>Entitlement Spending: Options for reform

>Looks like the Heritage Foundation said it better than I ever could:

Heritage Foundation Paper

We have three bad options for dealing with the growth of mandatory entitlement (Social Security, Medicare, Medicaid) spending:

1. Increase taxes to 30% of GDP (from about 18% today). This means a 25% payroll tax instead of 12%, marginal income tax rates in the 40% range for everyone, or perhaps a new 20% sales tax on *everything*. (estimates mine)
2. Allow the “big 3” and interest to become the only thing the federal budget spends money on (goodbye: defense, education, highways, bridges, food safety, everything)
3. Explode the deficit to the point that we spend 50% of GDP on interest. This assumes we can find someone dumb enough to lend us 500% of GDP.

They left out everyone’s favorite: Hyperinflation! Though I don’t think that helps because the entitlements are indexed to inflation. Dammit. Would have been worth it to take my social security check to McDonalds and having to shop off the $10,000,000 menu (what a bargain!).

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About perkinsms

I'm an engineer and father interested in transit, parking and economics.
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