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.
Start buying gold now if you think that will happen.
Sage advice, I wish more people had the English Lit teacher I had in HS who pretty much said the same thing and spent most of the year having us study, in exquisite detail, Atlas Shrugged.
He was a rare gem.
Yep. The "Greatest Generation", whose ravenous pig-squealing appetite for entitlements has led us to this mess. But somehow it's the Baby Boomers' fault? Gimme a break.
* 81 percent said getting rich is was their most important or second most important life goal;
* 51 percent said the same about being famous;
Ref: http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=54193
You might say that it's the Boomers' influence that caused this. If so, might the Boomers blame their failures on those of the Greatest and Silent Generations for raising them improperly?
It's nice to have someone to blame, but history shows that prosperous societies eventually become soft, decadent, and complacent, and that's their downfall. It's human nature, and that's where we're heading.
You may be right but it is really hard to swallow the fact that I'm funding thier retirement with the money that was supposed to fund mine. Not only that but I have no choice in the matter. The gvt. steals the money from my paycheck each and every week I work.
Different levels of corruption, but at least when you pay em off, they stay paid.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
I won't reach retirement age for about 20 more years and I think by then it will be means tested at best. Retirement age will also be raised. Since I already have a military pension and IRA accounts, I've written off Social Security a long time ago. And I'll bet you a lot of others my age think the same way as I do.
I appreciate that, but it doesn't make me feel any better, it adds to the frustration. Oh how often do I wish for the ability to opt out of SS. That would be AWESOME!
A wise man would have his retirement money solely in cash. No way the IRA's will be free from the tax man in 20 years.
If we survive the crash we will return to the philosophy that you must be strong and self-sufficient to survive, the foundation that built the Greatest Generation, and that's a good thing. But it ain't gonna be fun. Steel yourself.
bookmark
Damn Ron Paul and David Walker for speaking the truth! That is NOT allowed in Washington D.C. these days!
actually, many of us might find ourselves living in conservative communes....living off the land and sharing our resources and responsibilities.....I wouldn't mind it if I could live with people of similar morals and values.
this is similar to what's happening to my Catholic diocese here in Spokane Wa area.. re: priest sexual abuse of youngsters.....
we had NO say in what went on, we are told that the parishes belong to the parishioners...hah...yet we are now told that the parishes will have to fork over a year's worth of collections each to pay for this debacle.....
fat chance that this household will.....
just like the govt...we have no say in the taxes...we have no say no what they do with our money...yet they come back to us for more of it when they screw up.....
and some of the best conservatives are female....
besides the fact that many women make more money than their spouses and many women own their own homes......
but in general I would agree that home or property ownership would make someone's vote a little more realistis and practical....
I feel this way because we can all complain about SS and Medicare but the real deal buster will be these lavish govt benefits at all levels ....education, police, military, city, county, state, federal.....
there will be two types of retired..those with the guarenteed govt pensions and medical retirement benefits and those without either....
why should the same taxpayers who footed the bill for govt pensions also be the same ones suffering when there is no money for SS?
there will be means testing and it will affect anyone getting the defined pension plans bought and paid for by US taxpayers ....it has to be....
And so you get a return of 0% on that money? In fact, after inflation, it's a loss for you if you think about buying power.
How about we call it what it is - a massive fraud perpetrated on the American people by a criminal government - and abolish it?
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