If the generation that protected this nation during World War II is indeed the "greatest" generation - and I would agree - then we baby boomers who followed may well be the generation that broke the bank. Or that's what Federal Reserve Chairman Ben Bernanke implies. And when he speaks, we'd darned well better listen.
The Fed Chairman said that unless Social Security and Medicare are revamped substantially, we face some financial issues far, far beyond our abilities. Bernanke is not talking about a hundred years down the road. He says that in 20 years, we'll face a Social Security and Medicare expense that - in my words - will literally break the bank.
In the not so distant future (remember 20 years), there will be an additional 78 million baby boomers retiring. That means fat Social Security checks and virtually unlimited taxpayer-funded health care. That means instead of taking 7 percent of the total economy to sustain these programs, it will nearly double to 13 percent. That would mean a $700 billion cut in spending for other government programs excluding entitlements. In other words, like it or not, we're going to face a huge tax increase as one of the options. Since the federal government loathes cutting programs, a tax hike is more than likely.
Sure, we have other options. Cut money from countless federal programs, live with a massively higher federal deficit or raise taxes. But wait just a minute - Bernanke also said one way to help pay for this explosion in Medicare and Social Security would be to "lower spending on entitlement programs."
That final statement should serve as a source of discussion in the halls of Congress for the next few years. Sure, we can increase taxes and remove those now-famous loopholes that allow far too many people to avoid paying their fair share. But currently folks, more than half of this nation pays no taxes in the first place. So increasing taxes will put the burden squarely on those who are already shouldering a disproportionate share of the burden. If we need a $700 billion cut, do you start with the defense budget? Do you cut military spending when the North Koreans are testing nuclear devices that can reach our shores? When the Mideast remains unstable?
No, you look at the amount of money you spend on those who will not make the effort to become productive in society. You quit paying for medical services that are designed for unrealistic purposes or bogus reasons. You quit saying that a check will come your way automatically with no accountability on the part of the recipient.
And by taking these actions, we can pay for the higher costs that are just down the road.