What We Owe

I need something quick, and this'll fit the bill quite nicely: if we do not abolish and/or privatize the entitlements monster, we will owe ourselves $65.9 trillion. Expressed another way, that's $65,900,000,000,000.

Too big to mean much in practical terms, isn't it? Well, Laurence Kotlikoff of the St. Louis Federal Reserve branch takes a stab at it:

This figure is more than five times U.S. GDP and almost twice the size of national wealth. One way to wrap one’s head around $65.9 trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143%.

David Frum adds that the Wall Street Journal op-eders have a rebuttal coming. When I find it, you'll get it.

All I'll say now is what I've been saying for years: It's like the old Autolite commercials where the mechanic, in a rare moment of candor (for a mechanic), shrugs and says, "You can pay me now....or pay me later."

And the ounce of prevention will be far more palatable than the pound of cure.

UPDATE: Okay, it's a different update, but it provides the proverbial other shoe to my close just above:

Trying to cut entitlement spending goes against human nature, which is focused on the short-term. A person who eats too much knows that it may lead to health problems down the road, but those potential health problems aren't yet real, while cheeseburgers, fries, and hot fudge sundaes are delicious and offer immediate gratification. Fiscal conservatives showing Americans charts projecting what's going to happen ten or twenty or forty years from now is not as compelling as media stories about seniors being thrown into the gutter.

I don't see that dynamic changing until an economic disaster results from entitlement spending. At that point, entitlement reform no longer becomes just a responsible long-term thing to do, but it enters Americans' short-term radar, just as terrorism did after 9/11.

President Bush actually tried for Social Security reform a year ago - passively and ineptly by giving the Democrats a pre-emptive veto over even his own submission of a private accounts plan - but it was a good faith attempt nevertheless. It went nowhere because, absent presidential leadership, the congressional GOP wouldn't leave the tall grass to take up the slack. Now that Republicans are back to being their normal timid, squishy, RINO selves, and also recalling what happened to them a decade ago when Newt Gingrich tried to reform Medicare, it's difficult to see the current majority venturing out on that limb again any time soon. And given the how close the time horizon of the entitlements crunch is getting - roughly a decade until just Social Security starts hemorrhaging, another decade after that until it's broke, and Medicare is in even worse fiscal shape - that was probably the last chance to avoid a second crash and Great Depression.

The terrorism comparison is apt. It's human nature to see only what you want to see and studiously avert your gaze from everything else. An entitlements-driven economic collapse is actuariliy inevitable, but it's still an abstraction, just like a 9/11 scenario was before the towers fell, or an Iranian EMP attack is today. One that people prefer to deny, because to acknowledge it would require them to accept remedies that they don't want face, even though the day of reckoning will not land on a future generation but smack dab on this one.

We can only kick the can down the road so far. Then comes the brick wall, in whose shadow we already tread. It has sixty-six trillion bricks in it, which means no climbing over and no going around. Will we reverse course or will we stubbornly try to run through it and make it fall on us?

Who says my retirement years won't be entertaining?