Posted on 10/04/2006 10:47:36 AM PDT by SDGOP
Unless Social Security and Medicare are revamped, the massive burden from retiring baby boomers will place major strains on the nation's budget and the economy, Federal Reserve Chairman Ben Bernanke said Wednesday.
"Reform of our unsustainable entitlement programs" should be a priority, he said in prepared remarks to the Economics Club of Washington. "The imperative to undertake reform earlier rather than later is great," Bernanke added.
It marked the Fed chief's most extensive comments to date on the challenges facing the United States with the looming retirement of 78 million baby boomers.
In his remarks, Bernanke did not offer Congress and the Bush administration recommendations on how the massive entitlement programs should be changed. Efforts by the administration to overhaul the Social Security program _ once a centerpiece of President Bush's second-term agenda _ sputtered last year, meeting resistance from Republicans and Democrats alike.
As the population ages, the nation will have to choose among higher taxes, less non-entitlement spending by the government, a reduction in spending on entitlement programs, a sharply higher budget deficit or some combination thereof, Bernanke said.
Government spending on Social Security and Medicare alone will increase from about 7 percent of the total size of the U.S. economy to almost 13 percent by 2030 and to more than 15 percent by 2050, he said.
Bernanke declared: "The fiscal consequences of these trends are large and unavoidable."
The government recorded a budget deficit of $319 billion last year. This year's red ink is projected by the White House to total around $296 billion.
Financially shoring up Social Security and Medicare will involve difficult choices by lawmakers and other policymakers, Bernanke said.
For instance, if the government tried to finance projected entitlement spending entirely by revenue increases, the taxes collected by the federal government would have to rise from about 18 percent of the total size of the economy to about 24 percent in 2030, he said.
In his speech, Bernanke did not discuss the future course of interest rates.
The Federal Reserve meets next on Oct. 24-25, and many economists believe the policymakers will leave rates unchanged for the third meeting in a row.
With the economy slowing, the central bank in early August decided to halt _ for the first time _ a two-year long campaign to boost interest rates to fend off inflation. Policymakers suggested that the cooling economy would eventually lessen inflation pressures.
There's been relief on the inflation front as once-surging energy prices have settled down. Gasoline prices, which had topped $3 a gallon in the summer, have slid and are now averaging $2.31 a gallon nationwide, the Energy Department says.
Yeah, it's not your fault. The post-WW2 generation produced lots of children and it seemed like it would always be that way. But it wasn't. We boomers didn't have enough kids to perpetuate the scheme.
There are a lot of reasons for that; scares about overpopulation in the '60s and '70s had an effect, social changes that brought women into the workplace in droves instead of starting families, materialism and careerism overcoming the desire to grow the population by having families... hindsight is 20-20.
But this isn't the time to play the blame game. It's time to talk seriously about a solution that doesn't bankrupt Gen-X and doesn't starve their parents when they get old.
It's a bit of a stretch, how 'bout: "don't pay for anyone over 65", (military excluded)
It is your generation of morally depraved, self-absorbed, sexually obsessed, droopy-pantsed, Godless morons who are turning America into a nihilistic cesspool.
We've been watching all those tv shows you produced.
W did, and got his teeth bashed in for it...I'm not so young I don't remember old folks chasing Congressmen down the street, whacking them with their canes during the last "permanent fix," during the '80s.
I have a lot less sympathy for old people than I used to...and they're to blame.
Interesting. I must admit, I have a lot less sympathy for people your age who're whining about this now. And people like you are to blame.
I'm glad you aren't my kid, I'd be really afraid for my future.
Bullship.
My monthly SS amount is a little over $2K/month. If I had received a lump sum payment at age 65, based on what I paid into the system using a 5% annual % rate, the gummint would owe me $3.3 Million. You don't know anything about present value or you would never have made such a ridiculous and ignorant statement.
Right-on bro. My desert retirement home will have a long dusty road from the gate to the house. Please ring the bell at the gate before you start down that road. cackle out load.
Not if they're getting paid cash under the table.
I know. But the point I was trying to make was that the big propaganda has been that those entering or currently in their retirement years right now were all going to move to Florida and sit around playing shuffleboard and their was going to be this big brain drain.
