Fareed Zakaria on America’s grim budget outlook.

Columnist Fareed Zakaria has an excellent article about how we’re doing exactly the wrong things needed for long-term economic growth. We’re cutting investment when we should be increasing it and we’re not touching entitlement programs that could use some reform.

But the part that really caught my eye was this bit on the disparity between what we spend on children versus the elderly:

As countries get rich, you might assume that they focus greater attention on their children. Not in the United States. The federal government’s expenditures on children have shrunk as a share of the budget over the past 30 years. In 1960, about 20 percent of the federal budget went to programs dedicated to the health, development and education of Americans under the age of 18. Today it’s 10 percent and falling.

By contrast, spending on the elderly has skyrocketed, doubling as a percentage of the budget during that time. Spending on Social Security and Medicare alone makes up close to 40 percent of the budget. In a decade, that share will rise considerably, perhaps to as much as half the federal budget. Whatever the exact percentages are – what you define as programs for children and the elderly can vary – the conclusion is clear: The federal government spends between $4 and $5 on elderly people for every dollar it spends on children.

Why is this happening? To put it bluntly, children don’t vote or make campaign contributions, and the elderly do both aggressively. Our political system is hyper-responsive to votes and money, so the natural consequence is that those who organize, vote and send in dollars are looked after. Maybe we need to let toddlers form PACs.

via Fareed Zakaria – America’s grim budget outlook.

The whole article is worth a read and I encourage to check it out.

6 thoughts on “Fareed Zakaria on America’s grim budget outlook.

  1. This came up the other day over beer with a bunch of Generation X&Ys. The general feeling is something anyone looking at retirement should be scared of.

    Though this is in New Zealand, our perspective will probably sound all too familiar to young American ears. Our parents generation grew up with burgeoning resources, free education, a booming economy, and then subsequently pissed it away by ripping out trade protections that kept our tiny corner of the pacific from being overrun with imports from larger nations, and selling off the government enterprises that was paid for with money borrowed from our future before we we could even drive.

    Basically, if you were born before 1970, you should scared, because my generation is inheriting a world of shit from the baby boomers, and now that we’re having children, we care far more about their future than whether or not our parents get to hang on to their four houses that we can’t afford to buy anyway.

    Selfish? Perhaps. You have only have yourselves to blame – after all, you taught us so well.

  2. There’s a deep divide – more of a chasm really – between those who want to starve the commons and who want to invest in the next generation. I grew up believing that economic growth if only meaningful if it builds a strong foundation for our children – including my neighbor’s children. I have a neighbor my age who would cut public funding for pretty much everything if he could. How that happened, I don’t know.

  3. The crazy thing is, even a high level manager at my company admitted you can’t stop spending money when the economy is in a downturn. He said, “You can’t save your way out of an economic downturn.” Granted he was speaking specifically about my company, but it makes a lot of sense to me.

  4. Unfair Edward. Those born before 1960 were the ones who put Reagan and Thatcher in

  5. Last Huassr: Yes. That is unequivocally true. New Zealand’s Prime Minister John Key and President Obama were born within a few days of each other in 1961, and wouldn’t have been able to vote till around 1979.

    Nonetheless, it’s been two to three decades since those changes were stuffed through, and the promised economic benefits of mortgaging our future seem to only flow to the richest in society. From where I’m standing on the South West corner of the Pacific Rim, Obama seems to be uninterested in changing the rising tide of financial-might-makes-right and John Key is actively working to advance it. From our perspective, it appears that having watched our parents generation endure the mistakes of the far right, they’re intent on reproducing them all over again.

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