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.
Isn't this how you raised us to be.
Heck we are the products of a lot of your failed cultural and educational policies. It wasn't X'ers that came up with "whole language" instead of phonics. We didn't come up with new math and other touchy feely programs like not keeping score didn't children's atlethics. So when you see kids who can't read, remember they followed your generations plan.
Some in my generation are continuing down the road. Kids in schools can't have Halloween parties, celebrate Christmas and next won't be able to bring cupcakes for a kids birthday.
I applaud the Boomers who didn't fall for the latest fad and were able to raise their kids well.
I think the biggest lesson from the sixties is that one person can still do lots of harm when they think they are doing good, Rachel Carson(not a boomer).
I do think we need to tar and feather those who proposed that whole language would work better than phonics and those other bad programs from the 70s.
I agree with you 100%, that the tax is unjust. The program has been around for decades, but only until recently, when the realization of utter failure is now virtually assured, is it a popular thing to fix.
Some people in the BB generation agree that SS should be fixed now. Not in the past, but now. They just don't want it to be at their expense. I am halfway through my working life. I fear for the future with the younger generation, and i worry for the BB generation that is more interested in getting theirs, than fixing the problem.
True reform will be at the expense of all citizens. Whether its reductions in current allotments to retiring people, or removal or reduction in benefits to people who will retire in the future.
The program is flawed and must be fixed. The only real fix is making it a NEEDS BASED system like welfare. If you need it then you go and apply (remember you would be retired, so you can make time).
My buddies and I have been covering Attila's right flank since high school. The only part of the 'flower power' portion of that era I took complete and lusty part of was in the free love area ;^) .
Out of 4 best friends, 3 of us spent our full tours in country. (The 4th was 4-F from football injuries). My 4 kids range from 34 to 16 years old and we all want a phase out of SS. My kids are getting totally screwed and I don't like it.
Get this also. All the proposals I've seen pay me (born 1946) but trim my little bro (born 1950).
Nam Vet .... Oct '67 - Oct '68
Well done. But am i to understand that the reason you are entitled to your social security, is that if the government had not charged you that money, then you would have it now in the bank, since you also had to fund your kids college?
There are many people in the world who don't have their parents pay for their college. While that was great of you, maybe it would have done your kids good to take on that added responsibility, and you could have kept your $225,000. Then you would not have to ever worry about getting your illegally taken taxes back.
AIDS (then called GRID) was introduced into the U.S. in 1979 by an airline crewmember who was the in his 20s. Sorry , but he certainly was a boomer.
"Illegal immigration threatens retirements of baby boomers."
Actually, illegals working under fake SSN and not getting benefits help retirement. Similarly, the original SS model is dependent on a growing population, which illegals supply.
All that said, no me gusta los illegals tambien.
If he was born after 57' he is classified as a "shadow" boomer, not a boomer ( in reality he was a Hershey Highway fudge packer). BTW, I will think of you when my wife and I take that first years SS payment and purchase a supercharged Saturn Sky .Trickle down , you know. Got to buy American .
However, I did switch from Corona ( Mexico) to Milwaukee Best ( the Beast ) because of the Beaner problem .
True, but wasn't the original SS model based on the fact that you collected benefits after the average life span. So if we went that model, benefits would be available at 79 or 80 right.
Boomer Roger
But.... but... John McCain says that's torture, and as proud idealistic Americans we can't do that! (heavy sarc)
CSG
I'll tell you where a lot of my buddies are. Most finished up being Battalion XO and S3s within the last couple of years. Now they should be taking over as Battalion Commanders and getting ready to go back again to Iraq.
I haven't been called up for this yet since I am in a non depoying reserve unit. Our mission is to train Reserve and National Guards commanders and staff sections. Have spent a lot of time in the western US working with guys and gals who are going. Been offered a couple of jobs to go but my wife would kill me if I volunteer.
The entire thing is screwed up.
another solution...NOBODY BUT NOBODY GETS A PENSION FROM THE GOVT OR PRIVATE INDUSTRY UNTIL AT LEAST AGE 62....
Had we had the courage to do what needed to be done, we'd all be retiring in tall cotton. Just look what Chile did with their retirement system, and that was/should be the model for us. otherwise, invest in foreign market mutual funds,i.e., Russia Fund.
we will go from wasting millions and millions on chronically ill people so they can lie in bed, suffering, to killing them because of "mercy"....we apparently have no middle ground...
that's because of people like me, who would have lost out of traditional SS because I would be under that 55 yr threshold they were talking about...my husband would miss it too....
here's the deal...I am a traditional wife who has worked part-time practically my whole life in a sector that does not give out pensions or medical retirement benefits....I always relied on my husband's work to provide that.....
well, his pension and our future was stolen thru a phoney baloney bankruptcy, so we are both stuck and neither of us can do without SS when we get to that age....
if your a govt worker like a teacher or postal clerk, you have nothing to fear...you can sit back and pull in your big bucks...
the rest of us underlings can not and NEED the Ss money to which we certainly have worked for.......
yes he did....he had a young genius, I forget his name, who wanted to make big changes, but the only changes allowed affected the workers only, not the recipients.. I was going to pay more, I was going to work longer and I was going to get less....
no one has ever thought..hey, there's SS recipients out there that are rich and do not need more govt money from the underlings......
......we just can't take away a benefit from someone once they get it...its like a sin or something......
and that's why we have the 65 yro's and the 70 yro's and the 80 yro's just a hooting and hollering about not changing Ss....its been a BOOM for them.....
for the record, I do think the younger people are getting the royal tax shaft....
Actually, you have no idea about my age or inclinations...and if you propose to financially cannibalize your children, then you have every reason to fear. Older people have a well-earned reputation for greed and short sightedness. There are exceptions, of course...I associate with a lot of retired people who are totally outstanding. The difference, I guess, is their sense of personal responsibility. That usually correlates with their willingness to be led around by the nose, with the AARP and the RAT party on the other end of the leash.
Older people are no different than anyone else, I guess...if anything they will find a limit on the willingness of others to be taken advantage of. Any long term fixes to the program and to Medicare will be done in spite of, rather than because of them. This will limit their input on the final solution. That's the inevitable result, I guess, of becoming part of the problem, and refusing to be part of the solution.
I'll be working until at least age 70, and I'll have taken care of my retirement needs and then some. I have no expectation whatsoever of SS or Mediscare. I'd be more than willing to freely release any claim I have on the system, if my adult daughter could invest her contribution in a private account.
That's another difference between you and me, I guess...I'm looking for ways to reduce the burden my daughter will have to shoulder. I'm not looking for ways to hamstring her to pay for my SS. I have no inclination to stick my hand in her pocket.
SS has been a fraud since 1935. I acknowledge I was had, though not voluntarily; I recognize that fact does not give me license to scam someone else. Consider the truth in the saying...it's impossible to cheat an honest man.
Who raised today's "sick" generation. Actually, on the whole, the current generation seems to be much more sane than the 60's and 70's generations.
Ah, the clever sophistry of old coots, the OP's point was the (supposed) endearing love of boomers to the previous generation.
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