#8: The Connection Between the National Debt and Abortion

Well, so far my recommendations for solving the problem of the national debt include privatizing the U.S. Post Office as the first step toward eliminating 50% of federal employees, reducing Social Security benefits to match revenues, and converting Medicare and Medicaid from an insurance plan to a minimum health benefit plan.

Obviously, I’ll never be elected to any political office, which is okay since I am not running.

Let me suggest a fourth step we could take to accelerate our path to solvency – reverse Roe v. Wade and make abortion illegal.

“WHOOOOAAA!!!!  Did he just say that?!”

Yes, I did.

“What does abortion have to do with our national debt?”

I’m glad you asked.  Let’s explore the connection between abortion and the national debt.  Before I begin, let me reaffirm my intention to discuss this topic without political bias.  My goal is that both the Pro-Choice and Pro-Life sides of the abortion debate can acknowledge the truth of this essay.

Please refer to the Wikipedia entry on the Roe v. Wade decision of 1973.  The last sentence of the third paragraph reads,

“Roe v. Wade reshaped national politics, dividing much of the United States into pro-choice and pro-life camps, while activating grassroots movements on both sides.”

Given the intransigence on both sides, I have often wondered if there is a third position which could effectively resolve this issue.

Abortion had been part of American life since its founding, and was legal for several decades until it became mostly illegal in most states in the mid 1800’s. After decades of countless illegal abortions under inconsistent medical conditions, the Supreme Court in Roe v. Wade tried to balance a woman’s right to privacy with the state’s dual interest in protecting the health of the woman and the “potentiality of human life”.  Thus, fetal viability became the legal test for guiding regulations which deny abortions.  Medical advances in treating premature babies pushed this limit to 24 weeks or less of gestation, but now the viability test is challenged by those who support late term abortions, even up to the time of delivery.

There is a third interest that the state has in this debate.  I don’t know if this interest has ever been included in any legal case, yet it is undeniably there.  That interest is the lifetime productive capacity of the unborn individual to support the welfare programs of the state.

Wait a minute!  What does this mean?  This may be a huge conceptual leap.  Allow me to illustrate my point.

In an agrarian society with no centralized social welfare system, as in the United States before 1920, when more families lived on farms than in cities, farm families typically produced many children.  Infant mortality was higher than today, and life expectancy lower.  Therefore, multiple pregnancies increased the chances of providing extra hands to help with the chores and increase farm output, but also increase the probability of the parents’ survival in old age when they could no longer work and depended on their offspring for care.  In this agrarian culture, aborting a baby would be tantamount to shooting a healthy cow and leaving the carcass to rot in the field.  It would be a foolish waste of “an asset” which could mean the difference between life and death.

In 1935, Congress passed and President Roosevelt signed into law the Social Security Act.  In 1937, the Supreme Court affirmed the constitutionality of the Social Security act in Steward Machine Company v. Davis and Helvering v. Davis, based partially on the extreme economic crisis of the Great Depression.

Thirty years later, President Johnson and Congress enacted Medicare under Title XVIII of the Social Security Act to provide universal health insurance to people age 65 and older.  At the same time, they created Medicaid under Title XIX of the Social Security Act to provide health insurance coverage for low-income citizens.

Both Social Security and Medicare (part A) are financed with taxes collected from employers and their employees.  Since 1990, the tax for both is 15.3% of wages, shared equally by employer and employee.  The self-employed person pays the full amount of 15.3%.

These taxes go into the Social Security Trust Fund and are used to pay benefits to qualified retirees.   Excess trust funds, taxes collected but not paid in benefits, are invested in government securities.  At the end of 2014, the Trust Fund contained $2.79 trillion, but Congress uses the excess funds to pay for non-Social Security expenses and issues “intra-governmental” debt to the Trust Fund.  As of June, 2015, intra-governmental debt was $5.1 trillion of the $18.2 trillion of national debt.  The Trust Fund is expected to be exhausted by 2034, at which time payroll taxes are projected to cover only 79% of Social Security obligations.

