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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.
It is all over but the finger pointing.
I think you have that concept screwed up. It is the people who invented the ponzi scheme that screwed the country. The prior generation invented social security and counted on screwing the income of the boomers to pay benefits to them...benefits they never made any contributions to cover. Now, the boomers complete a lifetime of work and find their contributions were handed to the prior generation of ponzi looters. There isn't anything there for people who actually paid for a lifetime.
I just heard of a new social security entitlement. It is paid for a disability termed "authority aversion". This is a bureaucratic label for people who refuse to work.
yep. and this clown knows he'll be long dead before it happens so he pontificates. the Fed should have been a government agency long ago, they've preceeded every economic disaster of the past 35 years with idiotic policy.
I take your point, but the boomers are the ones who have turned social security into their own personal piggy bank for social programs that they refuse to fund on a current basis.
Many of us will be working till we drop dead.
Unless your employer decides your to much of a medical risk, and hires illegal aliens to replace you. You know, the illegal aliens companies love, the ones that could care less about meds or benefits, will work hard for 6 bucks an hour, and wouldn't know a labor law from an enchilada.
Maybe if the boomers hadn't been so selfish as to turn the pill, and abortion on demand there would be enough people working to support them.
Estimates of the coming insolvency of the SS fund are in the realm of 2020. Solutions involve privatization for younger employees and moving the eligibility age up for thouse nearing retirement. The current law allows the collection age to be at 62.5 and 65. Watch for this to raise with an effectivity that defines where privatization should be started.
The real problem with doing anything about SS is the democratic party via the AARP tells the country's elderly (who vote like crazy) that the republicans are gonna throw them out on the street.
Current babyboomers should already have made plans to supplement SS, since the living on SS is pretty skimpy.
Please don't forget that Pres. Bush is on board to extend Social Security benefits to ILLEGAL aliens.
Check it out:
http://www.freerepublic.com/focus/news/1200467/posts?page=125
"How does this work anyway?"
Social Security and most government employees do not have to count on Social security benefits. They have another plan, much better. Understand this...the people who approve and control your benefits never have to suffer under the same system. Equal under the law....what do you think?
And it's amazing how the dems and pubs might not save SS in cyclical deficits, though they raided the fund before.
Abortion and birth control chickens coming home to roost.
Its more likely you will be required to pay even more for the nothing you will recieve.
Gen-Xers don't look at it like it's "their" money. We've been told for decades that it won't be there for us. I think that we're used to taking care of ourselves.
That has been my plan all along.
Just as boomers begin to face the dilemma of age discrimination in the workplace, we also now face the possibility of having to work longer to collect reduced benefits. What are we supposed to do when we can no longer work, or we can no longer find work, yet Social Security remains out of reach for us? Beg on street corners?
"ADD is one"
ADD is a shoe-in for benefits. My son was instructing a 40 year old student at a community college. He gets SSI for Adult attention deficit disorder and the government is sending him to college for a degree..........But yet SSA won't approve things like...an inoperable brain tumor the size of a lemon. This refers to a friend who I went broke supporting while waiting for SSA to approve. They sent him to a shrink. Remember that the lawyers and psychologists have taken over the SSA system as well as most social services.
You can read about this craziness from signers of a petition that are going through this mess:
http://www.PetitionOnline.com/SSDC/petition.html
Sadly there are millions of boomers who are banking their retirement on social security. Somehow they think the billions they owe on their credit cards will disappear too.
"Authority aversion"? Kuuuwel . . . I've had that all my life but I never dreamed the government would pay me for having it. Just when you thought they couldn't get any goofier . . .
"What are we supposed to do when we can no longer work, or we can no longer find work, yet Social Security remains out of reach for us? Beg on street corners?"
You do what thousands are doing now, that the social security system can't process claims for 5 or 6 years. First you go through your IRA's and savings. Then you rent out your home because you worked like a dog for 40 years to pay it off and be "secure". Then you sell your home because that's all that's left. Now, all this time you are sick and have no medical care, so social security tells you all your medical info is too old....get them new proof. SSI, the welfare portion of the SSA...which requires NO work or benefits paid provides for medicare immediately. Not so if you've paid into the system.....you must wait another 2 years after approval to get medicare. They count on you dying first...many do.
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