Michael Boskin, economics professor at Stanford University and senior fellow at the Hoover Institution, analyzes what’s ahead if the current progressive mindset and its associated big-government policies continue to hold sway. It’s not pretty.
The biggest future threat will be to the fruits of one’s labor. The unfunded liabilities of Social Security and Medicare are now several times the national debt; the unfunded liabilities of state and local governments for pensions and other benefits are in the trillions of dollars and mounting. The panoply of other government programs nonetheless continues to expand. The result, according to Congressional Budget Office projections, is that federal spending will reach 36% of GDP in a generation. This implies that taxes will have to double from the current, near-historic average, 18% of GDP. All federal taxes will increase—on income, capital gains, dividends, corporate earnings, employer and employee payrolls.
Left unchecked, many middle-income earners eventually will face marginal tax rates of 70% or higher—reducing them to minority partners in their own additional work and sundering the value of the investments in their own education.
North Carolina was once headed down this disturbing track. No more. A transformation is well underway, thanks to decisions made by the fiscal conservatives in the legislature.