Wednesday, January 09, 2008

Promises They Can't Keep

Robert Samuelson, writing in today's Washington Post, has an outstanding article examining the presidential candidates' promises relative to our financial realities.

Here's the short version: we're out of money. Everything Hillary or Barack or Mike or Mitt adds as a promise will be paid for by our children. It's all borrowed and most of us will not live to pay it back. We're stealing from our kids so we can live high on the hog. Mr. Samuelson has some of the details:

Social Security, Medicare and Medicaid -- three programs that go overwhelmingly to older Americans -- already represent more than 40 percent of federal spending. A new report from the Congressional Budget Office projects that these programs could easily grow to about 70 percent of the budget by 2030. Without implausibly large deficits, the only way to preserve most other government programs would be huge tax increases (about 40 percent from today's levels). Avoiding the tax increases would require draconian cuts in other programs (about 60 percent). Workers and young families, not retirees, would bear the brunt of either higher taxes or degraded public services...

The insidious nature of this problem is that because the spending increases for the elderly occur gradually, the pressures on taxes and other government programs will also intensify gradually. A crucial moment to clarify the stakes and compel politicians to make choices probably won't occur until it's too late.

The longer we delay -- and we've done so now for several decades, because the strains created by an aging society have been obvious that long -- the more likely that eventual "solutions" will be unfair to both young and old. To acknowledge that and to come to grips with it would constitute genuine "change."
The only candidate who is addressing this directly is Fred Thompson.


Apian Apostle said...

I think your mostly right, but as this link to the Congressional Budget office ( out Social security is not the crisis that it is made up to be, they can solve that by postponing the retirement age for a few years, effectively extending the productive years of our workforce.

The biggest problem is medicare and medicade. People are living longer, a lot longer than they expected when they designed those programs, and it's all due to our health care system. Unfortunately health care costs a lot, as reflected in the medicare/medicade numbers.

Our kids are going to be paying for our debt, there is no question, but they are also going to be living longer, healthier lives (baring massive diabetes outbreak from being to FAT) , having more productive lives because of us...

That being said, It is our job, as responsible parents and current caretakers of our society, to avoid being greedy. We need to leave as much as we can on the table for our kids to enjoy, fiscal discipline is a good idea.

B-Daddy said...

I disagree that Social Security is not a big problem as well.
As the Baby Boomers age and vote themselves viagra in ever larger numbers, there won't be any votes to do anything about the retirement age until it's too late. P.J. O'Rourke has some great analysis of this issue at The Weekly Standard.

Apian Apostle said...

b-daddy the link was great, I love the humor, and it even supports my point... once all of the boomers have their social security benefits you just watch the age at which the rest of us can get ours start to creep up. I've got not doubt that Social security will not fail, but it will be the sweetest for the boomers. And that viagra stuff sounds great, it must be wonderful to be a baby boomer with a four hour erection... call the paramedics!