The Return of Thrift: How the Coming Collapse of the Middle-Class Welfare State Will Reawaken Values in America.

• Author: Lee, Susan

Let me say it straight out: This is a book at war with itself. Phillip Longman manages to argue that an overactive government is both the cause of and the solution to the financial mess we are fast approaching. Unfortunately, his solution is so bad that, in the end, it overpowers his good exposition of other matters.

Most of The Return of Thrift: How the Coming Collapse of the Middle-Class Welfare State Will Reawaken Values in America is descriptive. Longman, a prize-winning journalist who has written on Social Security, runs through the history of how the age of entitlement was born, what specific government programs Americans have become "addicted" to, and the nature of the coming financial crunch, when claims on government revenues will far exceed its call on resources.

Although this territory is familiar to anyone who has even the faintest understanding of domestic economic policy during the past 40 years, Longman's discussion works to remind us of how far we've traveled down the path to a middle-class welfare state. During the Great Depression and even up to the 1960s, he notes, Americans considered it humiliating to receive help from the government. But today, Longman points out, over 50 percent of all U.S. households contain at least one person who receives a direct entitlement benefit from the government: veterans or Social Security pensions, unemployment compensation, or disability payments. These benefits add up to $750 billion, or more than half of the total federal budget. At any given time, 30 percent of the U.S. population is eating up indirect benefits - those expressly designed to subsidize an anointed group such as homeowners, farmers, or senior citizens - that the government delivers through loopholes in the tax code.

Worse, these benefits, which are often characterized as aid to underprivileged or needy citizens, are mostly enjoyed by the middle class. Of the trillion-plus dollars the United States spends each year on direct and indirect entitlements, only a tiny fraction actually goes to poor people.

Such information is, of course, not exactly news. Nor is it news that this situation cannot continue without impoverishing today's workers, who are subsidizing the consumption of today's retirees, rich and poor alike, through Social Security, Medicare, and even to some extent the underfunded private pension system. This overwhelming burden - the product of early retirement, advancing life expectancy, and fabulously generous...