Fifth in a five-part series.
Part one: Philip Klein: The welfare state is destroying America
Part two: Conn Carroll: Europe: the canary in the welfare-state coal mine
Part three: Philip Klein: Obamacare has made the debt crisis worse
Part four: David Freddoso: How the left got Americans hooked on welfare
Part five: Conn Carroll: Ending the welfare state
The future of the European Union does not look bright. Just this month, Standard & Poor's slashed the credit ratings of France and eight other major EU nations. The exact details in each country are different, but the outlines are the same: Inadequate economic growth slowed by high taxes, burdensome regulation, and an aging population increasingly dependent on the government.
The United States could be headed down this European path. The so-called big three entitlement programs (Social Security, Medicare and Medicaid) consume 43 percent of all federal spending today. In 2011, 48.5 percent, of all U.S. households received some type of government benefit. And we are already borrowing 40 cents of every dollar spent on these programs.
And the situation will only get worse. Fifty years ago, five workers were being taxed to pay for each beneficiary. Today, it is only three. In 20 years, it will be only two.
What can America do to escape the slow-growth, high-dependency path that our big-three entitlement programs have put us on? There are no easy answers. But the first step is to avoid making the situation any worse. The second is to reform the programs themselves.
The easiest way we could make the current problem worse is by giving in to liberal demands to solve the problem with tax increases. The United States already has the most progressive tax system in the world. Our top quintile of earners pays 69 percent of all federal taxes -- a greater percentage than the rich of any other developed nation.
Moreover, if we wanted to fix our spending problems with tax increases alone, we would have to double marginal tax rates for all income brackets and corporations. This could squelch already anemic economic growth, making us less competitive on the global stage. We would be dooming ourselves to a European path upon which economic growth cannot catch up with debt.
The other short-term decision we must make is to avoid establishing a fourth crushing new entitlement: Obamacare. This president will never revisit his wildly unpopular signature domestic accomplishment, but whoever runs the next administration should make its repeal their top priority.
Looking ahead, Americans must be broken of the current entitlement mind-set. Instead of guaranteeing defined benefits to everyone regardless of need, the U.S. government should return these programs to the model upon which they were originally sold to the America people: as insurance programs that focus on those who need them.
House Budget Committee Chairman Paul Ryan's Path to Prosperity Medicare proposal provides one example of how to do this. Instead of price-controlled health care, delivered by doctors who increasingly refuse to participate in the system, Ryan's plan would give each senior a "premium support payment" starting in 2022. They could use the payment to purchase their own health services, and it would vary according to health need (sicker patients would get a higher payment) and income (richer beneficiaries would get a smaller payment).
The Heritage Foundation has put forward a similar solution for Social Security. Instead of the "income replacement" system we have today, Heritage would slowly change Social Security into a flat payment, sufficient to keep beneficiaries out of poverty through retirement. Like the Medicare changes above, those with higher incomes would receive a smaller check.
Medicaid funding should be capped for each state, and the states should be given maximum flexibility to target these programs to the populations that need them most.
We can reform all of our entitlement programs, cut spending, and eliminate our deficit without raising taxes. The Peter G. Peterson Foundation has certified that the Heritage Foundation's Saving the American Dream plan, submitted alongside other ideas from both liberal and conservative think thanks, does exactly that.
There is a way to avoid following in Europe's footsteps. We can choose to end our entitlement mind-set, reduce our dependence on the federal government, and return to strong economic growth. But first we have to bring the entitlement state as we know it to an end.
Conn Carroll is a senior editorial writer for The Washington Examiner. He can be reached at firstname.lastname@example.org.