Monday, July 30, 2007

Elephant in the Room That Politicians Are Dodging

If you haven't noticed, the major presidential candidates—Republican and Democratic—are dodging one of the thorniest problems they'd face if elected: the huge budget costs of aging baby boomers.

Consider the outlook. From 2005 to 2030, the 65-and-over population will nearly double to 71 million; its share of the population will rise to 20 percent from 12 percent. Social Security, Medicare and Medicaid—programs that serve older people—already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office. The result: a political impasse.

The 2030 projections are daunting. To keep federal spending stable as a share of the economy would mean eliminating all defense spending and most other domestic programs (for research, homeland security, the environment, etc.). To balance the budget with existing programs at their present economic shares would require, depending on assumptions, tax increases of 30 percent to 50 percent—or budget deficits could quadruple. A final possibility: cut retirement benefits by increasing eligibility ages, being less generous to wealthier retirees or trimming all payments.

Little wonder politicians stay silent.

~Robert Samuelson in Newsweek, "When Silence Isn't Golden."

8 Comments:

At 7/30/2007 10:04 AM, Anonymous Walt G. said...

Silly old people. Why should they expect what the previous generations had? The unsustainable lavish expectations of the baby-boomers will obviously have to come to an end in their retirement years. The simple solution to the problem is to create a new United States with younger citizens and have them economically compete with the older United States’ citizens. The older citizens will quickly die off from fending off the youngsters’ vitality and defending against their ruthless business tactics; the demographic problem will be solved by Darwinism. It might be cruel, but it could be effective. We should probably test this theory on a small scale before it is tried nationally, so let’s start with the UAW/GM negotiations for a new labor contract this September. If it works there . . . .

 
At 7/30/2007 10:39 AM, Blogger juandos said...

Well now its been painfully apparent for a few decades that FDR's socialistic Ponzi Scam was going to bite us collectively in the wallet, why whine about it now?

What were these older citizens doing when they were younger and NOT questioning the validity of all the Constitutionally questionable socialist programs being foisted off onto the the taxpayers?

What part of the US Constitution or its amendments mandated federal intervention in retirement, schooling, medical field, environment and so on and so forth?

Remember OASDI ?

What the heck was that all about?

 
At 7/30/2007 11:57 AM, Anonymous Anonymous said...

This is more like the retiring cash cow in the room.

The Boomer generation has contributed more to Social Security than any other generation because of their numbers, their productivity, and the ever increasing share of their incomes taken by Social Security. That cash flow stops when they retire and worse, reverses.

Politicians bought off a lot of people with Boomer money. They would just as soon see their ex caash cow as hamburger.

That said, I wouldn't bet against the Boomers. The ones I know are far tougher and more resilient than most people will credit. It's a mistake to believe your own propaganda.

 
At 7/30/2007 12:23 PM, Anonymous Walt G. said...

It would be hard to win an election by being on the wrong side of 71 million potential voters. People in this age group have a historically high turn-out rate at the polls.

 
At 7/30/2007 2:16 PM, Anonymous bob wright said...

Executives at Enron went to jail for stealing people's retirement money.

Funny how you don't see any Senate or House Committee Chairmen calling for hearings into their own malfeasance.

Where is John Dingell when you need him?

 
At 8/01/2007 11:03 AM, Blogger juandos said...

Good comment about the 71 million voters walt g. yet that's for all its practicality as far as it goes for politicos but that doesn't do anything for anyone else even in the short term...

The federally financed socialist safety net has to go... We can't afford it and haven't been able to afford it ever since LBJ & Congress foisted off the, "war on poverty" onto the taxpayers...

 
At 8/02/2007 11:34 AM, Blogger beeman said...

Social Security will have to come to an end. If you look at the average life expectancy when SS was implemented, many people would never live long enough to collect. Now with average life expectancy in the late 70s for men and early 80s for women, SS has become a way of life. Thus the expectation and the feeling of entitlement to retire SS has come to represent.

 
At 8/02/2007 11:54 AM, Anonymous Walt G. said...

“Social Security will have to come to an end.”

That’s impossible, and very few things are actually impossible. Any person who could end Social Security would have to have immense political power (such as the President). Anybody who ended Social Security would no longer have political power. Since the United States political system all but guarantees that a Democrat or Republican will be President, which political party would ever adopt an end to Social Security in their party platform? Social Security may be altered; however, it will never be eliminated.

 

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