Posted on 10/04/2006 9:05:44 PM PDT by Lunatic Fringe
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.
Government spending on Social Security and Medicare alone will increase from about 7 percent of the total size of the U.S. economy to almost 13 percent by 2030 and to more than 15 percent by 2050, he said.
Bernanke declared: "The fiscal consequences of these trends are large and unavoidable."
The government recorded a budget deficit of $319 billion last year. This year's red ink is projected by the White House to total around $296 billion.
Financially shoring up Social Security and Medicare will involve difficult choices by lawmakers and other policymakers, Bernanke said.
For instance, if the government tried to finance projected entitlement spending entirely by revenue increases, the taxes collected by the federal government would have to rise from about 18 percent of the total size of the economy to about 24 percent in 2030, he said.
In his speech, Bernanke did not discuss the future course of interest rates.
The Federal Reserve meets next on Oct. 24-25, and many economists believe the policymakers will leave rates unchanged for the third meeting in a row.
With the economy slowing, the central bank in early August decided to halt _ for the first time _ a two-year long campaign to boost interest rates to fend off inflation. Policymakers suggested that the cooling economy would eventually lessen inflation pressures.
There's been relief on the inflation front as once-surging energy prices have settled down. Gasoline prices, which had topped $3 a gallon in the summer, have slid and are now averaging $2.31 a gallon nationwide, the Energy Department says.
Its illegal aliens who are straining the country, Mr. "the federal reserve caused the great depression" Bernanke.
boomer ping
Just give me back the money I've paid into the system and leave me the hell alone when I reach 65, Mr. Bernanke.
Thank Democrap Lyndon Johnson for ruining Social Security 30 years after it's ill conception.
Me too. And with some interest too, Mr. Bernanke.
We are Boomers, hear us roar!
Its about time somebody asked the boomers to sacrifice something, anything, for the country. They are the ones who whined that Bush didn't 'ask anything of the country' after 9/11. Well......here it is. Boomers should voluntarily give up their social security and medicare benefits 'for the good of everyone'. Lets see how that one goes over.
... so do it!
blah, blah, blah -- we're not going to do anything about it until it's too late...until a financial crisis forces us to. Next subject?
How many of these politicians are of the boomer generation? They remind me of those people who say, "Don't blame me! I'll be dead by the time "X" happens!" I understand their point. I cannot truly get worked up over the OZONE LAYER and what it will look like in 2050. But on the other hand, I do think what's fair should be fair. I won't hold my breath for any reforms.
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50,000 plus dead boomer names on the Wall in DC not enough for you? I have five kids. Thank God none of them sound like you.
I'd be happy to have Bernanke cut me a check for my past contributions and drop me from the system ... and I'd have gladly taken that deal at any time over my working career.
Well, getting our money back is not an option. But I would settle for the government suspending my FICA payroll deductions.
I've had some very good years where the tax bite was well into six figures (and some very lean early years). Five of my eight siblings can say the same. And until Mom went on medicare nobody in the family ever took a dime from the government. Where did that money go?
Lunatic,
Yes the are. But a handful that are for the most part not hippie boomers with steal backbones have spoken, Congressman Ryan comes to mind with his own SSI proposal as others.
What the media is silent about is the fact that the Democratic party, and their Reps in the House and Senate have proposed NOTHING.
Chairman Bernake's plea hear will not be missed by the financial sector and sets the stage in my opinion for round 2. If not for the Foley Scandal, perhaps this would have been a gift for the GOP in this election cycle, but since the Dinosaur Media still has a fairly good lock on communications, this story will not get noticed much by the Average "John Q' Public".
Prior to 9/11 Tim Russert not friend of us conservatives noted the biggest failure of the Clinton Administration because of the Monica Mess was the fact that Former Pres. Clinton and his Administration did not tackle the SSI dilemma, even with his left of center stance he gets it, and the clock is ticking to fix it before it is to late. The Democratic party with their mentality of not participating in a fix if it is not their idea should be viewed as the horrible tactic, not partisanship which is what they are doing is often mistaken for.
You want to cut massive entitlements? Why don't you cut out welfare. What's that bought us over the years--nothing. Why don't you cut out every penny of foreign aid. If we need the money so badly in this country keep it in this country. Quit paying for rehabilitation of dope addicts. Part of that is Social Security money pissed down the drain.
Admittedly, what I said is a generality but if you look at the prepondance of the population of the boomers, the 50,000 you rightly defend are not part of the demographic currently dominating the impending financial doom the boomers will bring to the US Treasury.
There is virtually no way I can think of that the baby boomer generation can be considered anything BUT the most self-serving, selfish and irresponsible generation we have produced in the last century. On whole, what did they do? For every hero who gave their life in Vietnam or Korea, there were 5 to 10 here in the U.S. rallying with John F'ing Kerry and Jane Fonda against them and American values.
I harbor no ill will for any individual baby boomer I have ever met. And because you are in that demographic as a whole, I do not fault you as it is NOT your fault and I don't doubt that you have no contributed to the havoc they hath wrought on America. But it is not wrong to call a spade a spade. For any problem you can name in American culture, I will quickly provide for you the moorings in the baby boomer ethic. It is your children and mine who will be tasked with repairing the cultural and financial chasms created by the babyboomers. It is not a light matter for them and how they bear the burden I will grant them enormous latitude and forgive them publicly and privately for what they will be forced to impose on the elderly which were the baby boomers of today.
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Oh, you mean like abortion, welfare, SSI itself....all of which were enacted before boomers were old enough to vote. Or maybe you mean the feminist movement, the founders of which are all pre-boomers.
You know little.
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