Ayn Rand Institute: Don Watkins- 'What's Really Wrong with Entitlements'

Source:Ayn Rand Institute- ARI Fellow Don Watkins.

"It's an open secret that America's entitlement state is in disarray, and that the United States faces a crushing debt, thanks to programs such as Social Security, Medicare and Medicaid. But according to Don Watkins, ARI fellow, that's not the biggest problem with entitlements.

In this talk, you will discover the unknown history of life in America before the entitlement state, and discover the surprising reason why the United States went from a limited government to an entitlement nation. In the process, you will find out why all of the usual solutions to our entitlement crisis cannot work — and what kind of solution can work. (Recorded February 21, 2012.)" 

From the Ayn Rand Institute

Greece represents exactly what it means and what can happen when a countries government doesn't pay its bills. Or allows its population to become so dependent on social insurance programs for their daily survival, that when you get into a fiscal crisis (which is exactly what Greece is going through right now) then not only does your economy tank, but you pile up so much debt that you become dependent on other countries to bail you out.

A reason why the European Union has been so reluctant so far in bailing out Greece is because they are facing the same issues that Greece is: like Spain, Portugal, Italy, Germany, and others, all social democracies that spend a lot of their public resources and their economy's. Providing all of these public services, all of these social insurance programs. And when their economy's go down like they have, their welfare states struggle as a result because thats where the money is. 

What Europe is going through right now, could definitely happen to the United States as well, if we don't move to get our own fiscal house in order (so to speak) we could making these same drastic cuts as well in the future. Cutting people's Social Security and Medicare benefits, as well as Unemployment Insurance benefits, all cuts that could do a lot of damage to out economy, especially if people have to have these benefits in order to pay their bills. 

When you create a welfare state thats so big and you tax at such a high rate to finance it, you make people dependent on it in order to survive, because so much of the money in the economy is in the welfare state. But when you empower to finance their own well-being health care, health insurance, Unemployment Insurance, retirement and so forth, but then have a safety net to catch people who fall through the cracks, especially when the economy goes down, but then its there not only to help sustain people in the short- term, but also empowers them to get themselves back on their feet, you have a strong economy with a lot of economic freedom in it. 

When you create an economic system where the people have the individual liberty to take care of themselves instead, with individual liberty the people are expected to take care of themselves. And then you have a safety net to catch people who fall but then helps them back up.