Trouble Brewing

Last week in USA Today I read two different articles about entitlement spending by the Federal government. Taken together they painted a frightening scenario.

In the first article, it was disclosed that the average senior citizen received $27,289 in benefits from the Federal government in 2007. That is the combination of medical costs and Social Security combined. For the first time, medical spending outpaced Social Security. From 2000 to 2007, benefits increased 24%.

The second article was a short piece on Kathleen Casey-Kirschling. She is officially the vey first baby boomer, having been born one second after midnight on January 1, 1946. Having just turned 62, she has activated her Social Security, and has just received her first check.

So we have a combination of rapidly increasing costs per person for entitlement spending, and the start of a demographic bulge in the number eligible recepients. Put the two trends together and you have what I call "train whistles in stereo."

What do I mean by that expression, you may ask. Imagine you are standing in front of a railroad track. In your left ear you hear the whistle of an approaching train. In your right ear you also hear the whistle of an approaching train. Two approaching trains, one track. "Go fetch a cooler of cold drinks and set up the folding chairs, ma, there's gonna be a show. Um, mebbe you shouldn't set the chairs so close to the track."

The best part of one of the articles was the following quote: "We have a health care crisis. We don't have an entitlement crisis," says David Certner, legislative policy director of the AARP.

My reaction to that statement: "Where do they teach you to say things like that? Some Panama City 'hey sailor, want a hump-hump' bar? Go sell crazy somewhere else. We're all stocked up here." (Jack Nicholson, "As Good As It Gets")

Seriously, the AARP is a major lobbying group in Washington, and their public reaction to the predictable and wholly unsustainable rise in entitlement costs coming in the next few years is to stick their heads in the sand. Well, they've stuck their heads somewhere. Maybe not in the sand.