A return to self-government.
The federal budget today resembles a time bomb with a Medicare card taped to it. Entitlement spending consumes the vast majority of federal outlays, and future obligations (mostly from Social Security, Medicare, and Medicaid) far exceed $100 trillion in unfunded liabilities. Reform is overdue, but politically radioactive. The welfare state is no longer a safety net—it is a gravitational force pulling federal priorities inward.
Sixty-nine million Americans received $1.5 trillion in Social Security payments in 2024. Nearly $2 trillion was spent on Medicare and Medicaid combined. Welfare outlays were $1.6 trillion. The magnitude of these numbers is not simply staggering, but beyond comprehension. For comparative scale, the outlay for military salaries and housing was $176.2 billion for fiscal year 2024. Federal employees who weren’t military were paid $384 billion.
This is obviously irresponsible and unsustainable. Treating Social Security as anything other than a general fund and part of the federal income tax structure is dishonest. The program is a general fund in, and a general fund out. This was once an important debate—but it is no longer.
One response to our looming fiscal catastrophe is to dramatically increase the flow of immigration so that more people are paying into the system. The other side of the “grow out of it” argument is the claim by proponents of modern monetary theory that our economy could renew its once-meteoric rise by increasing the U.S. population to one billion. However, the price paid for taking that path is seen all around us in civil unrest, a low-trust culture, and a public square that is nothing but grievance and grift.
The problem is that outright cuts are seen as a political nonstarter. Coercion breeds backlash, and gridlock is the norm. The legislature no longer legislates—instead, our purported representatives allow the bureaucracy to govern in their stead.
What remains is an unexplored but promising democratic route: a voluntary path that allows individuals to contractually exit from future federal entitlements in exchange for a lump-sum buyout or its equivalent. Not a revolution, but a negotiated withdrawal—that is, a decentralized retreat from the Leviathan.
In “Is DOGE Enough?” Jeffrey H. Anderson highlighted not only the fiscal calamity before us, but also put forward thoughtful proposals to help the United States stave off destruction: a phased-in raising of the retirement age indexed to actuarial longevity and congressional bravery in the light of the unaffordability of Medicare and Medicaid. But I suggest that we bypass the cowards in the legislative branch and go to the people directly.
Exiting the Entitlement State
The federal government should offer eligible individuals the option to forfeit future claims on programs such as Social Security, Medicare, and Medicaid. In exchange, they would receive:
- A lump-sum payout calculated as the net present value of their projected benefits, or
- A transfer into a private retirement or health account, or
- A tax-advantaged Treasury bond redeemable at retirement.
The key principle of this proposal is that it’s voluntary. No one is forced to exit. But for those who prefer private alternatives or simply distrust the solvency of federal promises, this is an escape hatch.
Likely interested participants include:
- High-income individuals with alternative retirement planning.
- Libertarian-minded workers who wish to reduce dependency on federal programs.
- Younger earners who are skeptical that current programs will remain solvent.
- Those who prefer private health and retirement solutions.
By beginning with a pilot program for younger Americans, perhaps starting with those under 40, the government could limit actuarial risk while gathering essential data on uptake and impact. But procedural delay increases implementation risk.
This plan is not unthinkable. Private-sector pensions offer lump-sum buyouts. Federal workers often choose between annuities and cash settlements. Some nations like Chile and Sweden have partially privatized their retirement systems. The precedent exists—just not at the scale of federal entitlements.
Legally, Social Security benefits are not contractual rights (see Flemming v. Nestor). But the federal government can enter into contracts when authorized by Congress. Enabling legislation could allow the Treasury or the Department of Health and Human Services to offer binding settlements for those choosing to exit the entitlement state.
The math is compelling. Instead of facing escalating outlays indexed to inflation, life expectancy, and medical costs, the government would cap its obligation at the time of the buyout. It exchanges an open-ended liability for a fixed payment. Over time, this reduces the scale of future mandatory spending and lowers unfunded obligations on the federal balance sheet.
If structured carefully, the buyouts could be discounted enough to produce net savings while still being attractive to opt-in participants. Economically, it could energize private financial markets—especially for annuities, health savings accounts, and long-term care insurance—and create new instruments for managing individual risk.
The recent downgrade of the U.S. sovereign credit rating by Moody’s from AAA to AA1 marks a significant turning point in the nation’s fiscal health. This action, following similar downgrades by Fitch in 2023 and S&P in 2011, underscores growing concerns over the United States’s escalating debt and persistent deficits.
Moody’s cited the government’s failure to implement effective measures to reverse the trend of large annual fiscal deficits and rising interest costs as key reasons for the downgrade. The implications are profound: increased borrowing costs for the government, potential ripple effects across the economy, and a diminished perception of U.S. financial stability on the global stage. This fiscal alarm bell highlights the necessity for innovative solutions, such as the proposed voluntary entitlement buyouts, to address the unsustainable trajectory of mandatory spending and restore confidence in the nation’s fiscal management.
Objection #1: People will make bad choices.
Indeed, some will. But this is not a reason to abandon the proposal. Instead, it is a reason to reconsider whether we believe in democracy at all. If citizens cannot rationally manage their own retirements or health care, why allow them to vote on trillion-dollar budgets, tax policy, or war? To reject voluntary disentitlement on the grounds of irrationality is to reject the core premise of democratic self-government: that the citizen is a moral and rational actor. Either we trust our fellow citizens or we don’t.
Objection #2: Decoupling undermines solidarity.
A voluntary exit does change the social compact. But that compact is already fraying. Programs originally designed as intergenerational insurance have become unsustainable transfer schemes. Offering citizens an exit does not destroy the system—it gives it room to breathe. It would become a mark of status to have exited the existing system, a mark of self-reliance our Founders believed was necessary for republicanism.
A Civic Argument for Liberty
This is not merely a fiscal policy—it is a civic gesture. The entitlement state infantilizes its subjects under the guise of care. A voluntary buyout instead affirms adulthood, rewarding those who plan, save, and take responsibility. It introduces contractual liberty in place of political dependency. We do not need to reduce government by force, but by choice—one signature at a time.
This proposal is not radical but evolutionary. It does not feature mandates, riots, or sudden collapses. It allows Americans to opt out of promises made by long-dead legislators in favor of freedom and self-determination.
Let Social Security remain for those who need it. Let Medicaid continue for those who trust it. But let others go their own way. The republic was not built on dependency—it was built on consent.
Let the disentitlement begin.
