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.
I understand perfectly that I am not paying in my OWN money, thank you. I've had FICA taxes taken out for thirty years, I do know how it works.
I'm saying that having paid into the system is the qualifier for being able to collect from it. I did not say, or even imply, that it was the same money.
"Oh, that's right. We never did that. We may have not liked it, but we didn't whine about it. We had too much respect for the generation that raised us to do that."
Tail-end of the "boom" generation here. Begging your pardon, but I recall hearing PLENTY of b!tching about OASDI and Medicare from boomers over the last 25 years.
In any event, taxes will increase and benefits will be reduced. Like it or not, these programs aren't going anywhere.
President Bush's answer to this inevitable problem is to grant amnesty to 20 million illegal Mexicans living in our midst. The Democrats' answer will be to raise everyone's taxes to 50%, while the younger generation pushes for legalized "assisted suicide" to get rid of the elderly 'problem'. The fact that we've aborted away 45 million American taxpayers, (one third of an entire generation), is coming back to haunt us. Probably all three of the above 'solutions' to the problem will find their way into being.
What you paid in, and what you will collect are a huge discrepeancy. Your getting ALOT more than you paid in becuase benefits have grossly increased. Just because you did something, doesn't make it right. Social Security has always been a ponzi scheme which is nothing more than vote buying for corrupt politicos. Sorry you had to pay for it, doesn't mean i have to.
I really all comes down to "Redistribution of Income" and who has the "VOTES". The Dems just analyze income, age, population distribution etc., then formulate a variety of policies to insure that a majority of voters are "Takers". "ROI", short for "Return On Investment" may come to be political shortspeak for "Redistribution Of Income".
They were wrong.
Yeah, it's nice to find that out after all these years. When I was young, it was commonly referred to as Social Security Insurance. When I got older and learned what a Ponzi Scheme is, I said "hey, that sounds a lot like Social Security".
But we need to stop complaining and start trying to come up with a humane alternative. You may have parents too, and they may not have enough left to support themselves once these programs go belly up.
If and when that happens, you may face the uncomfortable prospect of paying for their medical bills out of your own pocket, or having them put to sleep like an old dog.
Time to talk about phased privatization.
Amen, sister! I have been working since I was 16 (I am 55 now) -- paying into SS and Medicare. My husband and I have also contributed to our pension plans, IRA's and 401k plans. We probably won't be able to retire at 65. My grandparents never paid into SS and got benefits. My parents are in their 70's and have gotten more in SS benefits than they ever paid in, thanks to me and other baby-boomers. I will be lucky to get out what I paid in --if I live that long.
I won't disagree, but if I know the money is not going to be there, what good is being "qualified". A "a new deal" needs to be formulated.
Why should I pay in to this current ponzi scheme? Especially at much higher rates than you had to pay? Why sacrifice for a generation that on the whole, has led the 'life of riley' (compared to previous and post generations), and has generated more wealth for themselves than any other generation, ever, in the history of this planet?
Honestly, I can't afford it. Your generation has a chance to redeem itself in the eyes of the rest of America. Make a real sacrifice.
I have told my wife, and she agrees, that we should go outside and wait as the missiles are incoming. Same plan for a major quake or any other disaster.
Most of us have reconciled that death will come. Being disabled myself, I would welcome it.
(I didn't intend this reply to be macabre.)
Frig you ! I planned for retirement AND if I was able to invest in other areas( stock market etc .) instead of the socialistic SS system by having my wages ATTACHED by the government, I would be way better off. I want every damned penny the government stole from me in the last 40 years .
She retired 2 years ago, so she's doing that now while I work. Lucky lady...
My grandmother (b. 1895) got benefits based on my grandfather's work history; she did not work outside the home. My parents (b. 1920), certainly got back more than they paid in; as people in the workforce from 1946 until the late 1970s, they both rode the magic midcentury economic wave quite well.
My husband and I are 51 and have both paid into FICA for about thirty years, as well as funding our own retirement plans. The money we get from Social Security will be a "nice" addition, but it is hardly the core of our plans. If all goes well, we are looking to retire at 60, or at the very latest by 62. Life is too much fun to spend it at the office.
I agree that a "new deal" is needed overall, but you might want to find another term for it, around here. ;)
How old are you, Jonesy? :)
Boomers will not quietly sit by . Most Boomers are in better shape than a lot of 30 year olds( Xers) and we will kick your a$$ or blow it away if need be .
You're going to laugh....I'm 43.
please don't say: "hey you are a boomer!"
"Medicare to Base Fees on Income"
http://www.freerepublic.com/focus/f-news/1698641/posts
Okay..... but I'll probably draw blood from chewing on my tongue.....
While it's true the hippy generation of the late 60's opened the door to much of today's cultural ills, it is this new-age, narcissistic generation that is forming the groundwork for a new battle cry: "don't let anyone over age 65 live". It is your generation of morally depraved, self-absorbed, sexually obsessed, droopy-pantsed, Godless morons who are turning America into a nihilistic cesspool.
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