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Posted on 08/27/2004 8:10:16 AM PDT by ladtx
JACKSON, Wyo. - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said Friday that the country will face "abrupt and painful" choices if Congress does not move quickly to trim the Social Security (news - web sites) and Medicare benefits that have been promised to the baby boom generation.
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Returning to a politically explosive issue that he has addressed a number of times this year, Greenspan said that it was wrong for the government to hold out the promise of more retirement benefits than it is capable of providing.
He said this issue was particularly critical given the impending retirement of 77 million baby boomers born in the two decades after World War II.
"As a nation, we owe it to our retirees to promise only the benefits that can be delivered," Greenspan said in opening remarks to a two-day conference sponsored by the Federal Reserve Bank of Kansas City on the challenges posed by aging populations.
"If we have promised more than our economy has the ability to deliver, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels," Greenspan said. "If we delay, the adjustments could be abrupt and painful."
Greenspan, as he has done previously, suggested that possible changes would be raising the retirement age to receive full Social Security benefits, which currently is gradually increasing from 65 to 67.
Greenspan, who is 78 and was recently confirmed for a fifth term as Fed chairman, has been a proponent of raising the retirement age ever since he was chairman of a commission that recommended a number of changes to rescue Social Security from impending insolvency two decades ago.
In his remarks, Greenspan said that the projected doubling of the U.S. population over the age of 65 by 2035 would add to the government's budget deficit woes.
But he said it was important to be careful in how those deficits were addressed. He said that relying entirely on an increase in the payroll tax on workers to deal with the funding shortfall in Social Security and Medicare would make it more costly for employers to hire workers.
Greenspan said policymakers must consider all the economic impacts that changes in the government's two biggest benefit programs would entail such as the effect on retirement decisions, the size of the labor force and the saving behavior of Americans.
Greenspan acknowledged that any decisions to trim benefits or boost payroll taxes could be difficult politically, but he said those decisions must be made and made quickly to give baby boomers time to adjust.
"Though the challenges of prospective increasingly stark choices for the United States seem great, the necessary adjustments will likely be smaller than those required in most other developing countries," he said, noting that Europe and Japan will have a much higher proportion of retirees to current workers in coming years.
Greenspan has repeatedly this year addressed the looming crisis in Social Security and Medicare, a development that the presidential candidates have chosen to virtually ignore given the painful choices that will likely be presented to the next president.
Here's the Bush agenda for Social Security. He's the only one with the political nutsack to address the issue instead of pandering.
http://www.georgewbush.com/SocialSecurity/Brief.aspx
The Kerry plan to “strengthen” Social Security is of course to raise taxes. That’s it.
Maybe we'll get to work till we're 75. That should solve the Social Security problem.
Wonder what they call near retirement?
And Mr. PONZI comes to visit.........for a long, long stay.
Depends on the meaning of the word "near".
it's amazing that people let the dems and pubs steal the social security surpluses of the last several decades.
If Kermit the Frog Greenspam thinks that us boomers are banking our retirement on social security he's got another thought coming...
Can't W find someone to replace this relic???
After all, he's keeping someone else from drawing his salary...
I'm sure he and his wife have made a ton of money on the Market since he's been at the Fed!!!
THIS JUST IN!
Social Security renamed Catch-22 Security.
That is, the closer you get to the designated retirement age, they raise it again!
Mommy, please make the Ponzi scheme go away.....
And what about all of those government retirees? I know several government retirees (social security, land conservation to name just 2) that are just retired. At ages 58 and 60! They were pulling in some big bucks and are apparently retiring at almost full salary.
How does this work anyway?
What is the definition of "a near-retiree"?
Can't do that, then he'd just start drawing a SS retirement check.
Since they're reneging on their promise, what's the odds that they'll just give me all my money back with interest? I'll go ahead and invest it on my own.
Just give me back what I've paid in so far, and let me opt out of the system.
The Ponzi bubble always bursts.
the day of doom moves closer each day...
Social Insecurity was a program designed to self destruct, and was designed knowing that more benefits would be paid in by its members than the member paying into it would ever receive before they died. Social security/mediscare would be more solvent benefits were only paid to those who paid into it.
Illegals should not be eligible at all. If illegals knew they would not receive ANY unearned benefits in the US, they might not be so prone to cross our borders.
Ditto.
This is going to get really, really ugly within my lifetime.
I'm with you! Just think what we could do with that money! They already have raised my retirement age to 66. When I finally do make it to 66, they will have raised it to 76! Looks like I'm going to be working until I drop dead!
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