Chart of the Day: Crowding Out Effect from the Welfare State

From Bloomberg Brief (source Zero Hedge) [bold original] 

Policy choices made in the near-term will affect the economy for years to come. If not addressed, current debt and spending dynamics will probably lead to a reduced growth path, placing at risk expenditures on vital social programs and, over time, crowding out private sector borrowing that funds the gross private domestic investment necessary to boost productivity and living standards. Dollars spent on entitlements dwarf those spent on discretionary items such as education, and tower over net fixed business investment, which is partially responsible for greater productivity, business expansion and rising living standards. Periods with greater investment as a share of GDP are highly correlated with both faster economic growth and rising living standards. One risk to the U.S. economy is that rising entitlement spending will require the government to borrow from the finite amount of capital held by private savers, thus squeezing out private firms that need the capital to expand businesses and increase productivity 

Inflationism (devaluation) will NOT solve the problem wrought by parasitical relationships. The greater the entitlements/welfare state, the lesser economic growth. Such untenable relationship ultimately leads to a crisis. Thus, the only recourse to such predicament is through a substantial reduction, if not the abolishment, of the welfare state accompanied by a liberalization of the economy.