The First Welfare State to Fall: GM?

George Will has a great column, describing how the first welfare/entitlement economy to fail will be the automanufacturer GM.

WASHINGTON -- Who knew? Speculation about which welfare state will be the first to buckle under the strain of the pension and medical costs of aging populations usually focuses on European nations with declining birth rates and aging populations. Who knew the first to buckle would be General Motors, with Ford not far behind?

GM is a car and truck company -- for the 74th consecutive year, the world's largest -- and has revenues greater than Arizona's gross state product. But GM's stock price is down 45 percent since a year ago; its market capitalization is smaller than Harley Davidson's. This is partly because GM is a welfare state.

In 2003 GM's pension fund needed an infusion from the largest corporate debt offering in history. And the cost of providing health coverage for 1.1 million GM workers, retirees and dependents is estimated to be $5.6 billion this year. Their coverage is enviable -- at most, small co-payments for visits to doctors and for pharmaceuticals, but no deductibles or monthly premiums.

Read on.