- Text smaller
- Text bigger
A few weeks ago, “60 Minutes” did a segment on David Walker, comptroller general of the United States. Walker heads up the Government Accountability Office, or GAO, whose duty it is to act on behalf of taxpayers to assure government accountability. It’s as close as anyone has ever come to a nonpartisan, honest assessment of government operations – especially government spending.
Walker bluntly states that the most serious threat to the U.S. is not some guy hiding in a cave in Afghanistan or Pakistan, but our own fiscal irresponsibility. You know he’s sincere when he says he has given up on elected officials to take responsible action. He truly believes that the very survival of the U.S. is at stake if voters do not demand that their elected officials make some hard choices.
Oversimplified, the catalyst for our fiscal predicament is that eat-drink-and-be-merry group of folks affectionately referred to as “Baby Boomers.” They were born in the period between the end of World War II and the beginning of the Vietnam War, when the “culture of consumption” somehow became synonymous with the American dream.
Those Florida retirement communities you see advertised on television – the ones where retirees are yukking it up, playing golf, enjoying aerobics classes and sipping midday cocktails – are where an awful lot of Baby Boomers fully intend to be in the not-too-distant future. And when their time comes, they not only are not going to want to hear about work, they won’t want to hear about medical bills, either. It’s going to be their turn to be supported by the people at the bottom of the pyramid.
Only one problem: The pyramid is upside down! And it’s going to continue to get wider at the top and narrower at the bottom with each passing year. GAO projections make it clear that just over the Horizon of Fiscal Hell, there won’t be enough wage earners to support the Arnold Palmer golf-community folks anymore.
So, when does the sky begin to fall? In less than a year! The first Baby Boomer will step up to the Government Retirement Trough on Jan. 1, 2008. And, along with 78 million other Baby Boomers just behind him in the Entitlements Line, he’ll be looking for his Social Security and Medicare benefits.
Of course, every halfway informed individual knows that the real culprit is health-care costs. Medicare costs are five times greater than Social Security benefits. So what did President Bush and Congress do to begin whittling away at this draconian problem? They passed a prescription drug bill that added $8 trillion (that’s trillion) to what was already a $15-$20 trillion underfunding of the health-care system! If you or I did something equivalent to this in our own little worlds, we’d be incarcerated without a trial.
Washington insiders agree that most politicians fully understand the mathematics of impending doom, but they aren’t about to admit it to their constituents. The No. 1 objective of politicians is to get re-elected, and they recognize that telling the truth would mean being booted off the Washington gravy train. They are well aware that voters hate truth, and have a preference for tarring and feathering when it comes to truth messengers.
Which is why both liberal and (so-called) conservative politicians just keep kicking the entitlements can down the road, hoping upon hope that the painful truth won’t come home to roost until long after they’re out of office. Every politician you see on C-SPAN proposing a new sleight-of-hand “reform” of the Social Security and Medicare programs is lying – and he knows he’s lying.
One of the really interesting things about a Hillary presidency would be her approach to handling this fiscal entitlements mess. Remember, when the pre-lobotomized Hillary naively believed she was going to be co-president with Bubba, she pressed for a universal health-care program that would have dwarfed the one that is already bankrupting the U.S. If President Hillary were to suddenly rediscover her Stalinist roots and start pressing for a universal health-care program once again, it might just bring things to a head much quicker, which, ironically, could be a good thing.
Nearly 30 years ago, I warned my readers about the inevitable collapse of the vote-driven entitlements system in the United States and proposed a simple solution to the Social Security scam. I said then, and believe even more strongly now, that both Social Security and Medicare must be 100 percent phased out. Better a phase-out than a monumental collapse that would not only cause a great deal of pain, but could very well bring about anarchy – which is always followed by a dictatorship.
I suggested that benefits be slowly phased out over a 50-year period, at a decrease of 2 percent per year. Thus, people just reaching retirement age, who have been paying into and counting on Social Security throughout work career, would receive 100 percent of their originally promised benefits; people eligible the next year would receive only 98 percent of what was promised to them; and so on. In this way, FDR’s wicked brainchild would disappear completely after 50 years, with fewer and fewer people relying on it each year along the way.
Unfortunately, humility forces me to admit that there is zero chance that the powers that be will adopt a solution remotely resembling the one I’ve proposed. On the contrary, you can count on politicians to keep kicking the can down the road.
Which is why, if you are more than 20 years away from retirement age, you’d be wise to assume that when the can rolls to a halt at your feet, there won’t be anyone around to kick it any further. And that’s when you’ll want to have your own nest egg safely hidden away.
This is going to be a slam dunk “I told you so.”
Related special offer: