Forty-eight years ago, Lyndon B. Johnson — much like President Barack Obama — stood as the incumbent Democratic candidate vying for another term in the Oval Office during an election year. It was during that 1964 presidential race that Johnson first mentioned the “Great Society,” a vision for a more socially equal America through increased domestic spending.
Johnson’s colossus was created with the best of intentions. It represented a social initiative even wider in scope than Roosevelt’s New Deal. But the inherent economic flaws of Johnson’s programs, as well as those that have followed, have been systematically ignored by some of America’s political elites, who have opted instead to allow these programs to continue.
It’s a hole that Obama has fallen into.
One of the nation’s largest public health care initiatives, Medicaid, was established in 1965 as part of Johnson’s “Great Society.” The program aims to provide health services for those who could not afford private insurance plans.
In 1978, during the period of stagflation and general national malaise that characterized the latter half of the decade, 9.1 percent of the U.S. population received Medicaid benefits. By 2010, that number had increased to 15 percent.
By the year 2020, Medicaid coverage is projected to jump to 144 percent of its 2011 level in the wake of legislation passed under Obama. This leaves an overextended, debt-financed federal budget to foot its $871 billion future bill.
Total federal spending for the 2012 fiscal year was set at around $3.8 trillion. Of that, 62 percent was allotted for spending on Medicare, Medicaid, Social Security and various other welfare and entitlement programs.
The estimated revenue of $2.5 trillion puts us in the red by more than 50 percent of our annual revenue.
Meanwhile, our debt-to-gross domestic product level is expected to reach 70 percent for the federal government’s accounts alone by the end of 2012, with the total national debt sitting at a whopping 101.5 percent of GDP.
