at the heart of the federal budget, particularly with respect to entitlement programs like Social Security, Medicare, and Medicaid (which together accounted for 40 percent of federal spending in 2010), the government simply needs to find ways to do less with less.

Entitlements have greatly contributed to our deficit problem, and a sound budget solution will recognize their contribution to the deficit and look to rectify the situation.

As Samuel Gregg articulates in “Deficit Denial, American-Style” the U.S. must pay off its debt if it hopes to economically grow and flourish:

After examining data on 44 countries over approximately 200 years, two economists recently found evidence suggesting that developed nations with gross public debt levels exceeding 90 percent of GDP (i.e., America) find that their medium-growth rates fall by one percent, while average growth declines by an even greater proportion.

The United States can begin down the path of prosperity by shrinking government and doing less with less and fostering an economic climate that is strong and vibrant for future generations.

Also see the Acton Institute’s  Principles for Budget Reform which can be viewed by clicking here.

 

 

 

Blog author: lglinzak
posted by on Wednesday, March 23, 2011

With the ongoing budget debate there is much discussion about what to cut and what not to cut, whether taxes should be raised, and if we should avoid even considering cutting certain programs. At the center of the discussion is the state of entitlement programs.

One program everyone in Washington seems to be leery of is Social Security. Whether it is because of ideologically supporting the program or afraid of ruining a political career, Social Security, again, may remain untouched. Political culture has taught elected officials to avoid the topic of reforming Social Security. In the past, those who have attempted to address issues related to it have been demonized. And when re-election time came around, many private interest groups made sure to fund ads to negatively attack anyone’s past attempts of reforming Social Security. However, with our current debt crisis and economic problems, now is not the time to ignore Social Security. Leadership is needed to tackle the hard problems.

Social Security has run aground. The Congressional Budget Office (CBO) reported that program will officially run out of money by 2037 if the program is not reformed.  Furthermore, the CBO also projects that this year Social Security will collect $45 billion less in payroll taxes than it pays out.

Just as alarming as the lack of leadership is the number of Americans who benefit from it who will be dramatically affected if Social Security does fail. According to the Social Security Administration (SSA) over 54 million Americans will receive $730 billion in benefits in 2011, these numbers also includes those who are disabled our receiving survivor benefits. For the month of February, the SSA paid over $58 billion to its beneficiaries. The numbers get even more daunting when they are coupled with the number of Americans who rely on Social Security as their sole source of income.

The SSA states, “Among elderly Social Security beneficiaries, 22 percent of married couples and about 43 percent of unmarried persons rely on Social Security for 90 percent or more than their income.” The Institute of Women’s Policy Research also provides alarming numbers. According to their data, in 2009, 29 percent of women and 20 percent of men relied on Social Security for all of their income. It is important to keep in mind that Social Security provides many elderly members with the necessary money to avoid poverty. As a result, instead of letting Social Security continue to run its unsustainable course, it is imperative to fix to program so vulnerable members in our society can continue to be aided by it. (more…)

Blog author: jballor
posted by on Tuesday, December 23, 2008

Ramesh Ponnuru says Social Security is worse than a Ponzi scheme.

He’s right. It’s more like an inter-generational pyramid scheme, a pyramid tipped on its side…


To be sustainable, over time (T) it has to take more from more people (thus a three-dimensional pyramid rather than a two-dimensional triangle. It’s really exponential rather than multiplicative).

Social Security. In case you forgot, it still needs fixing. This Christmas, think about the rather unpleasant gift we’ll be leaving the generations that follow in the form of unsustainable and unfunded “entitlements.”

Blog author: jballor
posted by on Wednesday, August 30, 2006

In this week’s Acton Commentary, Jennifer Roback Morse wonders why no one is talking about the Forbidden Topic in the Social Security debate. That taboo subject is the declining birth rate. Jennifer Roback Morse writes that “the collapse in the fertility levels, particularly striking among the most educated women in society, is a contributing factor to the insolvency of our entitlement programs.”

Read the entire commentary here.