There's a funny irony about labeling Social Security and Medicare "thinly-disguised welfare." Were it, the system would be in a lot less trouble than it is. Up here in Canada, the old social democrats who first put together government-run healthcare saw it as something like a homeless shelter or food bank: a last-ditch alternative for people who had nowhere else to turn. In other words, people would be reluctant to tap the government unless something was really wrong. Had we Canadians really had that attitude, there wouldn't be any Medicare crisis. People would be too reluctant to draw down the system for the spending numbers to be what they are.
[And yet...there was already adequate private charity for the indigent. My grandfather on my mother's side, a surgeon, had months in the Great Depression where 40% of his billings went unpaid. Needless to say, he didn't press because he was charitable. The main reason why the soc-dems were pushing government heath care was because they were offended by the fact that private charities required a means test!]
To get back to my point: once Social Security, Medicare and the Canadian equivalents are seen as services for taxes, a different dynamic comes into play. Instead of tapping the government, it becomes "I'm getting what I paid for in taxes." That bumps up demand a lot because people - naturally enough - are far more assertive when they're sure they're owed. If they think they're charity cases, they're typically hesitant and reluctant. Not so if they see their taxes as prepayments.
Add to that good old human nature, that ole debbil that always says "I paid more than I paid and got less than I got." Again, natural.
The so-called entitlement crisis really unearths a weak point in democracy. When there's bad and widely unpalatable news, the only way politicians can do something about it is to become followers. They have to follow the people, and wait for the bad news to become too intrusive to ignore. Anyone who tries to put his foot down beforehand is sticking his neck out. Showing real leadership might as well be the equivalent of putting on the kamikaze headband and driving a plane into a warship. That's why the crisis, in the political class, is the most-known problem that nothing's done about.
In a way, it's unsurprising that the father of social welfare was Count von Bismarck and the first system was implemented in the German Empire. The Kaiser had the royal right to put his foot down in case the system got out of hand. He could not only use the bully pulpit, but he also could make life hard for the legislature until he saw something done about the issue.
But not in a democratic republic. Therein, you have to depend upon the rule of the people. In fact, this is one case where the people have to rule instead of the politicians.
Unfortunately, as you well know, the political class' "solution" is rationing. Hell-lo death panels.
What that meant was that folks were setting aside $1.00 in Social Security to get back $0.10.
This also meant that folks were 'investing' in Social Security with hard currency at the time of their lives when they were earning the least, and then retiring to receive soft currency at the time of their lives when they were moving out of the productive sector.
Of course they imagine they paid more in than they get out ~ because it's true ~ inflation makes it true.
Today, without inflation ~ in fact, with massive deflation, we get an opposite effect. People paid in soft dollars over the last 30 years, and now they're getting back hard dollars.
Any normal society would have re-issued it's currency somewhere in the middle of all that ~ with new values, and some sense that over time currency probably ought to reflect essentially the same value ~ that is, a dollar today should be able to buy much the same as a dollar then, or a dollar tomorrow.
Alas, we do not have normal societies these days, and the Democrats were in charge so long nobody really knows what Social Security has cost them.