|By Alan Hall | Excerpted from the May 2012 Socionomist
Originally published under the title “A Historic Peak in the Amount of U.S. Government Entitlements”
After 80 years of persistent growth, Washington’s annual spending on entitlements now accounts for more than half of total federal outlays. In this article, Alan Hall surveys the multi-decade, social-entitlement tsunami – a wave that, like all others, will eventually subside as social mood hits bottom. Here is an excerpt of his May 2012 report.
A Supercycle-Degree Advance in Entitlements
The top (red) line in Figure 1 plots 80 years of rise—a 17-fold increase—in U.S. government entitlements as a percentage of total personal income. The lower graph is the Dow Jones Industrial Average adjusted for inflation via the Producer Price Index (Dow/PPI). For ease of reference, we added Elliott labels to the entitlements trend.
… The long-term trend in both lines has been dramatically higher. But the timing of their movements differs radically. During positive mood phases, entitlements tended to slow or even retrace their ascent. During negative-mood phases, entitlements expanded dramatically. Specifically, during the three bear phases in the Dow/PPI, the entitlement ratio increased by 500%, 100% and 45% respectively, for an average gain of 215%. In sharp contrast, the bull phases saw a gain in entitlements of 7% and a loss of 1%, for an average gain of just 3%.
Where We Are Today
Having skyrocketed since 2000, Americans’ reliance on government benefits is now at an all-time high. … The Congressional Budget Office (CBO) expects the overall entitlement-growth trend to continue:
[The] long-term trend is clear. Over the next 25 years, as the population ages and medical costs climb, the budget office projects that benefits programs will grow faster than any other part of government, driving the federal debt to dangerous heights.2
The large-degree negative social mood trend that began in 2000 will indeed drive the current entitlement boom higher. But the CBO’s 25-year forecast is a linear projection—an assumption that the trend of recent decades will continue—and does not consider future fluctuations in social mood.
In the remainder of this article, author Alan Hall explains why the impending collapse in government entitlements may occur sooner than almost everyone (including staffers at the CBO and Treasury Department) think.
Extremely fascinating topics like this one are the usual unusual fare in The Socionomist. Without a subscription, you’ll never really understand what truly is happening in society today and the forces behind those trends. But the great news is: You can get not only the rest of Alan Hall’s unique perspective on entitlements in America—but also the full archive of past issues when you subscribe.
Want more content like this?
The Socionomist is the only monthly publication that offers you practical insights on the relationship between social mood, financial markets and cultural trends. Each issue warns you about big societal changes before they can harm you and reveals breakthrough opportunities emerging from trends in society.
Learn more about The Socionomist now.
(Socionomics Members: Log in for the full article and your complete, exclusive archive.)
Socionomist is a monthly online magazine designed to help
readers see and capitalize on the waves of social mood that contantly occur
throughout the world. It is published by the Socionomics
Institute, Robert R. Prechter, president; Matt Lampert, editor-in-chief;
Alyssa Hayden, editor; Alan Hall and Chuck Thompson, staff writers; Dave Allman
and Pete Kendall, editorial direction; Chuck Thompson, production; Ben Hall,
For subscription matters, contact Customer Care: Call 770-536-0309 (internationally) or 800-336-1618 (within the U.S.). Or email firstname.lastname@example.org.
We are always interested in guest submissions. Please email manuscripts and proposals to Chuck Thompson via email@example.com. Mailing address: P.O. Box 1618, Gainesville, Georgia, 30503, U.S.A. Phone 770-536-0309. Please consult the submission guidelines located at https://3d8988.p3cdn1.secureserver.net/PDF/Socionomist_Submission_Guidelines.pdf.
For our latest offerings: Visit our website, www.socionomics.net, listing BOOKS, DVDs and more.
Correspondence is welcome, but volume of mail often precludes a reply. Whether it is a general inquiry, socionomics commentary or a research idea, you can email us at firstname.lastname@example.org.
Most economists, historians and sociologists
presume that events determine society’s mood. But socionomics hypothesizes
the opposite: that social mood regulates the character of social events. The
events of history—such as investment booms and busts, political events,
macroeconomic trends and even peace and war—are the products of a naturally
occurring pattern of social-mood fluctuation. Such events, therefore, are not
randomly distributed, as is commonly believed, but are in fact probabilistically
predictable. Socionomics also posits that the stock market is the best available
meter of a society’s aggregate mood, that news is irrelevant to social
mood, and that financial and economic decision-making are fundamentally different
in that financial decisions are motivated by the herding impulse while economic
choices are guided by supply and demand. For more information about socionomic
theory, see (1) the text, The
Wave Principle of Human Social Behavior © 1999, by Robert Prechter;
(2) the introductory documentary History's
Hidden Engine; (3) the video Toward
a New Science of Social Prediction, Prechter’s 2004 speech before
the London School of Economics in which he presents evidence to support his
socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net.
At no time will the Socionomics Institute make specific recommendations about
a course of action for any specific person, and at no time may a reader, caller
or viewer be justified in inferring that any such advice is intended.
All contents copyright © 2023 Socionomics Institute. All rights reserved. Feel free to quote, cite or review, giving full credit. Typos and other such errors may be corrected after initial posting.