Posted on 05/09/2014 12:23:17 PM PDT by Kaslin
The Census Bureau just released a report on America’s aging population.
The big takeaway is that our population will be getting much older between now and 2050.
And since I’m a baby boomer, I very much like the fact that we’re expected to live longer.
But as a public finance economist, I’m not nearly as happy.
As I explain in this interview with the Wall Street Journal’s Digital Network (and as confirmed by BIS, OECD, and IMF data), the United States is going to get deluged by a tsunami of entitlement spending.
Dan Mitchell Discussing the Slow Motion Train Wreck of Entitlement Spending
I mentioned that it’s important to focus on the ratio of workers to retirees. This “dependency ratio” matters because economic output largely is a function of an economy’s working-age population.
To cite my famous cartoons, you need a sufficient number of people pulling the wagon to support those riding in the wagon.
Here’s a chart from the Census report to help you understand the magnitude of the problem. As you can see, both in the United States and other nations, the increase in the dependency ratio is almost entirely the result of aging populations.
This is why I said that we face a slow-motion train wreck because of poorly designed entitlement programs.
But the good news is that there is time to reform those programs and avert a crisis.
Which explains why I probably sound like a broken record about the need for genuine entitlement reform.
In a column citing the new private pension system in the Faroe Islands, I gave the arguments for modernizing Social Security with personal retirement accounts.
But we also need to deal with the health entitlements.
Here’s how to fix Medicare.
Saving Medicare: Free Market Reforms Are Better than Bureaucratic Rationing
And here’s how to fix Medicaid.
Promote Federalism and Replicate the Success of Welfare Reform with Medicaid Block Grants
By the way, some of the damaging provisions of Obamacare can be de facto repealed by including them in the Medicaid block grant, so it’s a critically important reform.
Needless to say, I think these reforms are far better for the economy than the big tax hike Obama has endorsed to deal with the giant financing gap.
P.S. For a clever look at the worker-dependency ratio, check out the party ship produced by a Danish think tank.
P.P.S. The interviewer also mentioned that America’s racial composition is changing, which gives me an excuse to point out that Social Security reform is particularly beneficial for blacks because of differences in life expectancy.
No, its not the "poor design." They are designed to do exactly what they are doing -- give more and more people government benefits paid for by borrowing or an ever-shrinking tax base of the "rich." The issue is worse than that. Its that a lot of people like their benefits, don't want them cut back and think that the "rich" should pay for them. Its a death spiral that may not be able to be stopped.
Nothing that MADE IN USA won’t fix. Bring the exported jobs back and the economy will again prosper. Social Security is losing a ton of money not paid on imported goods.
It is moving fast these days and the train wreck is about to happen.
bfl
On the one hand, among the many Official Positions of the US Military are “to run to the sound of the guns, “ and “ - - we leave no man behind. - - - “.
On the other hand, the US Commander in Chief’s Official Policy has been, and is now, to “Lead from Behind.”
Which is the hand that offers the most protection to those we hire to be put in harm’s way to protect us?
IMHO, the two hands are mutually exclusive.
After THE TRUTH is revealed by Trey Gowdy’s Select Committee, severe punishment must be meted out that will serve as a deterrent to any future Commander in Chief who tries TO MAKE SURE THAT IT DOES HAPPEN AGAIN.
To cease to severely punish the guilty, is to cease to have reason for Law and Order.
Currently, B. Hussein Obama is Guilty of Treason until proven Innocent.
No need to flame me, as ONLY in US politics is someone Guilty until proven Innocent.
The rest of us must comply with the Law of the Land: Tell the Truth, accept responsibility for one’s actions, and comply with THE LAW.
This is in glaring contrast to what the Obama Administration’s, (and the Democrats who still support Obama), Rules of Conduct have actually been for the last 5 years as follows:
LIE, DENY AND REFUSE TO COMPLY.
The choice is clear for the Democrats: seek the Truth with Select Benghazi Committee Chairman Gowdy, or continue to embrace the CULT OF OBAMANATION: Lie, deny and refuse to comply.
BTW, Democrats in the US House: ALL y’all are up for re-election this November - - - - .
The REAL Mistake was in labelling them”Entitlement Programs”!!!!!!!!!!!!!!!!!!!!
“And since I’m a baby boomer, I very much like the fact that we’re expected to live longer.
But as a public finance economist, I’m not nearly as happy.”
No worry. Obamacare was designed to prevent the elderly from living too long. Essential healthcare will be unavailable or withheld. End of life “counseling” will result in voluntary euthanasia and ultimately mandatory euthanasia for the elderly masses.
Nonsense. We were promised in 1964 that the SS was in good shape and would always be in good shape.
http://www.socialsecurity.gov/history/ssa/usa1964-2.html
Self-Supporting
“The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite future—without any subsidy from the general funds of the Government.
Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.”
And here is where YOUR MONEY WENT! Read and weep!
http://www.socialsecurity.gov/OACT/ProgData/fundFAQ.html#n4
A great number of those abortions served to eliminate unproductive future members of society, if you think about it.
Please elaborate.
It’s having to do with large city ‘urban’ populations, if you get my drift.
Oh yeah. I get your drift.
It's just that you're too weak to say it outright.
Jesus Christ: You can’t impeach Him and He ain’t going to resign.
How about YOU say “it” outright, in 10 words or less.
“...interest on the investments of the social security trust funds...”
//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA, all that “interest” on the “investments” must be in the same lockbox with the hen’s teeth and the frog’s hair.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
