Busting the Safety Net PDF

The economic crisis hastens an entitlement crash.

By Charles Hugh Smith
March 01, 2010 Issue

Three decades ago, angst over the looming insolvency of Social Security reached fever pitch. President Ronald Reagan responded by grasping the third rail of American politics long enough to add decades to the entitlement’s solvency by increasing the taxes employers and employees paid and by incrementally extending the age of retirement from 65 to 67.

In the years since, the sprawling Medicare/Medicaid system has replaced Social Security as the emblem of impoverished entitlements. Despite duly repeated warnings that the program is unsustainable—or perhaps as a result of those constant cries of “wolf!â€