Entitlement programs are strangling the U.S. economy. In “Capitalism in America,” Alan Greenspan and Adrian Wooldridge show that from 1965 to 2016, entitlement program benefits grew “at average rate of 9 percent a year,” and increased their share of gross domestic product “from 4.6 percent to 14.6 percent.”
Rising entitlement program spending, they explain, is “crowding out domestic savings … on almost a dollar-for-dollar basis.” By draining savings, the increasing spending on these programs cuts the growth of capital investment which is “the primary driver of productivity.” The bottom line of their analysis is that growing entitlement program spending is “reducing productivity growth, and as a result, poisoning GDP growth.”
Read Full Article »