"Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET.
By Fareed Zakaria
In 1900, 1 in 25 Americans was over the age of 65. In 2030, just 18 years from now, 1 in 5 Americans will be over 65. We will be a nation that looks like Florida-I don't mean the strip malls, I mean demographically. Because we have a large array of programs that provide guaranteed benefits to the elderly, this has huge budgetary implications. In 1960 there were about five working Americans for every retiree. By 2025, there will be just over two workers per retiree. In 1975 Social Security, Medicare and Medicaid made up 25 percent of federal spending. Today they add up to a whopping 40 percent. Within a decade, they will be over 50 percent.
Now, we've gotten away with these huge new costs so far by borrowing heavily, for decades. But debt is now 100 percent of GDP and surely that can't keep going up for ever. The Peter G. Peterson Foundation calculates - using Congressional Budget Office numbers - that by 2040 we are likely to spend 10 percent of GDP on interest payments alone (we pay about 1.4 percent today). That is four times what we spend on education, infrastructure and scientific research put together. Now, since entitlements-social security, Medicare and defense spending have powerful interest-group support, what's going to happen is, everything else, all other federal spending will wither. So the left has to ask itself why is it tethered to a philosophy that insists that government's overwhelming responsibility is for pensions and health care even when, as an inevitable consequence, this will starve the other vital functions of the state. Is insurance for the elderly the only important function of government?
Above education? Above scientific innovation? Above investments in infrastructure and energy? Above poverty alleviation? And yet that is the direction we are headed.
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