U.S. Government Entitlements Are the 6th Largest Economy On Earth
It’s hard to be optimistic about starting a business, buying a house, or even moving out of your parents’ house with such high costs and an uncertain future for the economy. Consider the fact that under our “improving” environment, we now have 40% of young people aged 18 to 34 years old living at home with their parents. This is a 75-year high.
There is this endless degradation of our core infrastructure that is rapidly getting worse as the government continues to expand much faster than the private market. U.S. government entitlements are now the sixth largest economy on earth. That’s a total cost of $3 trillion per year.
Because the Main Street economy is failing, the nation’s entitlement rolls have exploded. About 110 million citizens now receive some form of means-based benefits. When Social Security is included, more than 160 million citizens get checks from Washington.
The fundamentals are horrible, and the government is expanding out of control. President Obama will set a record for the size of the basic federal workforce, leaving office with more than 1.4 million people collecting government salaries in civilian agencies in 2017, according to the budget he delivered to Congress.
Take a look at government growth as compared to private sector growth.
The public sector is outpacing the private sector by almost 100%. As an Austrian economist, you have to believe that a rapidly expanding government is bad for the country’s prosperity. And presumably, the more people get dependent on the government, the more their vote is compromised.
Sadly, both major parties are at fault for expanding government debt. I suppose one of the good things about Bernie Sanders was that he seems to be honestly saying flat-out that he plans to massively increase the size of the government.
We know what we were getting right from the get-go.
If we look at federal spending, though, it’s easy to see that the myth of the budget-cutting Republican president is just that: a myth.
To the extent of whether or not we will see Trump actually shrink the national deficit, that is yet to be determined. Even if Trump is successful in leading us towards a more competitive economy, with a tax-friendly environment to attract capital, we may not see the positive effects of his actions for years to come, because positive and negative impacts on the economy take years to play out.
The latest left-wing trend is to hate on the electoral college. Although it is ludicrous for the same party who elected their candidate through Super PACs to be complaining about the population not being represented, it is very unfortunate that the role of government has become so powerful that its policies truly are a nuisance for Americans. It is very contrary to the small role for the Federal Government that the founding fathers had imagined and specified when the country only had 30 million people.
Now, there are north of 300 million people, and the Federal Government is wilder than ever.
This is going to perpetually get worse, and all I can offer as a suggestion to you is to be self-reliant and not be dependent on the government. If you are in your 40s or younger, don’t be depending on a retirement safety net to bail you out when you are older. I know you are paying into Social Security and all through your taxes, but the fact is the numbers don’t add up, and while I don’t see current seniors and those approaching retirement being affected in the short-term, I believe those further down the line are going to see massive cuts to this unsustainable, failed government entitlement program.
If you care about your future and the life you want to live, you have no other choice but to be prudent with your money.