When people talk about what economic ideas they’d like to see implemented, there’s usually an underlying assumption that “we” (whoever that is) are in control of our destiny. I noticed this when talking to Samuel Moyn about Gerontocracy in America, in which the author argues that America should be a socialist society in which government takes more money from its citizenry and provides more public goods and direct support. DSA activists are motivated by the same underlying model of reality. There will come a point when Americans will “choose” to overthrow the oligarchy and build a country that works in terms of improving the lives of everyday people.
I think this worldview is deeply naive about empirical realities. For Americans to propose new costly welfare programs is like a guy who is going bankrupt, and has additional expenses coming down the line that will make his financial situation much worse, thinking about how to begin an expensive new project of remodeling his house. We don’t have the financial flexibility, and this doesn’t depend on who exactly gets into office in the coming years.
Our financial future is largely set based on decisions that were made long before most Americans were born. Social Security and Medicare were established in 1935 and 1965 respectively. In 1970, they made up a combined 19% of the federal budget. Now, the number is about twice that. And if you don’t include the cost of interest on the debt, without major restructuring Social Security and Medicare will likely be over half of all federal spending within two decades.
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You've found your way to another correct take here, but it's uncharacteristically lukewarm: in fact this problem is much worse than you say.
For one thing, entitlement trust funds running out of money is a fake issue - everyone in DC knows we'll keep funding the entitlements at the same rates and simply borrow more to do so. Nobody is voting against the "save grandma's social security act" or whatever enacts that change.
That's only one instance of the genuinely terrible political economy on fiscal issues right now. Anyone remotely serious about fiscal policy knows - and has known for decades - that we must either raise taxes or cut entitlements. Preferably both. We used to have one party that wanted to raise taxes and one that wanted to cut entitlements, so a grand bargain seemed possible.
But voters hate taxes and love entitlements, so they revolted from both sides against any compromise. Now both parties have learned that lesson and only talk about further cutting taxes or further expanding entitlements. Your faith that financial realities will "force" politicians back to reason is kind of autistic - if voters keep demanding something for nothing, politicians absolutely can, and will, drive the car off the cliff. Hyperinflation, sovereign default, the works.
Frankly you should be putting the general public on blast here. How did we get so irresponsible?
Well we can only hope for an AI powered abundance in the coming decades, so entitlements will become irrelevant. If we can automate everything, food and goods will become extremely cheap. Old people will no longer need welfare to buy food.