Before we go further, let me restate what you just read.  The federal government is taking contributions to Social Security from today’s American workers meant to provide their future benefits, using them to pay for current expenses, and giving the Trust Fund an IOU.  Furthermore, Social Security and Medicare contributions are not sufficient to pay for current benefits and will never be unless the law is changed.

The federal government would shut down anyone who tried to do the same thing in the private sector and throw them in jail.

Returning to the 1960’s, while the federal government was creating the “welfare systems” for seniors funded by taxes on working people, the Food and Drug Administration licensed the Pill, which was endorsed by the President and distributed by doctors in conjunction with President Johnson’s “The Great Society” program to eliminate poverty and racial injustice.  This coincided with the sexual revolution of the 1960’s during which sexual morals changed dramatically, enabling women to pursue non-traditional roles in society.  The next logical step in this social evolution was to legalize the termination of pregnancies under the theory that women had a constitutional right to privacy regarding their reproductive functions.  Hence, Roe v. Wade in 1973.

The federal government set up and has been operating for over 40 years an open-loop welfare system.  This system promises benefits to seniors which are growing in numbers based on the baby-boom population reaching retirement.  At the same time, the government encourages contraception and abortion, thus reducing the number of workers to pay into the system.  The output of the system is not dependent on the input.  In my engineering education, I learned that all open-loop systems fail catastrophically.  In a closed-loop system, the federal government would link benefits to contributions, never borrow contributions to pay for current expenses, and promote the increase in the number of employable citizens to contribute to the system.

I have already discussed the trends in Social Security, Medicare and Medicaid taxes and benefits in the Obama 2017 budget.  The question I want to answer now is what is the cost of abortion with respect to these programs and what is the alternative to abortion if the goal is to preserve Social Security, Medicare and Medicaid, at least in some form.

Prior to 1970, the number of reported abortions in the U.S. numbered in the 100’s and was effectively 0% of live births.  Was this reality?  Most likely it was not.  Estimates of the number of illegal abortions in the 1950s and 1960s ranged from 200,000 to 1.2 million per year.  Without reliable data, however, I will ignore this fact for my analysis.  Starting in 1970, therefore, the percentage of abortions relative to live births increased from 5% to an average of 42% from 1977 to 1990, declined to 35% from 1991 to 2000, and declined again to 28% from 2001 to 2010.  The declining trend seems to be continuing since 2011.

The babies aborted in 1970 would have entered the workforce in 1988.  Looking at abortion rates year by year, I can estimate the lost wages and therefore the lost tax revenues which would have been collected for Social Security, Medicare and Medicaid.

In my calculations, I assume that only 50% of the babies aborted in 1970 would have entered the workforce in 1988.  Then 25% of the 1970 aborted babies would have entered the workforce 4 years later in 1992.  Each year going forward I make the same assumption.  By 2016, the cumulative aborted workforce equals 9% of the current working population.  I estimate that this will peak at 13% of the actual working population by 2030.

I then multiply the number of aborted workers each year by the per capital income in current dollars as reported by the US Census Bureau.  I estimate the cumulative lost wages due to abortion from 1988 to 2015 to be $8.5 trillion.  This grows to $23.95 trillion by 2030.  This table shows the number of workers lost to abortion and the resulting lost wages in increments of 5-years from 1988 to 2032.

The next step is to multiply the lost wages by the prevailing Social Security and Medicare tax rates year by year.  In order to calculate lost income taxes, I recall from my earlier post that 2.7% of taxpayers pay an average income tax rate of 25.7%, while 62.3% of taxpayers pay an average income tax rate of 4.3%.

The result is that by the end of 2016, the cumulative lost tax revenue attributed to abortions starting in 1970 equals $1.746 trillion.  This is about 9% of the current national debt.   This is also two times the $870 billion in Social Security benefits paid out in 2015.  By 2030, I estimate this “cost of abortion” figure will grow to $4.47 trillion.

