After the application process, the nerve-wracking job interview, and a tour of the facility, the lucky few reach the awkward yet critical negotiation over compensation. No matter how much you might enjoy working, there are student loans, utility bills, and grocery bills to pay and a future for which to save.
Roughly 140 million taxpayers in the United States trade their irreplaceable time for a little bit of money. But every potential employee is really negotiating on behalf of an entire team of silent partners who benefit from her paycheck but do little or nothing to help earn that money. You can find a list of these interests on your biweekly stub. Every paycheck comes with a list of state, federal, and local governments that get a piece of the pie before the employee sees her first penny.
In the old days, we thought of the employee as the one “entitled” to her paycheck. Now the word “entitlement,” refers to the interests positioned by law to have dibs on the fruits of her labor before she is permitted to stretch the leftovers to cover her needs.
She makes the car payment, tolls, gasoline, and insurance that make it possible to get to work. She continues to pay the student loans that made it possible to specialize in a more highly-compensated field. She buys the clothes required to meet the workplace dress code.
Entitlements are eating our country from the inside out. Every time entitlements go up or a new entitlement is offered, it increases the burden on the taxpayer while reducing the incentive to support oneself.
Obligations of Entitlement
At every turn she strives and invests to win a greater return on her finite time. And every success is met with a higher “progressive” claim upon her income. The root of the word “progressive” sounds like progress. Yet progressive taxation has the opposite effect on her effort to make progress in her own quest for financial security.
Each of these taxpayers shoulders a staggering federal “entitlement” obligation. The mandatory budget will cost $2.841 trillion in fiscal year 2020. “Mandatory,” means that nothing she does at the ballot box can relieve her burden. “Mandatory” means that a stranger is entitled to her part of her paycheck for his health care, retirement benefits, and interest payments on debts.
Her “fair share” of the cost of entitlements and interest on debt works out to over $20,000 per taxpayer per year. It might be more than she can devote to her own healthcare, retirement savings, and service on debt. What could she have done with that money? A college savings plan? Replace the rotting siding on her house? Have a baby?
Entitlements are eating our country from the inside out. Every time entitlements go up or a new entitlement is offered, it increases the burden on the taxpayer while reducing the incentive to support oneself. One can imagine a team of taxpayers yoked to a wagon pulling an ever larger host of passengers. From time to time the problem gets worse when another taxpayer shrugs-off the yoke to get in the wagon.
Government appropriation of taxes to make something affordable invariably leads to the opposite effect. Obamacare became necessary because the other government programs of Medicare and Medicaid placed so much demand pressure on healthcare that costs soared. Obamacare simply accelerated the problem further leading some to call for a tripling down of government intervention to stabilize prices.
Education costs similarly skyrocketed because the government strove to make it affordable. Yet where the government has failed to act to make things affordable, prices remain relatively stable or even drift downwards over time (think cell phones, cars, televisions, clothes). Thank God nobody declared my cell phone a “right,” or I never would be able to afford one.
No Limiting Principle
Is there any moral maximum to entitlement to other peoples’ paychecks? In many states, the many taxing governments devour paychecks with a total tax burden of over 50 percent for some. We expect all things to get more efficient and cost-effective over time as advancements in technology and production techniques allow us to do more with less.
Yet with all of these advancements, the government seems unable to stop its cancerous growth as it consumes more and more. The recent failure of our richest state to build a simple rail line connecting Los Angeles and San Francisco is a sign that government increasingly does less with more.
Let’s stop asking what the government “needs.” Let’s first ask, what does the taxpayer need to survive and pay bills? Instead of asking the taxpayer to give up one more thing, we should consider calling upon the ocean of bureaucrats and entitled to make some small sacrifices.
Something must be done to curtail the runaway entitlements in America or something will be done in the form of a sudden and violent collapse of our entire system. Calling something an “entitlement,” is not a substitute for math. The current debt is over $22 trillion or an astonishing $158,000 per taxpayer. Consider also that the average taxpayer makes a scant $50,000.
At some point, the people lending money to the United States will notice that the debt exceeds what the U.S. taxpayer could ever reasonably be expected to pay back. Just a few brief hesitations in auctions of U.S. treasuries could send real interest rates on the debt higher. A higher interest rate could start a vicious cycle making the existing debt too expensive to maintain.
Imagine a consumer drowning in credit card debt. The worse it gets, the higher interest lenders charge making the situation even more inescapable. It seems impossible that the world could lose confidence in the U.S. creditworthiness because it’s never happened in living memory.
But it can happen and our vacation from the laws of economics will someday end. And when it does, the “rights” to healthcare and a free education will become as worthless as they are in places like Venezuela.