George Will thinks that in the near-hysteria over how to control the current economic stampede, people are forgetting the big picture:

An enormous range of complex judgments will have to be made about who will decide -- and by what criteria -- to whom money will be directed, and how to value and price the financial instruments, and the assets behind them, that the government might soon own. But these micro problems, although quite huge, pale next to the macro problem, which is:

This crisis has arrived during the ninth month of a vast demographic deluge -- the retirement of 78 million baby boomers. As the population ages, the welfare state -- primarily, a transfer-payments pump providing pensions and medical care for the elderly -- requires more rapid economic growth to generate increasing revenues. To the extent that today's crisis results in large amounts of capital being allocated by considerations other than those of economic efficiency, the nation will be consigned to less-than-optimal economic growth.

The IBD correctly notes: "Allowed to grind on without real reform, Social Security, Medicare and Medicaid will do what no invading army or cabal of terrorists has done or will ever do: bring this mighty republic to its knees. Increasing federal taxes by 150% will strangle economic growth."

I think the IBD is too optimistic. Even pushing tax rates to 100% confiscation wouldn't finance the entitlements black hole at the rate we can expect the client population's needs to grow -- especially not after 2050, when the demographics of the U.S. will tilt in a distinctly less favorable direction. A mere 150% increase in current rates certainly won't do it. One way or another, the Federal entitlements system seems headed for a terminal crash. The only question is when it will happen.

Raising taxes can delay this, but not prevent it. And might, actually, trigger it sooner; the historical evidence suggests that current tax rates may already be at above the minimum level where, by suppressing and unhealthily redirecting economic activity, they actually reduce total revenue. (One reason to believe this is that the much-derided "Bush tax cuts" actually increased revenues despite the effects of the dot.com bust.) But even if this isn't true yet, diminishing returns will set in at some point as rates go up.

The only alternative to raising taxes (or deliberately inflating the currency, which in this context has similar effects) is to buy debt and pay entitlements out of that, pushing the unsustainability problem into the future.

The fundamental problem is that income-transfer programs (and the interest service on the debt purchased to keep them running) are spending wealth in higher volumes than the economy can actually generate, and demand for that spending is rising faster than the economy is growing. Thus, raising tax rates is no longer a way out, if it ever was.

At some point, the U.S. government is going to lose both the ability to increase revenues and the ability to sell bonds. At that point the entitlements system will crash. Transfer checks will either stop issuing or become meaningless because the government has, like some banana republic, hyperinflated the currency in order to get out from under its debt obligations.

The problem is, even though the Big Crash is ultimately inevitable, getting rid of the "entitlements" could result in rioting in the streets. Even revolution. Politicians cannot face things like that. They can't even talk about entitlements, which have long been considered a "political third rail."

Fortunately, there is no such third rail for bloggers, because bloggers don't have to worry about getting elected. In that sense, they are either part of the current flow, or else they're ungrounded, depending on your point of view. So I can reach out and touch the third rail with complete impunity. I won't get shocked, not even if I say it's time to scrap the welfare state.

Why, I can even yell "Get rid of Social Security!" "Take care of yourself and your own family!" "Buy guns!" "Store food!"

But I wish that those for whom this really is a political third rail would remember that there's nothing to fear but the fear of death.

(Which means we have nothing to fear but the inevitable itself.)

QUESTION: Amidst the endless talk about bailouts, I have a nagging question for those who think "the government" is a blank check:

Who will bail out the bailout?

(Or, if we look at the government the way a college kid looks at daddy's money, "What happens when Daddy's check bounces?")