I admit that I am not an economist, and this is not a dynamic economic model with multi-variable analysis.  My results may be off by $100 million or more either way.  Also, I do not take into account the second generation effect.  Assuming the  aborted babies would have grown and also formed families, Mark A. Olson estimates that the population loss due to abortion since 1950, 23 years before Roe v. Wade, is closer to 126.5 million and therefore the lost federal tax revenue is closer to $15.7 trillion as of Jan. 1, 2014.  Mr. Olson contends that the U.S. would have no national debt without abortion.

Either way, it is undeniable that there is a significant contribution to the national debt from abortion due to the lost wages of aborted babies who never became adults and formed families.

In this case, does the state, which is all of the citizens, have an interest in the life of the unborn child, and his or her potential to contribute to the constitutionally affirmed welfare system under the current method of taxing income?  Who can answer “No”?

In a rational world, the state would always protect its interest.  Under the current paradigm, however, it does not.  The United States of America is on a path to financial suicide by promising welfare benefits to seniors it cannot sustain partly because we abort so many of our unborn children based on a woman’s right to privacy.  I see a new paradigm, however, with two responses in which the United States can protect its long-term survival interest –a Pro-choice response and a Pro-life response.

In a Pro-choice response, the state would pass a law preserving a woman’s right to an abortion.  However, that law would also make it clear that the abortion would have consequences to the woman.  When a woman aborts her offspring without medical exigencies, then she has no right to claim welfare benefits in her old age.

A modification of this concept would link the monthly benefit received not only to the contributions over a lifetime, but also to the number of children produced who are contributing to the system to pay for the benefits.  Would we not see an increase in the number of large families under this regime?

In a Pro-life response, the Supreme Court would reverse Roe v. Wade, negating a woman’s right to an abortion.  Instead, the woman would have the option to keep her child, or surrender it to the father or an adopting family, or finally to the state.  If the child is not raised by the father or adopted, the mother would be obligated to pay child support to the state until the age of 18.  States already have well-established systems for collecting and enforcing child support.  Under this paradigm, the state would protect itself from the burden of raising the child, and also protect the potential tax revenue it would receive when the child matures and goes to work.

By considering the interest of the state to maintain the solvency of the constitutional welfare system as primary, the politically contentious division between privacy (pro-choice) or morality (pro-life) is resolved.  In fact, in this new paradigm neither response conflicts with the other.  We could have a world where the pro-life and pro-choice options co-exist.  I call it the Pro-consequence response.   The woman with an unwanted pregnancy would face the consequence of either giving up her senior welfare benefits, or maintaining her senior welfare benefits by giving up her baby for adoption, or paying child support to the state.

Archeological excavations of ancient Carthage (north Africa) produced evidence of child sacrifice to the god Baal Hammon, the weather god responsible for fertility.   In Rabbinic Judaism, this god is referred to as Molech, and depicted as a bronze statue with a furnace into which victims were thrown under the theory that a pure sacrifice (a child) would return a bountiful harvest.  As we discussed at the opening, such thinking is folly in an agrarian society, yet it existed.  Thus, in Leviticus 20: 2-5, God gave the Jewish people the consequences for child sacrifice.

Molech

Then the Lord spoke to Moses, saying, ² “Again, you shall say to the children of Israel: ‘Whoever of the children of Israel, or of the strangers who dwell in Israel, who gives any of his descendants to Molech, he shall surely be put to death. The people of the land shall stone him with stones. ³ I will set My face against that man, and will cut him off from his people, because he has given some of his descendants to Molech, to defile My sanctuary and profane My holy name. ⁴ And if the people of the land should in any way hide their eyes from the man, when he gives some of his descendants to Molech, and they do not kill him, ⁵ then I will set My face against that man and against his family; and I will cut him off from his people, and all who prostitute themselves with him to commit harlotry with Molech.

Even though we count the costs differently today compared to agrarian societies, the foolishness of sacrificing our children is as true today as ever.  The connection between the national debt and abortion is lost national wealth and accelerated insolvency of the welfare system.  Abortion undermines our true social security by eliminating workers who can take care of us in our old age, and contributes to the open-loop nature of our current Social Security system.  Only a Pro-consequence response can solve this problem.