USA TODAY: The looming national benefit crisis

[BlueEyedSon]

The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that start to come due in four years when baby boomers begin to retire. (Related graphic: U.S. economy threatened by aging of America)

The "Greatest Generation" and its baby-boom children have promised themselves benefits unprecedented in size and scope. Many leading economists say that even the world's most prosperous economy cannot fulfill these promises without a crushing increase in taxes — and perhaps not even then.

Neither President Bush nor John Kerry is addressing the issue in detail as they campaign for the White House.

A USA TODAY analysis found that the nation's hidden debt — Americans' obligation today as taxpayers — is more than five times the $9.5 trillion they owe on mortgages, car loans, credit cards and other personal debt.

This hidden debt equals $473,456 per household, dwarfing the $84,454 each household owes in personal debt.

http://www.usatoday.com/news/nation/2004-10-03-debt-cover_x.htm

[KlatooBNikto]

1. This is precisely what happened to our corporations as they went

from profit making entities to ones saddled with huge debts on their balance sheets as a result of being passed from hand to hand during the 1980's leveraged buyout crazes.Aided and abetted by con men like Michael Milken and Ivan Boesky it was possible for anyone to buy up perfectly good profit making corporations with a lot of equity.In the process a lot of investment bankers got rich.

In a similar way, a perfectly liquid American Governement was stripped of its equity by con men like Arthur Laffer and his disciples of the Supply Side Economics and saddled with huge debts.The brief intermission of Clinton slowed that process only to be revived with a vengeance by Bush.

Just as corporations now have debt service as a major cost item, the same debt service is now a major item in our budeget and threatens to explode into astronomic numbers very soon. That is when both our corporations and our Governement will sink to the level of Argentina.

Only one good thing may come out of it.When that happens, we won't be able to afford wars and, hopefully, sanity will return to our public discourse.

[Robert Oak]

2. concord coalition, nonpartisan budget deficit of both platforms

http://www.concordcoalition.org/federal_budget/041007issuebrief.pdf

http://forum.noslaves.com/index.php?act=ST&f=17&t=285
My little comments.



It's fairly scathing in general, but I think Kerry shaves up slightly
better, but not much...

it's really good for general knowledge and Bush clearly gets a big fat "F" on the deal.

Kerry is kind of walking in with a D-, but he has a shot at working
hard on the course and improving his grade.

[German-Lefty]

3. Drastic things to do to solve this problem:

* Cut 3.7% of wasted GDP, by getting rid of the military. Seriously there's half a trillion a year getting blown out right there. Sure we couldn't play world police anymore, but that might just be a good thing.

* Pact with the 3rd world. If you look at the world's population on average we don't have the problem of to many retirees. We should be investing money in the 3rd world, making their lives better now. When we need the money we'll just trade in our capital there.

* Send retirees to the 3rd world for care. Instead of trying to import cheap labor, just send retirees there. Pick a nice place in the tropics with cheap labor and go there. Of course it might be a good idea to make sure that nice Caribbean island is stable, healthy, and has low crime.

* Work longer. You shouldn't spend 40 years in retirement. A longer life expectancy, ought to lead to a longer career.

Some of these ideas might not seem popular. The old may feel they've been treated unfairly. Well it's their fault for voting right wing, for being partisan, for not planning for the future. For those that didn't save up some money, who went into debt buying crap they didn't need; it's your fault.

I'll probably be sitting in some other country, watching the shit hit the fan. I will feel bad for seniors in the US, especially the one's whose fault it wasn't. I might even send donations, right after we fix 3rd world hunger, make sure everyone on this planet has clean drinking water, immunize all the children, and generally secure human dignity for other billions on the planet. Hope you take care of most of that before you retire!

Was that too harsh?

[jwirr]

4. You should talk to bushie

he has a reality problem to.

[RawMaterials]

5. what about the 80 million echo boomer's 1977-1995

when they grow up, work pay taxes and SS this would help support the baby boomer's. there really isn't that big of a problem. get rid of hmo's and all of the middle management that goes with it. this will remove allot of unnecessary salary's. nationalize health care. then change the retirement age to 75.

right now people are freaking out because generation x was so small, but in the long run it will be fine. just give this generation time to grow up.

I'm more worried about are debt levels being at 6% of GDP then anything else.

[Mike03]

6. Book Recommendation

This is a fascinating but frightening subject that nobody wants to discuss. I'm reading a great book about this right now called "Fiscal and Generational Imbalances: New Budget Measures for New Budget Priorities" by Jagadeesh Gokhale and Kent Smetters, published by the American Enterprise Institute for Public Research.

The Michael Milken institute has also been covering this topic to some extent in their quarterly publication.

One thing that amazes me is that in the UK business press this is well known--economists here understand this as well--but it's not something that is discussed here nearly as much as it ought to be. This is one reason I don't think it's at all hard to believe that foreign subsidies of the U.S. market could subside--what is their motivation to continue to fund what is the world's largest debtor nation? I don't get it. Maybe it has something to do with trade relations and the cost of imports/exports.