Posted on 03/08/2007 7:28:59 PM PST by FLOutdoorsman
David Walker, Comptroller General at the Government Accountability Office, appeared on the show “60 Minutes” last evening to discuss the federal budget outlook. If you saw the show, you know that he painted a very sobering picture regarding the federal government’s ability to meet its future obligations.
If you didn’t see the show, Mr. Walker’s theme was simple: government entitlement spending is like a runaway freight train headed straight at American taxpayers. He singled out the Medicare prescription drug bill, passed by Congress at the end of 2003, as “probably the most fiscally irresponsible piece of legislation since the 1960s.”
When it comes to Social Security and Medicare, the federal government simply won’t be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers. Our entitlement system can’t be reformed- it’s too late. And the Medicare prescription drug bill is the final nail in the coffin.
The financial impact of the drug bill cannot be overstated. Government projections that the program would cost $400 billion over the next decade were a joke, as everyone in Congress knew even as they voted for the bill. The real cost will be at least $1 trillion in the first decade alone, and much more in following decades as the American population grows older.
The Medicare “trust fund” is already badly in the red, and the only solution will be a dramatic increase in payroll taxes for younger workers. The National Taxpayers Union reports that Medicare will consume nearly 40% of the nation’s GDP after several decades because of the new drug benefit. That’s not 40% of federal revenues, or 40% of federal spending, but rather 40 % of the nation’s entire private sector output!
The politicians who get reelected by passing such incredibly shortsighted legislation will never have to answer to future generations saddled with huge federal deficits. Those generations are the real victims, as they cannot object to the debts being incurred today in their names.
The official national debt figure, now approaching $9 trillion, reflects only what the federal government owes in current debts on money already borrowed. It does not reflect what the federal government has promised to pay millions of Americans in entitlement benefits down the road. Those future obligations put our real debt figure at roughly fifty trillion dollars- a staggering sum that is about as large as the total household net worth of the entire United States. Your share of this fifty trillion amounts to about $175,000.
Don’t believe for a second that we can grow our way out of the problem through a prosperous economy that yields higher future tax revenues. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare alone. The only options for balancing the budget would be cutting total federal spending by about 60%, or doubling federal taxes. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.
The answer to these critical financial realities is simple, but not easy: We must rethink the very role of government in our society. Anything less, any tinkering or “reform,” won’t cut it. A good start would be for Congress to repeal the Medicare prescription drug bill.
There is no way the promised entitlements will stand unmodified in a decade, and Congress knew that when they passed the bill.
U have a little three year old niece this applies too. Shame on Republican politicians for having given away the seed corn.
I have a little three year old niece this applies too. Shame on Republican politicians for having given away the seed corn.
Stinking typos.
Oh, you kid. All my nieces and nephews are grown and have kids of their own.
This is very discouraging.
Chin up old chap.
We need a grass roots style bill that can placed on the ballot to remove 'entitlements' from the governments budgeting, and not allow Congress the chance to vote no on the only issue that will really change the matter. Nothing would ever be permanent, and force them to look at needs based services only, rather than doling out the money to everyone.
As far as prescription drugs go, wouldn't it be cheaper for the Government to buy out the patents once a worthwhile drug is developed and give them away? It's the R&D that costs all the money, not the manufacturing of the product.
Well I am not down about it. More angry at being betrayed by my government as they buy present votes with the country's future.
To paraphrase, let not your heart be troubled, it will last but a short time. Head and chin held high. I am a steely eyed killer of the deep.
Carry On!! :D)
I hope I live to see this happen. I am going to go outside and scream "Free at Last, Free at Last Thank God I'm Free at Last".
I say good for Bush and the devil take the hindmost, even if it does mean the system crashes down around them that promised it and them that wanted it at any cost!
Ron Paul bump. And yet the prescription nonsense was sold to us as 'conservative'. Because it wasn't 'as much' as the Democrats' plan. And there's the new definition of conservative for Republicans. We won't screw you as bad as the Democrats. At least not up front. Some choice....
Works for me.
There is no way that the Medicare prescription benefit is the most irresponsible legislation since the 60s. The massive increase in social security benefits in 1986 pushed thru by George Mitchell clearly takes that prize. Before that happened, social security was projected to remain solvent indefinitely. Now, it will go bust before 2020. And the loss will dwarf anything our federal government has ever lost. It will make the current national debt look like a pittance.
The Democrats cried that the bill wasn't expansive enough. I predict that any reform will end up making it more expensive, not less.
The real solution to the health care crisis is to require people pay for it themselves. You would see medical costs drop dramatically within a period of weeks.
I want to agree with him. But for one minor problem -- the actual data collected on real costs actually are coming in BELOW the estimates, significantly below. Maybe that will change next year, but for now it's costing a lot less to provide the prescription coverage than was predicted.
Ron Paul is right.
Although I'd like to think I can play the game of stash and hedge long enough before the dollar takes its major hit, I have a 6-month old son that I know will have to learn the game by a whole set of different rules.
I just hope those rules aren't what I see today they could become. That would be Hell he would live in.
Therefore, I am looking for an escape for him, or at least the opportunity to teach him how to maximize his options, including where to retreat, survive and prosper.
But in the meantime ... Fair Tax? Abolish the IRS and Federal Reserve?
Frankly I don't see any way out of this since the baby boomers (I'm one sad to say) are the people who vote and they fully intend to strip the country before they pass. If my parents generation was "the greatest generation" for enduring the Depression and fighting a world war then certainly the baby boomers are histories most irresponsible generation.
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