Why Spending Must Rise

link here to article

This article simplifies the issues. The US government is essentially an insurance company for the elderly with an Army. Federal spending is more than 50% on transfer payments to the elderly, which are mandatory under current law. More than half of discretionary spending is on defense. Non discretionary spending, which the House has been poking at is small potatoes but it provides red meat for its base that hates certain programs.

Payments to the elderly, under current law, must rise because of the inflating cost of healthcare and because of the shrinking ratio of younger workers to the elderly. Since we are unlikely to stop healthcare price inflation, or make big cuts in the military, we only have three choices: increase spending or cut benefits to the elderly unless we are willing to raise taxes

Many deficit hawks in congress and elsewhere do not really care about deficits. They are more concerned about tax policy and running campaigns. Most would like to cut taxes, for example Paul Ryan, but few are willing to tell the elderly that benefits must be cut. The House passed Ryan's plan that cut benefits surreptitiously but the GOP is walking away from the Ryan plan because the shell game has been exposed. Federal spending is likely to keep rising. We can pay for benefits with taxes or we can continue to run deficits.