So many people point their fingers at military spending when it comes to many of the problems associated with our budget. What most do not realize is that over fifty percent of our budget is obligated to pay for the entitlement program costs and it is increasing EVERY YEAR. This is more than defense spending, which is stable for the most part, and is certainly more than is spent on education or infrastructure. WHY? Why are we spending more money every year on the elderly than on the FUTURE of this country. Why are we quibbling about defense spending and money for education when those two combined do not match what we spend on Social Security, Medicare and Medicaid? It doesn't make sense but the older you are, the more likely you are to vote. Can we discuss this for once?
Ben Bernanke, the current Federal Reserve Chair is quoted on January 18th as having recognized this glaring and growing problem:
Federal Reserve Chairman Ben Bernanke testified today that “long-term fiscal imbalances” due to rising spending on entitlement programs such as Medicare and Social Security imperil the economy. “If early and meaningful action is not taken,” he warned Congress, “the U.S. economy could be seriously weakened, with future generations bearing much of the cost.”
When Senate Budget Committee Chairman Kent Conrad (D., N.D.) asked, “How urgent is it that we address these long term imbalances?” Bernanke replied: “The right time to start is about 10 years ago.”
http://economistsview.typepad.com/economistsview/2007/01/bernanke_entitl_1.html
**For more info, visit the Congressional Budget Office**
http://www.cbo.gov/ftpdoc.cfm?index=3521
4 comments:
Well here is the problem I see: I don't really ever hear solutions from either lawmakers or political advocates or pundits. I mean, I consistently hear that this is a major economic problem and that it must be dealt with sooner than later, but who is going to step up with real solutions? And you are right when you say that this has largely been ignored in this election year, which is unfortunate because in a President, we need strong leadership on tough issues.
I am sick of hearing these dodgy answers where a politician will say, "I disagree with raising taxes for younger workers" but then say "the federal government must honor the elderly and give them the benefits they were promised." It can't go both ways! Someone will have to make a sacrifice.
I, for one, don't know how to resolve this issue, but I am all ears when it comes to ideas...
I feel like a comment like this is part of the problem. It is easy to deflect all attention away from this topic by waiting for a solution. No! The best way for a solution to present itself is to bring this problem to the feet of politicians. Add pressure to an election by demanding an address of this topic and a forum for discussion will ensue and hopefully so will a solution. The answer is to TALK about it.
I agree, so let's talk about it. What do you advocate? Let's talk Social Security at first. For me, it seems that the social security tax is almost a regressive tax, where it adversely affects lower-income workers. This system was set up to help those that need it most, and in a lot of ways it hurts them more than it helps. There is currently a $90,000 income ceiling, where any income over $90K cannot be taxed. High-income workers pay less of their total income into the fund. Lower-income people are not saving as much as the middle class or upper class when it comes to 401K's or pensions, and are much more reliant on a government-sponsored retirement pension.
If we privatize the system, lower-income workers will be at the mercy of the stock market, something with which they have little experience. If the stock market went into recession, where would these workers that were approaching retirement age get their funds from? They need a federal government retirement account. I believe that we should modify the system to mirror our income tax sytstem, to make it a progressive tax with an increased income level ceiling. This will not only decrease the burden for lower-income families, but I believe will provide funds to help pour more money into the System to avoid a collapse. I also believe the official retirement age should be increased from 65 to 70 to reflect current life expectancy.
http://www.epi.org/content.cfm/issueguide_socialsecurityfacts
I agree with both of you as well. According to the OMB, (Office of Management and Budget) federal spending is estimated to increase by $1.1 billion. The facts are that people are living longer in the US and in general. For example, life expectancy has increased by 11 years from 68.2 in 1950 to 77.8 in 2004. This is a detriment to our economy but something that we can't argue. They are the one's who gave us life, sustained our economy so far and along with government have given us every opportunity possible.
http://www.whitehouse.gov/omb/
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