January 31, 2018

Entitlement Spending Explodes

Over time, federal government spending has increased, but not all parts of federal spending have grown evenly. Measured as a percentage of GDP, the costs of Social Security, Medicare, and Medicaid have risen. Meanwhile, the ever-increasing portion of federal revenue devoted to entitlement programs puts financial strain on other government programs. The combined total of all other government spending has fallen to record lows as a percentage of GDP, and the Congressional Budget Office projects that this pattern will continue if Congress stays on its current fiscal path.

As the data show, major entitlement programs have been and will continue to be the drivers of our future debt. One of the main consequence is the sharp increase in interest payments as a share of GDP.