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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.
You were born in the wrong country. If you were Mexican you would only have to work 6 quarters before collecting. Social security to Mexico will be started after Bush is re elected. It is on schedule. The bill is already in the house ways and means.
http://waysandmeans.house.gov/media/pdf/ss/mexicofacts.pdf
You nailed it right on the head. While SS is going down the tiolet and private companies are eliminating pension plans, more and more gubbermint workers are being offered and are retiring under lavish pension plans. Here in California they are giving away the farm to the public employee unions. Police, fireman, prision guards and park rangers can in some cases retire at age 50 with 90% of final salary plus medical for life. Other state empoyees can get up to 60 or 70% of salary. My brother is an engineer for the state and is planning on retiring in his early 50s. Will be interesting to see what happens down the road when John Q. Public gets notice from the SS Admin that he needs to work til age 75 just to be able to collect a pittance from SS, while his neighbor just retired at 50 to a life of leisure on a public pension. The freaking gubbermint is robbing us blind so it's workers can retire early!
Does the Gummint really expect that all 77 million are going to go quietly?
Best case, we will see a third party arise. Worst case... use your imagination...
I just want my local smirking lawyer-in-office politician to publicly tell everyone my age why they should be happy to pay for others' welfare all their lives and then be told that we have to become beggars in order to receive the same benefits that everyone for whom we paid got for free, and why we shouldn't object to that. I want to hear them explain that. I want them to explain why "Needs-Based" doesn't just mean "Socialism. I want to hear that too.
How dare he hand Bush this issue on the eve of the convention...
Yep, it's just another TAX.
Of course, they can't force me to work, and frankly, if these taxes get too high, guess what?
Yep, taxation does have negative effects on the economy!
"will work hard for 6 bucks an hour"
Yes, by blowing at invisible debris with a leafblower or by mowing the same part of the lawn over and over.
Like busywork..quantity is more important than quality.
BUMP.
I'm hoping the President will promptly tackle SS reform upon his reelection.
An accountant who is in good health can continue to work beyond age 70. But what about a construction worker?
Should the retirement age vary by occupation? Should healthy people have a later retirement age than unhealthy people?
Good to see you, fire_eye. Ask those legislooters now, see what they say. The responses I've gotten so far is something like, "Yea, it's bad, I don't know what SSA is doing". I told an aid to Wally Herger a few weeks ago that THEY should know what SSA is doing and it is they who have oversight and control these regulations, why did they think I was calling them...???.....
"I'm hoping the President will promptly tackle SS reform upon his reelection."
I was hoping the President would promply tackle SS reform upon his election. I'm willing to forgive him, because of prevailing circumstances, like war. He did throw a bunch more money at the SS administrative budget, it's about 8.5 billion dollars a year, to hire more Administrative law judges. Some one tell me why they can't have competent employees to make decisions and not take 5 years to approve a claim only after you must hire an attorney and go before their government judges. Know why? Tenure...fed employees can hardly be gotten rid of. The system needs an enema.
THANK YOU!!!!!!!!!!!!!!!!!!!
Of course SCREW the old folks who BUILT this country, Let's take care of the Illegals so they can vote in the Crooked Politicians.
NO become an Illegal Alien, Break the law and you will have the red carpet rolled out for you!!
WORK UNTIL YOU ARE 75 SO WE CAN CONTINUE TO HELP ILLEGAL ALIENS GET SOCIAL SECURITY BENEFITS.
PPLLEEAASSEE!!!!!
>>The Kerry plan to “strengthen” Social Security is of course to raise taxes.
Kerry said he would not pay out more than we paid in....so the "rich" in SS will get the shaft.
Never trust the Democrats.
In order to give those who claim to have committed felony document fraud for 6 quarters full SS benefits, they're going to have to take much away from Americans. Vicente Fox is demanding this -- so Americans had better just bite the bullet and quit planning to retire.
It's hard to understand Bush on this issue --- one time he's good and talks about privatizing our retirement but then he wants to give our retirement to those who would claim to have committed felony document fraud.
It's not just that though --- abortion is just plain wrong --- but Mexico with it's very very high birth rate is having even more problems with it's retirement plan:
"The combined obligations of state pensions have ballooned to 120 percent of Mexico's $600 billion economy."
"The health care workers union, however, has begun building support among other state workers to block further changes by setting up traffic-snarling roadblocks and timing a national march and other disruptions to coincide with Fox's state-of-the-nation address Sept. 1."
http://www.signonsandiego.com/uniontrib/20040807/news_1n7mexico.html
Which is probably why our government is going to cut Americans from SS to bail out the citizens from and living in Mexico.
Every 3-5 years the retirement age should be increased 1 year. If implemented consistently, people could plan for that and the problem would undoubtedly be solved.
Just finished the article (ooops!). Looks like big Al feels the same as I do.
Nice of him to throw this out there during the election season, huh?
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