A Reason To Care

One would think that by now, given all the statistics that have been compiled and predictions that have been made on the subject, Washington politicians would have realized that Social Security, Medicare/Medicaid, and Welfare reform is an issue that needs to be brought to the forefront and dealt with immediately. Sadly, of course, they haven't, and our oversized, bloated federal programs remain on track to create a fiscal catastrophe in the not-so-distant future.

Thankfully (or rather, frighteningly), we have evidence of what will happen if we continue down this path towards Democratic Socialism. The evidence, of course, is Europe. We have the high unemployment rates in France and Germany, the horrors of Britain's National Health Service, and the stagnated growth rates in Scandinavia, all of which, understandably, should warn us of the perils of Democratic Socialism. Even more frightening than the consequences of such programs, however, are the solutions that one must implement if one refuses to downsize or privatize these massive programs in the face of a rapidly ageing population. The obvious one is to increase the tax burden on the young and force them to finance the handsome pensions of their parents' and grandparents' generations; and in Britain, that's exactly what they've decided to do.
This article, from The Times, reports a shocking new statistic: that British college graduates could lose up to one-half of their starting salary to taxation. What a terribly large amount of money to have removed from one's paycheck to help finance government welfare programs - but, unfortunately, this is what has to happen in Britain. With declining birthrates, increased spending on welfare programs, and increasing longevity, increasing taxes on the young is one of the few ways to make the numbers work. The reason is simple; one of the most profitable taxes, from a government perspective, is the income tax - and old people don't work! So, youngsters will begin to see less and less of their paychecks if the system is to be maintained.

There is, of course, another downside to this that any good supply-sider will have already recognized; and that is that drastic tax increases on your workers' paychecks translates into less disposable income. This, in turn, means that people will be less likely to spend money and contribute to the overall economy. In other words, as President Reagan proved, higher income taxes means less overall economic productivity and an all-around, weaker economy.

And that brings me back to the United States, a country where we still have the pleasure of deciding whether we want our future to be like Britain's (or France's, or Sweden's....) or if we want it to be, well, as American as it's always been.

It's hard to talk about things like privatizing Social Security; or to tell our Senior citizens that they just might have to endure a benefit cut; hell, these days it's becoming hard to simply oppose, outright, all forms of socialized medicine; but at the end of the day, these are the things that we need to talk about - and must do. Especially considering that the alternative is figuring out how to distribute a massive tax burden.