Job losses from cutting entitlements

Let’s say McConnell and the GOP get their way and balance the federal budget by cutting entitlement spending- Social Security, Medicare, Medicaid. How many job losses would that translate into, nationwide?

The deficit this year is north of $800 billion, projected to top $1 trillion in a couple of years. I don’t know where to start with this question, and don’t know how to approach counterbalancing potential job gains, if any, from freeing all of this money from the government’s grasp.

According to this study, each billion dollars invested in health care creates about 12,883 jobs.

Tax cuts for personal consumption creates 10.779 jobs per billion spent. I assume the numbers are roughly equal for social security.

A billion dollars in food stamps creates 9-18k jobs. I would assume there is a reasonable level of overlap between that and social security spending since a good fraction of that would go to food.

Anyway, as a rough rule of thumb I’d assume about 10-14k jobs per billion spent.

So cutting 100 billion would mean 1-1.4 million jobs.

FWIW, I’ve seen estimates of various legislative proposals on economic growth, but I can’t recall seeing one linking entitlement spending to employment. I don’t think that’s a common metric.

Not the place for a nasty retort, but why is something that I have paid into for over 45 years and have earned, considered an entitlement?

Assuming 18k jobs created, that’s a snip at $55K per job. As I understand it, $55K is a handsome salary in much of America. It would be better to just give them the money.

Because it is an entitlement. If you’ve been paying for 45 years, you should be old enough to not confuse “entitlement” with today’s recent use/abuse of “entitled” to refer to spoiled younger generations or those creepy, self-important individuals who feel “entitled” to everything.

And, also, you’ve not been paying “into” anything for 45 years. There’s no account with your name on it. You’ve been paying a tax that ends up in the general fund with which to buy aircraft carriers. Thus you’re not pulling out “your own” money, but are receiving entitlements.

Give who the money? The people producing and distributing food?

I know, this is one of the funniest things about language. That word has completely flipped connotation. :slight_smile: Entitled means that you are justly right in your claim to something. If someone takes my iPad and breaks it, I am ‘entitled’ to receive recompense from them. It is something that I deserve because he broke something that wasn’t his. Similarly, Social Security is something that you paid into and are now ‘entitled’ to withdraw from-it is quite literally an ‘entitlement.’

What has happened is that people have taken the phrase ‘acting entitled’ and then dropped the ‘acting.’ The phrase ‘acting entitled’ means that you are doing things in a manner which implies you are entitled. The implication of the statement is that you aren’t truly entitled to such things. A snobby teenager who expects that their parents would pay for their misdeeds is someone we might say is ‘acting entitled.’ They may or may not be entitled, but they act that way. As I said earlier, language has largely forgotten the ‘acting’ present participle and began using ‘entitled’ as an adjective that is opposite of its true meaning. As in ‘That teenager is an entitled little cretin.’ The traditional meaning of that would be that the teenager is a deserving little cretin. (Of course, cretin actually refers to someone who suffers mental handicaps and dwarfism and it was originally a kind term that meant that despite their deformities, they were still ‘Christians’ that God loved- so calling someone an entitled little cretin actually means that they are a handicapped person deserving of love and presumably whatever other thing they think they deserve.)

Regardless, an entitlement is a good thing, not a negative one.

Well, I would see an explosion in undertakers and grave diggers. So that would offset the job losses to some extent. But I would expect there to be a drop in property values due to the expansion of “potters field” cemeteries, as so many would not be able to pay for a decent burial.

Not common and not very valid in economics to tie particular govt policies to the unemployment level, unless they are policies which directly impact the economics of hiring (for example, the FICA payroll tax discourages hiring all else equal as opposed to say raising that same money with a VAT).

And ‘studies’ showing X invested in Y (often, our) industry ‘creates’ Z jobs virtually always ignore how many jobs would result spending the same money someplace else.

The fact that US entitlements are so underfunded (in terms of today’s level of taxation) could constrain growth in the longer run, the growing fiscal overhang. But it would be pretty hard to prove that’s happening or when it starts happening. And in the meantime deficit spending is shorter term stimulative. Anyway let’s assume the grim US fiscal prospect begins to negatively effect growth. You’d still have the same issue as ‘X invested in Y industry creates Z jobs’. You’d have to show that regaining a sustainable fiscal path by cutting entitlements is superior in growth terms to raising taxes to pay what’s been promised. Cutting or not-cutting, with everything else equal, aren’t the only two choices.

And, maximizing employment or even growth isn’t most policy/maker voters’ only consideration anyway. One reason to have govt transfer payments is simply to transfer money from people viewed less deserving of keeping it than others of receiving it. It’s an example of perma-politics IMO to claim that every policy ‘creates jobs’. Often that’s clearly not the main idea, and in fact well informed people in favor of the policy even accept that it lowers growth and/or employment but by a tolerable amount relative to other benefits. But ‘our policy lowers growth and employment to an acceptable degree given its other benefits’ isn’t a good bumper sticker slogan. Hence discussion of whether ‘Social Security creates jobs’, which is kind of ridiculous actually.

Social Security & Medicare are entirely paid for by their own funding.

This recent deficit is caused by the GOP passing huge tax cuts for rich people.

There will be no job gains.

Two hundred and eighty-six.

You are entitled to it because you paid for it.

