Why does entitlements leads to lower US productivity?
"Well, the basic issue is the entitlements and the reason it's a
  problem is that people put money in their own funds and their
  employers' funds plus interest and that is what they perceive they et
  back , and therefore they are entitled to it because it is their
  money."


He's saying people think that they receive the income that they are putting into the program.  For example, a common perception that people have about social security is that it is simply a forced savings program: I put in \$50, that \$50 is put into a vault somewhere, then pulled out later, and given back to me for my retirement.

That's not how it works. I put in \$50, and we spend it immediately on someone's current retirement, or a number of other pre-approved (and sometimes seemingly unrelated) programs. We then hope that some new young person puts in another \$50 in time for my retirement.

This is particularly a problem as that the number of retirees is going to grow while the number of young people putting money into social security is going to shrink. In fact, this is a problem if productivity declines in any way, and the amount going in is limited or restricted, or fails to grow.

Questions 1/3: He is not saying that entitlements cause lower productivity in this statement-> he is saying entitlements will have problems -because- of lower productivity (probably from lower population, as has been popular to discuss for quite some time).

Question 2: Capital stock is the collection of tools available for production.  (Hammers, technical know-how, computers, assembly lines.)