Tuesday, June 05, 2007

Overstretched at Home

Niall Ferguson argues it is not our Wars which is bankrupting America, but Welfare(quotes from Robert D. Hormats book "The Price of Liberty):

Just consider the long-run U.S. defense budget as a percentage
of GDP. In the 1960s, it averaged 8.4%; in the 1970s, 5.6%; and in the 1980s,
5.7%. Under President Bush, however, it has averaged 3.6%. We flatter al Qaeda
when we bracket it along with the Red Army.

The fiscal problem today, as Mr. Hormats acknowledges, is
not so much national security as Social Security--to say nothing of Medicare and
Medicaid. Between them, these are the programs that threaten to undermine the
long-term fiscal health of the U.S. as the baby boomers retire. In other words,
the danger today is not external but internal overstretch.

The numbers, which I figured in a similar article (Why can't the West Rearm?) is America spends 21% of national wealth on the federal government. Using the numbers given above, 17.3% of the budget is for social spending. This is tyranny of another sort.