Less Government, Much Less Government

That's quite a list of tasks the GAO sent to President-elect Obama (as if he needed reminding), but as U.S. Politics Guide Kathy Gill noted, it failed to include trimming down the massive and ever-growing national debt. Maybe GAO has given up on the debt. You can hardly blame them, when you consider the sobering... nay, shocking fact that the 2008 Social Security and Medicare Trustees Report shows that Social Security and Medicare alone currently have a combined unfunded liability of $101.7 trillion.

The unfunded liability is the difference between total benefits to be paid, and the total projected collections in taxes and Medicare premiums. And, oh by the way, that $101.7 trillion unfunded liability is more than seven times the size of the U.S. economy and 10 times more than the national debt. Can anything be done? Oh yes, but it won't be fun.

Without some highly unlikely program reform created and implemented with Solomon-like wisdom, there are really only two ways the government can deal with the unfunded liability and keep Social Security and Medicare afloat. They can either increase revenue -- raise taxes -- or cut out other programs. Since nobody who plans on getting elected or re-elected wants to raise taxes, a loss of government programs seems to be in our future.

How bad will it get? How many current government programs and services might be eliminated? In its report, Social Security and Medicare Projections: 2008 (.pdf), the National Center for Policy Analysis (NCPA) suggests that without raising taxes or massive reform of entitlement spending programs, this could happen:

• By 2010, the federal government will stop doing 1 in 10 things it's doing now.
• By 2020, the federal government will stop doing 1 in 4 things it's doing now.
• By 2030, the federal government will stop performing half of the services it provides.
• By 2050, Social Security, Medicare, and Medicaid will consume nearly the entire federal budget.
• By 2082, Medicare spending alone will consume nearly the entire federal budget.

How should you prepare to deal with this possibility of life with much less government? Addison Wiggin, coauthor of the suddenly popular book-turned-movie I.O.U.S.A. suggests, "For their part, individuals need to save more, invest wisely, expect less from the government, and be willing to pay for the services they do expect."

I told you it wouldn't be fun.

Also See:
Transition Time! Presidential, That Is
Did Bailed Out Banks Trick Congress?