A Huge Problem Requires a Bold Solution pt. 2

ENTITLEMENT PROGRAM - A federal program that guarantees a certain level of benefits to persons or other entities who meet requirements set by law, such as Social Security, farm price supports or unemployment benefits. It thus leaves no discretion with Congress on how much money to appropriate, and some entitlements carry permanent appropriations.

Since 1970, the historical ratio between defense spending and entitlement spending on Medicare, Medicaid, and Social Security has flipped. In 1970, total defense spending was 8.1 percent of our economy or Gross Domestic Product (GDP) — more than twice the 3.8 percent of GDP spent on the big three entitlement programs.

Today, the core defense program has fallen to 3.9 percent of GDP, while entitlement spending has more than doubled to 9.6 per cent of GDP. By 2030, the big three entitlements will absorb roughly 81 percent of all federal revenue if taxes are rightly held at historical levels. This crowds out defense and homeland security spending and threatens the historically low-tax, high-growth U.S. economy.

I do not think the entitlement mindset can be changed in the US citizenry. It is a pipe-dream to imagine privatizing social security and medicare. A more local government can take on these responsibilities, and be acceptable to the citizenry. It has to be a government with the taxing and mandating authority. A private business can only set fees and rules for their business. It does not have any authority to tax an individual.

Break up the responsibilities for SSI, MediCare, Medicaid, SCHIP, and Food Stamps into ten independent entities plus the US HHS that will be limited to only responsibility for DC and federal territories. The existing revenue is divided per population size of each entity. This is not privatizing current federal programs. It is putting the control of these programs out of the hands of the US Congress and into the hands of a more local government. This would get the US Congress to adhere to the intent of the Tenth Amendment. I suggest ten instead of fifty to allow the less populous states to band together and get an adequate revenue stream for this kind of undertaking. This also allows additional discretion for each of these ten entities to decide what is the best for their region independently of each other. If the revenues are not in the US Treasury General Fund, then the US Congress can’t get their greedy paws on it.

I devised a list of new HHS departments and the percent of the US Treasury dollars currently marked for these federal entitlement programs. Each of these ten departments could independently determine eligibility and tax rates for the citizens in their region.

Earlier I wrote about the need to scrap the current labyrinth of US tax code to protect the US economy. That would be an easier task than completely scrapping entitlements. This is why I suggest a solution of putting the command and control of entitlements in the hands of a more local government instead of the federal government. Let me know your thoughts and opinions, and offer your own solution if you hate mine.

Southern Pacific HHS
CA
HI = 10.5%

Northwest HHS
AK
WA
OR
NV
ID
MT
WY
UT
ND
SD = 8.5 %

Southwest HHS
AZ
CO
NM
TX = 10.5%

Great Plains HHS
NE
KS
OK
MN
IA
MO
AR = 9.5%

Great Lakes HHS
WI
IL
IN
MI = 10.5%

Deep South HHS
LA
MS
AL
GA
FL = 11.5%

Mid-South HHS
KY
TN
SC
NC
VA = 9.5%

Mid-Atlantic HHS
OH
WV
PA
MD = 9.5%

New York - New Jersey HHS
NY
NJ = 7.5%

New England HHS
CT
DE
RI
MA
VT
NH
ME = 7.5%

US Federal HHS
District of Columbia
Puerto Rico
Northern Mariana Islands
US Virgin Islands
American Samoa
Guam
US Minor Outlying Islands = 5%