A new book due out in October writes about the effect entitlement spending has not just on the U.S. economy, but also on the character of the nation.
“A Nation of Takers: America’s Entitlement Epidemic,” is written by political economist Nicholas Eberstadt and published by Templeton Press.
In a recent article in the Wall Street Journal (Aug. 31), Eberstadt says that entitlement spending has increased 727 percent in the last 50 years, and that’s after adjusting for inflation and the increase in population.
“The magnitude of entitlement outlays today is staggering,” he said. “In 2010 alone, government at all levels oversaw a transfer of over $2.2 trillion in money, goods, and services to men, women, and children in the United States. The burden of entitlement transfers came to slightly more than $7,200 for every man, woman, and child in America.”
According to the U.S. Census Bureau, just over 49 percent of U.S. households were using at least one government benefit to help support themselves in early 2011.
In 1960, entitlement program transfer payments accounted for well under a third of the federal government’s total outlays. But over subsequent decades the share of entitlements in total federal spending suddenly soared up from 28 percent to 51 percent. By 2010 this share accounted for about two-thirds of all federal spending, with all other responsibilities of the federal government making up barely one-third.
Eberstadt points out that America’s defense spending of just 4.8 percent places a smaller burden on America’s economy now than almost any point in the Cold War.
The overall structure of government entitlement spending falls into six categories: income maintenance, Medicaid, Medicare, Social Security, unemployment insurance, and all the others.
Poverty- or income-related entitlements, including health-care services (Medicaid), accounted for over $650 billion in government outlays in 2010. Entitlements for older Americans – Medicare, Social Security, and other pension payments – worked out to about $1.2 trillion.
The most astonishing growth of entitlements has been for healthcare guarantees based on claims of age (Medicare) or income (Medicaid), Eberstadt said. Until the mid-1960s, no such entitlements existed; by 2010, these two programs were absorbing more than $900 billion annually.
In addition to the strain on the economy, Eberstadt writes that the adverse influence of transfer payments on family values and family formation in America is critical.
Studies showed “that the perverse incentives embedded in federal-family support policies were actually encouraging the proliferation of fatherless families and an epidemic of illegitimacy,” he wrote. The payments were “a vehicle for financing single motherhood and the out-of-wedlock lifestyle in America.”
Manhood was also directly attacked. “Before the age of entitlements, self-reliance and the work ethic were integral and indispensable elements of the ideal of manliness in America.”
Eberstadt also claims that the entitlement system draws millions of people into a lifestyle of lying and cheating. He doesn’t just blame the claimants of the disability pay, but says the doctors and health care workers that allow this are “collaborators,” as is the U.S. judicial system. He calls American voters and politicians “willing and often knowing enablers.”