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.
The problem is that the American people are like spoiled children, no one ever wants to tell them they can't have something.
Hang on there... Just because the government will default on SS and Medicare doesn't mean that they're going to stop taxing you for it. No, what they'll do is rename those taxes to something like the Safety Net Repair Tax, triple it, and collect it from you retroactively for the previous 10 years.
Actually, in the not too distant future, I can see a HUGH (so called) "one-time" tax on any private, tax exempt retirement funds set away: I know that it's already been floated around by dem consultants
Unfortunately, I can also see them both inflating the money supply AND devaluing the dollar...
Mark
Thanks for the ping.
Now, this is what liberalism gets you.
I'm not buying liberalism, just because it's shrouded with
an (R).
Sadly, many folks are swallowing that bitter medicine.
It's past time for a real change.
Don't hold your breath. I've come to the conclusion that the vast majority of congress-critters, and politicians in general, are of the same mold as my congress-critter, "the reverend Emmanuel Cleaver."
Basically, he got onto the city council, then multi-term mayor, and finally got to congress. He took graft and corruption as far as he could in KC, so he was forced to expand to Washington.
With very few exceptions, most pols are there to ensure and expand their own power. And repealing any give-away programs won't help them in their quest.
Mark
IMHO, this issue is why the powers that be in DC see a North American Union in our future...and may well be fueling the drive to get there by this kind of spending. They need more bodies in the tax pool to meet their obligations. Consolidation of political power =consolidation of control over all of us.
Exactly.
...and, are they 'smarter than a 6th grader?' Nope.
That's a notable quotable. I probably will use it, too. :)
"to repeal the medicare prescription drug bill...."
fat chance. fat chance at repealing any entitlement bill.
(the barbarians are at the gate and rome doesn't
have the stomache to repel them)
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details and previous articles.
May have to build a henhouse.
Yes, it might be economically more sensible, and is probably worth exploring.
Had I my druthers, I would rather see the stupid drug "benefit" ended. Since the Republicans (who let this nonsense go through while in control of Congress) do not even control Congress at this point, there's no way now that we can end this fiscal nightmare before it becomes far too entrenched to be removed. At least we look at some ways to try and make it less burdensome. Outright buying of relevant patents and releasing them into the public domain might generate some overall savings.
If that happens, anything you own will also be worthless - might as well start living like cavemen.
I don't agree. I've found Gen X and Gen Y to be MORE conservative than their parents. Immigrants aside, that is...
I've railed against the Ponzi scheme we call Social Security for over 30 years and I've paid FICA taxes continuously since 1960. I even hit the cap when I was a captain on flight pay in the 70s. Now, just this month, I got my first Social Security check. I feel like I've gone over to the dark side, but what I need now is for everyone to keep paying and paying and paying those FICA taxes. Thank you very much.
You got that right...they admit as much. I remember when former US Senator and current NJ Governor Jon Corzine was running for his current seat...criticizing the far too modest plan of giving people the option of putting a small portion of their payroll taxes in personal retirement accounts...former Goldman Sachs CEO (and unrepentent socialist) Corzine said "the US government will always be able to meet its obligations because it can print money"
real financial wizard that Corzine is
President George W. Bush traveled April 5 to Parkersburg, West Virginia to visit the so-called Social Security Trust Fund: a filing cabinet filled with paper. "There is no trust fund — just IOUs," backed by no economic assets whatsoever, Bush noted.
Senator Jon Corzine (D., N.J.) called the president's remarks misleading. In a conference call with journalists, Corzine said: "U.S. Treasury securities have the ability to be paid under any circumstances based on the ability of the government to print money." While Corzine's press secretary denies this comment was a concrete proposal, at this writing, the senator proudly highlights this quote on the front page of his website.
Stop the Presses: Jon Corzine would inflate the currency instead of reforming Social Security
Should have made myself clear. I was discussing the boomer generation.
There is no way for them to meet those obligations. My guess is that they will begin radically means-testing Social Security benefits in the upcoming years, which means I won't get any, and neither will most people who have accumulated any real assets. I do not count on receiving a dime from SS. The interesting thing about this is how it affects my sense of loyalty to the USA. We are spending in a manner that makes no sense, running up fabulous credit shams in the name of "expanding," and engaging in empire building/maintenance in the name of "waging a war on terror." I am ready to take my assets, leave, and shoot Uncle Sam the finger on the way out. It really is only a matter of wanting to be able to return to visit family that keeps me from just renouncing my citizenship and leaving now. I never would have thought it would come to this.
I beleive the same thing. Us Americans will be diluted into 3rd-world citizens.
Your generation will be no better. Your only hope is to learn from our mistakes--don't elect politicians who want to use their position to strengthen their own power and prestige, but elect those who want to minimize the role of government. Be wary of the politician who wants to make government "more efficient"--that's a buzzword for bigger and more powerful. Elect people who want to make government fail, because that's the only way that the masses will realize that "government is not the solution--it's the problem."
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