The US entitlement crisis is caused by the shortfall between the cost of programs like Social Security and Medicare and the available funds. The crisis could lead to some programs being cut, and if not resolved soon, only a few programs will be financed. Some suggest raising taxes and scaling back government programs to solve the problem. The crisis is caused by overspending and a bad government budget, and changes need to be made to remedy government spending before it’s too late.
The US entitlement crisis refers to the shortfall between what programs like Social Security and Medicare will require versus the amount of funds available. This means that the cost of these programs will be higher than what is in the federal budget. Government officials have not yet figured out a long-term solution to the problem, although some have suggested raising taxes on some goods and making it more difficult for some government programs to be accepted.
Most agree that the rights crisis is the result of a bad government budget and overzealous spending. Programs like Medicaid have been expanded, and overspending is a major problem within government. This resulted in a much higher national debt. These factors, combined with the housing crisis and government bailouts, can lead to some programs being scaled back or cut altogether.
Studies have shown that if the entitlement crisis is not resolved soon, in 15 years the only programs that will be able to be financed will be Social Security, Medicare, Medicaid, federal employee retirement and national debt interest. Other programs would have to be cut or financed through deficit spending. One of the main reasons for the entitlement crisis occurring during this time frame is that approximately 78 million baboomers will reach retirement age during this time period.
While many agree that the rights crisis is a huge problem for the American economy, others believe the problem has been blown out of proportion. Some even go as far as to say that it is a sham used to raise taxes and scare the public out of their money. While this may be false, it is possible that the state of the US economy is not in as dire shape as some analysts claim. Only time will tell how hard the rights crisis will hit.
There is no debate, however, that the US economy is in a difficult position. To stop a crisis, now or in the future, changes must be made to remedy government spending. Raising taxes to pre-tax rates would also allow for more breathing room, along with scaling back many government programs.
If nothing is done and lawmakers continue to turn a blind eye, the impending economic crisis could bear many similarities to the one that began in 2007. Fortunately, the current problems are not insurmountable and changes in social security and health care can be made in so that both programs can be sustainable. These changes need to be implemented sooner rather than later, though, before it’s too late.
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