Terminus on the Road to Serfdom
by D.W. MacKenzie
Tuesday, November 30, 2010
Benjamin Franklin once remarked that the only certain things in life are death and taxes. Modern entitlement programs have created a situation in which efforts to avoid death will make tax burdens unbearable.
Boston University economist Laurence Kotlikoff estimates the current fiscal gap for the American government at $202 trillion. The largest items in this projection of federal obligations are the entitlements: Social Security, Medicare, and Medicaid. The tax burden of entitlement programs will skyrocket as 78 million baby boomers retire. Passage of Obamacare has only added to future tax burdens.
Is this $202 trillion figure real? Baby boomers believe so. Baby boomers have planned their retirements on the expectation that entitlement programs will cover a large part of their expenses, especially where future medical expenses are concerned. To younger Americans such a large overall federal debt must seem impossible. We can be sure that at some point taxpayers will refuse to support everything that the federal government has promised to fund through its programs and entitlements.
American taxpayers will simply not be able to afford the taxes required to fund projected federal spending. We will at some point have to control costs.