(A) Fiscal Policy

By Phil Gramm and John Early – Spending on Medicaid, Internal Revenue Service cash welfare payments (refundable tax credits) and the Supplemental Nutrition Assistance Program (food stamps) has grown in inflation-adjusted dollars by 671%, 1,463% and 289% respectively since 1990. By contrast, total real Medicare, Social Security and defense expenditures have grown by 383%, 186% and 38% respectively. Medicaid absorbs seven times as much general revenue as Social Security—more than Social Security and Medicare combined. Read More

By Joseph C. Sternberg – The truth is much more complex, and politically challenging: While some other economies suppress domestic consumption and subsidize export production, Americans choose to do almost exactly the opposite. Through political choices such as suppressing energy production and distribution, or permitting red tape and the like, or any number of other policy foibles, we make it much harder than it otherwise would be to produce things in the U.S. Meanwhile, you can’t take a step in America without tripping over a consumption subsidy.

Most glaring, though, are our entitlements. Social Security, Medicare and Medicaid, not to mention a raft of other benefit programs, funnel vast quantities of money into consumption. The trick here is that we’re able to finance these via chronic fiscal deficits funded by foreign investors, meaning at the margin Americans borrow from the rest of the world at ultralow interest rates and funnel the cash into consumption at home. Read More

By Phil Gramm and Jodey Arrington – Means-tested social-welfare spending totaled $1.6 trillion in 2023. Welfare spending now absorbs an astonishing 72.6% of unobligated general revenue (total revenue net of Social Security and Medicare payroll taxes and premiums and mandatory interest on the public debt) and is larger than the claims against unobligated general revenue by Social Security (4.1%), Medicare (23.5%) and defense (37.2%) combined. Read More