Economic historian Niall Ferguson writes in his new book The Great Degeneration that, “We are living through a profound crisis of the institutions that were the keys to our previous success—not only economic, but also political and cultural—as a civilization.” George Melloan, author of The Great Money Binge reviews Ferguson’s book for The Wall Street Journal:
When it comes to health care and Social Security in its various forms, it is not at all clear that the government will be able to keep its promises. By Mr. Ferguson’s reckoning, U.S. future obligations under present law exceed future revenues by $200 trillion (calculated at current value), “nearly thirteen times the debt as stated by the U.S. Treasury.” That figure doesn’t include the unfunded obligations of state and local governments, estimated at $38 trillion.
Of course, future obligations stretch over many years, and the burden consists mainly of debt service, not the debt itself. But the numbers are so huge that just the carrying charges will likely make them unmanageable without painful adjustments. One adjustment that already seems inevitable is a reduction of Medicare and Social Security benefits to future generations. The Federal Reserve also has a solution—inflation, yet another form of pain. And then there is the Obama all-purpose remedy, higher taxes. One way or another, tomorrow’s citizens will pay for today’s excesses.
Mr. Ferguson worries as well about the erosion of the rule of law. Not only do politicians increasingly flout the Constitution, but they are creating a proliferation of unwise and unenforceable laws and regulations. Lawyers on congressional staffs write massive pieces of legislation for other lawyers to implement and still others to interpret for clients. Thus, lawyers rule.