Oct 04 2006
To all Democrats who said Social Security was not facing a crisis…
Bernanke: Baby Boomers Will Strain U.S.
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.
Can you say DUH!!!?
Also here.
And coincidentally I find this:
Democrats Reviving Social Security Issue
Social Security has drifted out of the national debate, but Democrats, eyeing the senior vote, are trying to revive the issue - just in time for the midterm elections.
Democratic leaders are advising their party’s congressional candidates to focus on what the Republicans might do to Social Security given the chance.
I despise the hint of demagoguing, but lets drop that for a moment.
Regardless of who wants to get an pre-election octane boost out of this, something needs to be addressed about Social Security.
To democrats and republicans alike: Get off your lazy partisan asses and do something.
And that’s all I have to say about that. For now.
One Response to “To all Democrats who said Social Security was not facing a crisis…”
OK…
I’m not a Democrat, and I have often made the same arguments you make. This time I’ll argue the other position.
Social Security is not facing a crisis. A crisis is immediate, short lived, and acute.
What Social Security is facing is potentially a lot worse: A long-term shortfall But that is based on a certain set of presuppositions. George Will has opined along these lines a number of times. We have a steady state analysis that predicts a breaking point some time down the road. Of all the factors involved, growth of the GDP is the most amenable to change. And if you bump the growth of the GDP just a little - if you assume as little as a steady 4% per annum over 20 years - the problem goes away. Even a steady 3.5% is a big improvement.
Supply side economics…
Now it’s reasonable to call those #’s pie in the sky. Globalism is gutting the wage base that has to pay for all of this, but an economy where real growth in wages is brisk will eat up this shortfall very quickly and an economy with steady growth will make any shortfall easier for the overall economy to bear.
So the question becomes how to accomplish this. Three good starting points:
Shut down the illegal aliens who are rotting the economy from the bottom up. Not only are they depressing wages, but all too many aren’t paying the social security tax legal workers would pay.
Abandon free for all globalism, which only benefits speculators, traders, and multinational corporations while it screws the Nation as a whole, involving us in a race to the bottom competing with Nations for whom the bottom is a way of life.
Develop an energy policy that invests in alternatives. The next wave in energy infrastructure is waiting to be defined: Left to their own, energy companies will not invest until current models are unprofitable. That’s a good way to enhance corporate profits but a better way to screw America. Building the future will vastly expand the economy.