The Entitlement State Dilema

After watching Paul Ryan’s recent campaign speeches on Romney’s plans for medicare, I do not hear a real solution to the medicare issue. What the Republicans need to do is come up with reasonable and arguable ideas against not only Obama’s Affordable Health Care Act, but solutions that will actually reform and phase out our medicare, medicaid and social security systems altogether.  However unpopular this notion might be with some groups like the poor and elderly, clearly articulated solutions need to be expressed and offered as a real alternative to not only Medicare but to all entitlement programs.

Paul Ryan talks about Obama’s Affordable Health Care plan as stealing 716 billion from Medicare to fund ObamaCare, however, this does not describe the real problem. The actual problem is that the entire entitlement program will consume 100% of GDP by 2024 (this is a conservative estimate, it likely will be sooner.)  Which is to say that in 12 years your children and grandchildren will be left with nothing but a huge amount of debt, no plan on how this debt is to be paid back and no solution to their own health care and retirement issues.

What needs to be understood is WHY our entire entitlement system is broke and what possibilities exist to replace it with something that works not only for the retired and about to be retired generation now, but the future population which will inherit the mess we have found ourselves in. The most important thing we need to do is offer our young people a way to start making choices about how best to prepare for their future and how to pay for it.

“When fully retired, 78 million baby boomers will collect, on average, more than 85 percent of per-capita gross domestic product ($40,000 in today’s dollars) in Social Security, Medicare and Medicaid benefits. Each passing year brings these outlays one year closer, which raises their present value,” states Laurence Kotlikoff, in the Bloomberg article titled Blink! U.S. Debt Just Grew by $11 Trillion.

So what is the answer? Is there anything that can help this country get back on track and lead us toward a new Renaissance? What ideas and principles are consistent with freedom and individual rights? Will these ideas free us from this heavy burden of government which is quickly taking away or freedoms, individual rights, and our ability to produce and keep the fruits of our labor?

The video posted below will help to understand what caused the problem, how the big the problem actually is, and what we can do to fix it.

A summary introduction to the video reads: “It’s an open secret that America’s entitlement state is in disarray, and that the United States faces a crushing debt, thanks to programs such as Social Security, Medicare and Medicaid. But according to Ayn Rand Center fellow Don Watkins, that’s not the biggest problem with entitlements.

In this talk, you will discover the unknown history of life in America before the entitlement state, and discover the surprising reason why the United States went from a limited government to an entitlement nation. In the process, you will find out why all of the usual solutions to our entitlement crisis cannot work—and what kind of solution can work.

Mr. Watkins delivered this talk on February 21, 2012, in Chicago, Illinois, as part of the ARC Speaker Series. (If you want to skip the introduction, start video about 6 minutes in.)

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