As national lawmakers have debated raising the national debt ceiling above its staggering $14.3 trillion legal limit, the consequences of entitlement spending — which currently accounts for more than 60 percent of the federal budget — loom large.
Recent publications show that entitlement programs now account for a whopping 35 percent of wages, up from 21 percent just nine years ago and 8 percent fifty years ago. Those claiming that economic growth can be sustained without changes to this acceleration of entitlement expansion are simply wrong.
Maybe more frightening, though, are the implications of increased entitlements to the very fabric of our society. These public policies have fundamentally reduced the expectation of and capacity for individual responsibility.
The results of these shifts are illuminated in my work as a researcher, as I have the opportunity to meet and interview people all over the country in myriad circumstances. The differences I encounter are staggering.
Recently, I met with a group of people who for several generations have received increasing amounts of government assistance. Over the years, the crops they planted were replaced by less expensive commodities. The land on which they live is still fertile, yet ironically they have not planted the alternative crops. Nor are their farms filled with vegetables needed to feed their own families. Rather, the land simply sits unused while they complain the government is not doing enough for them.
Well-intentioned government handouts inoculated these individuals from the necessary innovations and advancements that competition naturally propels. Government aid decreased the initial pain, but exacerbated much larger, long-term problems. Entitlements have removed these individuals' need to provide for themselves and, over time, they have forgotten how to do so.
Compare that to a group of successful, self-reliant and happy people with whom I recently met in another part of the country. They, too, had worked in industries displaced by competition with a lower cost basis. However, in their situations, public policy subsidized education in order to retool their skills in areas of future high-growth, high-value professions. Soon, they were employed again but this time in more sustainable and higher-paying jobs. Their independence and confidence was not only intact, but augmented, thus increasing their capacity to complete other difficult tasks.
This example illustrates the efficacy of public policy which empowers self-reliance and more closely aligns with national priorities and future prosperity. As a society, we have a responsibility to one another. But too often, reactive policies intended to assist instead have the unintended consequence of perpetuating the core problems.
Clarifying the role of government requires thoughtful prioritization and a subsequent alignment of expenditures. And it requires a mature acknowledgement of trade-offs — we can't have everything. Only through intelligent and respectful deliberation can we design public policy that elevates the individuals it seeks to serve and, through doing so, benefits the public at large.
For example, rather than subsidizing inaction, let's direct our energy and financial resources to addressing root causes of shifts in employment. Optimal employment transcends mere economic motivations as it builds a confident and self-reliant society.
This will involve reducing entitlements that maintain the status quo and instead supporting investments that drive innovation and support small business, both of which are proven avenues to higher-value employment. It will also require investing in education and providing opportunities for retooling skills to align with 21st century demands.
Like muscles, skills decline when they are unused. Our current system of entitlements not only allows, but facilitates the atrophy of skills. We must redirect our priorities to enable self-sufficiency, implementing public policy that drives independence and innovation rather than incentivizing dependence and inertia.
Randy Shumway is the chief executive officer of the Cicero Group.