The tax started out small, changes were deferred until years after legislation passed, and most voters at the time were promised lifetime benefits far in excess of taxes to be paid. The Current Fiscal Straightjacket None of these methods of easy financing is readily available today. Defense spending as a percentage of GDP will soon fall below its lowest point since 1948. This means there is a limit on the amount of funds that could be transferred from defense to domestic spending, even if the defense budget were shaved further. There is little or no peace dividend left, and what does remain has already been committed.
Government can no longer depend on inflation to erode the value of government debt.
In the late 1970s the Federal Reserve Board began an aggressive anti-inflation effort that has led to lower rates of inflation. Government now pays higher rates on its outstanding debt than it does on its new debt. Bracket creep in the individual income tax, which in the past brought government more revenue, has been curtailed by slower economic growth and particularly by indexing of tax brackets for inflation since 1984. The Social Security tax rate is already higher than it has ever been, and the public far more resistant to further increases in it. The system is no longer able to make every cohort of senior citizens a winner by passing on higher and higher financing obligations to future generations.