Many of them aren't retiring. They are continuing to work long into their retirement years.
Some will from desire, and many from necessity. I have no intention of working any longer than I choose to, and my retirement destination sure won't be Florida - or shuffleboard! :)
Bad boomer. Selfish boomer. Get yourself out to that ice flow and take it like a man.
As you put it so seriously this generational warfare is simply the same old liberal class warfare crap and a set up to make social security means tested. My guess is that if you've done the ant thing you're probably going to be means tested out of getting any of your money back.
After all, you're one of those rich jerks that takes advantage of tax loopholes, didn't play by the rules, yada, yada, yada the usual talking points about anyone that's worked hard.
I was born in 67 so I wasn't sure what it was. I knew someone who paid it would know and correct me.
"I want every damned penny the government stole from me in the last 40 years ."
Interesting opinion. With that reasoning, none of us should be paying taxes that do not directly benefit us. So if you paid 7.5% of your taxes in your lifetime to SS, and you paid an additional 2.9% to Medicare, then the remaider would be used for things like the military (indirect benefit, but at least it is something for you), roads (if you use roads, as opposed to sitting in your house your entire life), public schools ( if you or your family went to school).
However, what about the taxes that didn't go to things that benefitted you the taxpayer. Part of my taxes im sure goes to the national endowment for the arts. I may see some obscure benefit in my life, but really, I don't think it is something the government should be paying for. How about all the little earmarks that add up to billions of dollars for pork projects in other states.
Do you want a refund of your taxes that they stole from you to use on frivilous projects that don't benefit you? I don't agree with your position that you are entitled to one dime of your tax money. It is also that position that keeps the system from being changed.
Social Security is not an entitlement. It was not set up that way, nor should it be treated as one. Just because you pay some tax that they have twisted our arm into paying, doesn't mean you are entitled to one cent of it back.
True reform would be to immediately make SSI a needs based system. Lower the actual rate for all tax payors now. Give to people only enough social security to pay for the basic necessities of life (top of poverty level). Why should our country be bankrupted by mismanagment in the future? It shouldn't.
The last issue, that has been stated a few times is that it was the FDR generation that caused this problem. I'm sorry baby boomers, but it has been your generation that has been leading this country for many years now, in all sectors of government, if you thought it was so bad, then why didn't you change it?
Bernanke is right, Bush was right and the GOP failed to address this very looming problem in our country. I am willing to live at the poverty level in the future if I do not plan ahead. But for people who have succeeded in life, will have paid an effectively higher tax rate over the years. I will gladly forgo any SSI that I would be entitled to in the future. It would be nice if the tax rate I was paying would be less, so my tax dollars that surely won't be around in 30 years, don't put another $20k in the pocket of a millionaire each year.
The boomers have had alot of success particularly in the real estate market over the years.
"It is your generation of morally depraved, self-absorbed, sexually obsessed, droopy-pantsed, Godless morons who are turning America into a nihilistic cesspool."
Can I use that as my tagline? haha
The money the government took under the guise of a retirement fund for the future wasn't TAX money . Social Secutiry payments are not a tax . It is money taken from citizens without any recourse to invest in their own future the way they want . It is outright Socialism .
BTW, If I hadn't planned on future retirement, my two sons (X 'r and Y'r ) would be up to their necks in student loans . Two full college expenses without scholarships ( out of state and not jocks ) worth a minimum of $225,000 after tax dollars .
Yeah, and YOUR generation gave us MTV and Rap music ( Grunge too) That's about the extent of your contributions to today's society.Oh , I forgot AIDS, which wasn't heard of in our generation.
Boo frickin' hoo. They'll strain SS for 20 years or so, and then like the ripple in the pond, all will be still again.
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That is a lie. The rate in 2003 (the last year cired on the SSI site) was less than 2% higher than it was in 1973. The maximums have gone up but they have certainly not kept pace with the increase in salaries. In 1973 one could own a home, two cars, raise kids and take vacations on $25k per year...try that today.
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Ah, the ignorance of children....that phrase was from a TV movie written by a guy who was nearly sixty at the time, a time when the oldest boomer wasn't out of his twenties.
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