The main business of the federal government 

With Gore and Bush arguing with over relative sizes of their respective plans to provide prescription drug coverage to seniors, some have asked how it's the government's business in the first place to provide such a service.  Well, let's review.

    a. to guarantee the national defense
   b. to maintain an interstate highway system
   c. to define, interpret, and uphold the laws
   d. to care for the poor and disadvantaged
   e. to take from the young and give to the old

The answer, of course, is "e."  The primary function of the federal government is to take from the young and give to the old.

If this answer seems surprising to you, consider the following list of the top 10 categories of federal spending for fiscal year 1995 (from the 1996 Statistical Abstract of the United States, U.S. Census Bureau):

These 10 items accounted for 97% of all federal spending. Note that all items on this list except 2, 7, 9 and 10 involve, to one extent or another, taking from the young and giving to the elderly. (Item 3 counts, since a large part of the national debt results from unfunded entitlements.  Item 6 counts, since the most rapidly increasing expense in Medicaid today is nursing home care for the elderly.) 

Notice also that the programs on this list (except, of course, paying interest on the debt, and possibly defense), are extremely popular ones.  That’s the beauty of creating entitlements to which everybody is entitled.  When you do, everybody loves you. 

Obviously, any meaningful effort to cut federal spending would have to affect one or more of these entitlement programs.  Yet, any politician who talks seriously about cutting them is toast. The programs politicians like to talk about cutting – things like welfare, foreign aid, and support for the arts – are so trivial they don’t even show up on this list.  The so-called “conservative revolution” notwithstanding (whose myth is that the government takes our hard-earned dollars and busily spends it on wacky, unpopular social-engineering projects), we like what our government does.  Our society is completely melded to its entitlements. 

So the proposals of Bush and Gore to provide prescription drugs to the elderly fit quite nicely into the overarching scheme.  It is, after all, the business of the government to take from the young and give to the old.

Of course, some say this may cause a problem here and there when my generation (the boomers) begins to retire and to demand our entitlements from our children and grandchildren.  The continued aging of our population will pile ever-growing and ultimately unsustainable burdens on younger working people.

Consider, for instance, that a few decades ago every Social Security beneficiary was supported by more than 5 working Americans.  (It is important to realize that the notion of a Social Security “trust fund” is false – the Social Security system is actually a pay-as-you-go scheme).  Today there are only 3.3 working Americans supporting every retired beneficiary.  In 2040, however, when the number of beneficiaries will be twice what it is today, only 1.6 workers will be available to pay Social Security entitlements to each retiree.

Over the next several decades, even without the prescription drug plan (which will merely be massive if Bush gets his way, whereas it is likely to be the largest entitlement ever invented if Gore wins),  the White House projects that that older Americans will eventually consume nearly 85% of federal spending.  Our young families, a growing proportion of which are already going without health insurance even as large chunks of their paychecks are being confiscated to buy health care for their grandparents, will just have to buck up.

So you see, Bush and Gore are not proposing anything particularly radical here.  

09/25/2000

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