How to Solve America’s Spending Problem|5 Minute Video
Everyone grumbles about America’s financial obligation, and appropriately so, but how do we leave it? As Cato Institute’s Michael Tanner discusses, spending on entitlement programs– Social Security, Medicare and Medicaid– has actually taken off in current decades. We should slow their growth or they will soon swallow the whole federal spending plan. In five minutes, find out how America can protect these programs and leave debt.
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Script:
Both Democrats and Republicans grumble about America’s national financial obligation, what a looming crisis it is, and how we need to throw down the gauntlet. And well they should. The numbers defy understanding.
Currently, the debt stands at around $17 trillion dollars, much of that coming in simply the last few years. To put it simply, our government invested $17 trillion dollars more than it took in.
That’s one huge deficit, wouldn’t you say?
How did it take place?
To respond to that, we have to concentrate on three programs: Social Security, Medicare and Medicaid.
Social Security is a government pension program for individuals over 65; Medicare is a federal government health insurance program for people over 65; and Medicaid is a federal government health assistance program for people who can’t afford to purchase insurance coverage.
The debt photo has undoubtedly become a little bit more complicated– and more severe– since of the huge increases in government spending on unemployment benefits and other federal assistance programs connected to the 2009 recession. But the big three – Social Security, Medicare and Medicaid – stay at the center of the issue. In reality, costs in every other location, including defense, all other appropriations, and other federal privileges, though significant, make up a smaller sized share of the economy than has historically held true.
These three programs are not brand-new. All three programs were greatly expanded in 1972 during the Nixon Administration.
Just how much more? Just listen to these numbers from the Congressional Budget Office: In 1970 these three programs accounted for 21 % of all federal spending. By 2012 they represented 42% of all federal spending. And now we’ve added a fourth new Federal help program, the Affordable Care Act of 2010, otherwise referred to as ObamaCare.
Just to offer you one example, Medicare Part B, the part of Medicare that covers physicians’ services, was initially forecasted to cost $500 million dollars a year. In 2012 it cost $164 billion.
Whatever you think of the value of these programs: How are we going to spend for them?
The Congressional Budget Office tasks that before today’s 25 years of age are all set to receive Medicare, these 4 programs– Social Security, Medicare, Medicaid and the Affordable Care Act– are anticipated to cost more than all the cash the federal government collects in taxes. That would mean we would have to borrow money to spend for whatever else– our militaries, road repair, everything.
So, what do we do?
Well, we could increase taxes– enormously. But to raise the sort of cash we ‘d requirement, we ‘d have to substantially increase taxes on everyone, specifically the middle class. That suggests taking a lot more cash out of your paycheck and mine. Due to the fact that if you think we could get what we need from the abundant, think again. If we took all the profits of individuals who make more than a million dollars, a 100% income tax, that would just net us a little bit more than $600 billion dollars. And undoubtedly, we might only do that only as soon as.
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As Cato Institute’s Michael Tanner describes, spending on privilege programs– Social Security, Medicare and Medicaid– has exploded in recent years. In five minutes, learn how America can maintain these programs and get out of financial obligation.
The financial obligation image has admittedly end up being a bit more complex– and more severe– due to the fact that of the enormous boosts in federal government spending on unemployment benefits and other federal help programs related to the 2009 economic downturn. Simply listen to these numbers from the Congressional Budget Office: In 1970 these 3 programs accounted for 21 % of all federal costs. And now we’ve added a fourth new Federal support program, the Affordable Care Act of 2010, otherwise understood as ObamaCare.
