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Entitlements Swallowing Up Federal Budget

The news today has been all health care, all the time. And understandably so. But amid the laser-like focus on the Supreme Court ruling  upholding President Obama’s new health care system, it is important not to lose sight of the bigger picture. Health care is merely the latest in a long line of social welfare expenditures, going all the way back to Social Security, Medicare and Medicaid, which have swallowed up an ever-growing share of the federal budget—and the national economy.

As this useful Heritage Foundation chart shows, entitlement spending first exceeded defense spending in 1976. Ever since, the trend has been getting more lopsided with entitlements taking up ever more of the economy and defense ever less. That gap has become especially pronounced since President Obama took office in 2009. The percentage of GDP going to the federal government grew from 20.7 percent in 2008 to 25.1 percent in 2011 before dipping slightly to 23.2 percent this year. Meanwhile, the state governments are taking another 15 percent, which means that as a total share of the economy the government is now consuming roughly 40 percent, and of that, less than five percent is going to the military.

We are, in short, becoming more like Europe—and not just because it’s now possible to get tasty croissants and frothy cappuccinos on this side of the Atlantic. In Europe, governments now consume more than 50 percent of GDP. Hence, it is no surprise that few European states are spending even as much as two percent of GDP on defense—the baseline established by NATO for its member states. The Europeans simply can’t afford to spend more on defense without cutting back social welfare programs, which the political class cannot do because it sparks riots in the streets.

This is where we are currently heading—and if ObamaCare survives political as well as legal challenges, with its estimated cost of more than a trillion dollars, we will arrive at this destination all the more quickly. We will simply not be able to pay for our defense as we have been doing. And that will be a calamity. The Europeans could afford to stint on their defense because we protect them. But who will protect us?


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