Not to beat a dead horse but somebody familiar with the English language at least in formal dictionary definitions, would probably find it weird when people give evidence they are entitled to something (‘paid in for 45yrs’) as part of their indignant protest that it’s called an entitlement. :slight_smile:

But further, what’s the real difference between ‘I paid my FICA tax for 45 yrs so why shouldn’t I get whatever medical care (Medicare is the Big One) has been invented up to now no matter how expensive it is, for a low monthly premium?!?’ and OTOH ‘why should I have to hand over more of my hard earned money so old people with plenty of money (not necessarily you, disembodied voice on the internet, just speaking in general) can get nearly free medical insurance compared to what I pay for private insurance?!?’ The answer to both is ‘whatever the representatives elected by voters decide in a murky messy process over time’.

I don’t recall any of those programs actually being on the chopping block. Most of the cuts were aimed at large government agencies like Department of Labor, Interior, State, HUD, etc. Are you asking the question assuming a different cut list than actually exists, or what the effect would be on the actual cuts?

Assuming you are talking about SS, Medicare and Medicaid, and assuming this would be politically even possible, I’d go with…it depends. Are we assuming they are completely cut with no more SS, Medicare/Medicaid? And further assuming that, if completely cut, there is nothing to replace them, either government or private? I’d guess that just cutting Social Security would potentially cost 100’s of thousands of jobs, since you’d suddenly have a bunch of people who depend on their SS retirement without any means of support. Leaving aside that this is complete and ridiculous fantasy, the trickle down effects of that are hard to even quantify, but think about just the effect on companies that directly support older people who are using their SS to live.

If you are talking about lesser cuts, then it’s, again, going to depend…how much would be cut and where? I don’t think there is really a GQ answer to what you are asking as you’ve laid it out here…it could run from no real effect to dogs and cats living together. It’s really going to depend on what, exactly, you are proposing is cut and from where (leaving aside how the GOP would cut those programs in the first place).

I’ve worked for SSA doing disability-related work for 3+ decades.

Probably 30 years ago, I remember discussing w/ colleagues about universal income - simply pay everyone an amount equivalent to the average disability payments and take it back through taxes from anyone employed. Could eliminate the entire disability portion of the SSA, with only likely need for slight beefing up of IRS. No idea how many jobs at SSA are solely disability related, but there are at least 1600 SSA ALJs in some 250 hearing offices and (I think) 9 regional offices and a big central HQ. The judges earn over $150k, and IIRC there are 3-4 clerical/management staff per ALJ in the hearing offices alone. So that would be some 6400 jobs. OHO (Office of Hearings Operations/formerly ODAR/formerly OHA) is a BIG operation.

Now if you eliminate ALL of social security, all VA benefits, all Medicare - that would be a huge number of jobs cut. Not sure if it is still the case, but SSA used to be the single largest government employer outside of the military. But as mentioned above - that’s nonsensical.

Heck, I even view the military as - in large part - an entitlement program. Think of how many military jobs we could cut by narrowing our perception of “national interests.” And how many defense contractors we could shut down. But you’d also lose the jobs running the convenience stores, strip joints, and tattoo parlors outside the military bases…

My personal perception is that the Repub intention is to cut federal jobs, but to replace them with private contractors. And - of course - when done by the govt, that RARELY results in cost savings or improved service.

The frustrating thing (IMO) is that NO ONE is discussing meaningful reforms of the various “entitlement” programs. Moreover, government employment - number of positions - at EVERY level (state/local/fed) has been repeatedly slashed over the past couple of decades. So sure, let’s continue doing more with less!

Oooh - I forgot. Eliminate SSA disability and you can lose probably 75% of the lawyers and staff at OGC (Office of General Counsel), as the majority of what they do is defend disability decisions. OGC lawyers are generally highly-graded (up to GS 14-15 and SES).

Moving from GQ to GD.

See this -
Approx - SS - 20%, defense - 19%, Unemployment/welfare/other mandatory 16%, Medicare and Medicaid 21% - you’re at over 75% of federal spending there.
You don’t pull that rug out from under the economy without serious repercussions. And then, all those doctors, defense contractors, people who run businesses near Army bases, etc - all depend on that money. Plus, slum landlords and others living of the avails of welfare.

And, nobody explains how, if you cancelled medicare or welfare what the people would do? Riot and loot grocery stores? Die in droves? You already have socialized medicine in the USA, it’s just crappy and paid for by the people with actual (often also crappy) health care. If a person who cannot pay shows up at a hospital, they still have to give them basic treatment. Who pays for that? It gets added to everyone else’s bill. Cut off medicare, and all those people will show up to get treated for free, and you will pay for them with higher premiums, and $200 aspirin instead of $100.

And you can’t shave it much. Doctors already complain medicare payments are too low. What do you do? Pay them half that much? Even fewer doctors will take medicare. Force doctors to accept medicare? Stop paying for medicare for the year when the pot is empty, say, the end of September? Pay people half the welfare they used to get? Their rent and food bills won’t be half what they were.

The devil is in the details. The problem is the USA spends $1.20 for each $1.00 it takes in. Cutting taxes supposedly with result in a bigger pie, but that has never materialized. But they provide certain services; this is what the services cost. Changing things, especially cold turkey, will only create massive job disruptions. People will lose jobs, businesses will close down, companies and people will go bankrupt, important tasks will not get done.

(OTOH - diatribe - every government in history has had a problem with money. Magna Carta was a result of too many taxes. Charles I lost his head over taxes; so did Louis XVI and his family. Henry VIII took over the monasteries and kicked out the pope not just over divorces, but because the church owned about 10% of the country and expropriating it was a good way to get money. This is nothing new…)

Because you haven’t paid enough to cover what you take out (on average, anyway), and it’s literally an entitlement: the government pays out anyone who meets the criteria, rather than allocating a specific, bounded amount of money for the programs. Social Security accounting is complicated, but Medicare is definitely not self-financing; it takes a significant amount of money out of the general fund.