Haven't you all wondered what the consequences are that we face with all this deficit spending and tax cuts? You all knew that there would be one didn't you? The Bush Administration had at least two targets for this strategy. The first one was to "starve the beast". By running up deficits and cutting taxes, attempts to balance the budget will be handicapped by payments on principle and interest. Paying for Social Security now competes with other entitlements and would require tax increases, something that will be increasingly difficult to do as the economy slows down the wages continue to be stagnant.
The other part of the plot was to effectively destroy Medicare and eventually Social Security. All that energy to save Social Security was in crisis was in fact a deception to turn attention away from the real basket case, Medicare. Cuts in payments for Medicare are making doctors refuse to take it. Medicare is not expected to survive much longer in it's current form. Also, pensions both private and public under funded. There will be no taxes available to bail these out for long. In the end, the baby boomers will be on there own. Our leaders have stabbed us in the back by ignoring the truth too long to allow us to head off a problem.
Business Week
The other part of the plot was to effectively destroy Medicare and eventually Social Security. All that energy to save Social Security was in crisis was in fact a deception to turn attention away from the real basket case, Medicare. Cuts in payments for Medicare are making doctors refuse to take it. Medicare is not expected to survive much longer in it's current form. Also, pensions both private and public under funded. There will be no taxes available to bail these out for long. In the end, the baby boomers will be on there own. Our leaders have stabbed us in the back by ignoring the truth too long to allow us to head off a problem.
Business Week
Many baby boomers are facing retirement without adequate savings of their own. Together with Medicare trust funds that will be exhausted and inadequately funded corporate and government pensions, you have the makings of a potential crisis.
The problem for financial markets is twofold: First, the underfunding in corporate and other pension funds will cause individual firms great hardship, making those with high legacy costs uncompetitive. Second, the underfunding at the state and federal government levels will cause tax hikes, which will alter regional and international competitiveness. We currently estimate that U.S. corporate pensions are underfunded by about $140 billion. Add the cost of other postemployment benefits and the deficit doubles. State pensions are underfunded by $284 billion.
Disturbing as those numbers are, the federal underfunding situation dwarfs the state and private ones. Social Security has a $4.6 trillion shortfall (based on present discounted value of the next 75 years), and the federal civilian and military employee programs are underfunded by $4.5 trillion.
The underlying problem is demographics. The postwar baby boom was a phenomenon throughout the industrial world, and those babies born in the late 1940s and 1950s are approaching retirement. The leading edge of the baby boom is now turning 60, and we can expect the ratio of retirees to workers to rise. Those who are now paying into pensions will start collecting benefits, and there isn't enough money in the pot to pay the pensions promised. MORE
1 comment:
I too was a victim of a corrupt U.S. bankruptcy court system and a corrupt bankruptcy attorney who "laid down" and sold out his client.(Bankruptcy attorneys have no economic interest in a client that does not offer the prospect of additional fees beyond the current case. Their allegience is with other bankruptcy attorneys and/or adversary law firms with whom they believe they must maintain a collegial relationship,rather than incur their rath in future years).I was misled in filing Chapter 11 with assets of $40 million and liabilities of $25 million. The secured lender searched and found
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