Already, Social Security along with Medicare comprise about 40 percent of federal spending along with 8 percent of the economy. The only way for those numbers to go will be up.
In 2017, 45 million Americans receive Social Security retirement checks. By 2027 — the end of the 10-year period in which the budget might take in $1.5 trillion less — 60 million will receive them, the system’s trustees project.
that will rapid growth will continue into the following decade, when the last boomers retire. By 2033, 77 million Americans will be eligible for Social Security.
Because life expectancy keeps rising, a growing share of them will be over 85, the age group requiring the costliest health services under Medicare along with nursing home care under Medicaid. along with because those boomers had fewer children than their parents, the number of tax-paying workers supporting each retiree will drop by 2.8 to 2.1.
“Federal spending along with taxes will have to grow significantly,” writes Paul Van de Water, an analyst at the Center on Budget along with Policy Priorities. “This particular will be not a statement of political values. that will’s a reflection of basic realities.”
additional priorities require more federal money, too. President Donald Trump, many Republicans along with some Democrats say the Pentagon needs more money to keep up with global threats.
The president, many Democrats along with some Republicans insist America’s decaying infrastructure needs an upgrade. Those priorities involve long-settled federal commitments, not completely new programs.
“If we want to maintain traditional American values,” says former Treasury Secretary Larry Summers, “government will need to be significantly larger.”
The Trump administration, predicting tax cuts will set off an economic boom, dismisses the budget’s projected $1.5 trillion deficit increase as overly cautious accounting. Treasury Secretary Steven Mnuchin claims increased growth will create so much completely new tax revenue that will that will will reduce deficits along with help pay down the nation’s $20 trillion debt.
“that will’s going to be all growth,” Trump told a Fox interviewer last week. “that will growth can be staggering.”
Yet mainstream economists in both parties, citing evidence of recent decades, say growth won’t recoup all the lost revenue.
Greg Mankiw of Harvard, a top economic advisor to President George W. Bush, once described those who say tax cuts will pay for themselves along with more through growth as “charlatans along with cranks.” Glenn Hubbard of Columbia, another top Bush advisor, estimates that will individual tax rate cuts might generate enough to cover 30 percent of lost revenue, corporate cuts around 50 percent.
If so, GOP tax along with budget plans might require the government — already projected to borrow another $10 trillion over the next 10 years — to borrow even more as boomers draw their checks. If the economics profession proves more accurate than Trump, the national debt will grow higher as the economy grows, not lower.
One option, of course, will be for the government to reduce its obligations by cutting Social Security along with Medicare benefits. although Trump, appealing to his financially squeezed working class supporters, has ruled that will out.
The Senate last week voted to let tax cuts create higher deficits. If the House goes along, the GOP tax-along with-budget framework will rely on highly speculative revenue projections to finance spending obligations that will will keep growing as a matter of demographic certainty.
“This particular will be wishful thinking replacing responsible budgeting,” says Maya MacGuineas, who directs the nonpartisan Committee for a Responsible Federal Budget. “that will’s going to end us up which has a mountain of debt.”