As 77 million members of the Baby Boom generation begin to retire, America is about to experience one of the most dramatic economic, sociological and demographic changes in its history. The institutions we have relied upon in the past are completely unprepared for what lies ahead.
Politicians, the national news media and the general public have become increasingly aware that our federal entitlement programs are about to be swamped. Social Security, Medicare and Medicaid have made trillions of dollars of explicit and implicit unfunded promises. In fact, by 2030 (about the midpoint of the baby boomers' retirement years), we will have to double every tax rate or cut every benefit in half.
But our problems do not end there. Federal, state and local governments have made $5 trillion in promises (many of which are unfunded) to civil service workers. Corporate America owes about $450 billion in pension promises and $350 billion in post-retirement health care promises that are also unfunded.
To make matters worse, the instruments we have created to help individuals save for their own retirement - principally through 401(k) accounts — are also not working well. In general, people are not saving enough, and they are not prudently investing the funds they do save.
Behind our inadequate institutions are inadequate public policies. For example:
* On balance, the tax law encourages current consumption, but discourages saving for consumption during retirement.
* Even more important, the tax law encourages overconsumption of health care before retirement, but discourages saving for what are likely to be greater health needs later in life.
* The American answer to the European-style welfare state has traditionally been employer-provided benefits. Yet:
* Unwise public policies are encouraging large employers to abandon pension and post-retirement health care promises made to their employees.
* Other policies are preventing employers from helping employees make their own provision for income and health care during the retirement years.
* The policies that are most inadequate for the baby boomers' retirement years are those affecting early retirees. In general:
* People who retire early will find that their opportunities to save are much more restricted than those available to people still in the workforce.
* They will find that health insurance is not only more costly when purchased by individuals, but the insurance (unlike insurance obtained at work) must be purchased with after-tax dollars.
* Once they begin drawing Social Security, they will discover that if they earn additional income, say by working part-time, they will face draconian effective tax rates - taking as much as two-thirds of what they earn.
* And even if they don't work for wages, they will discover that the tax rates on their pension income and IRA withdrawals are much higher than the rates paid by younger taxpayers at the same income level.
2007-10-26 08:28:16 · 10 answers · asked by mission_viejo_california 2 in Politics & Government ➔ Politics
Pretty bleak picture. I guess we'll just have to borrow more money from China.
2007-10-26 08:32:29 · answer #1 · answered by Anonymous · 0⤊ 4⤋
The big thing today is large families. Who will pay for all of them?
It doesn't matter, we take care of our elderly.
There's no reason to stop it 50% of the elderly lived in abject poverty before SS.
Sorry money doesn't do a lot if you don't use it for good.
2015-05-11 22:05:46 · answer #2 · answered by ? 3 · 0⤊ 0⤋
You're right about all of that. The answer is most likely to increase taxes, decrease entitlements, or probably both. If people are tax for the rest of their life rather than just for a period of time, if the richest people in the country were required to pay a disproportionately large percentage of taxes compared to other people (since they've benefited the most in Americas "good times"), and if people who leave behind inheritance of hundreds of millions or even billions of dollars for their children were required to give most of it back to the government in order to pay for these entitlements, then we'll be okay.
2007-10-26 08:35:14 · answer #3 · answered by billy d 5 · 0⤊ 3⤋
I have been saying privatize social security since the 80's, but the problem with politicians is they think if the problem is "down the road" it's not their problem, because they won't be in office then...now we are totally screwed, but the AARP and the Democrats are still pretending there's no problem.
2007-10-26 08:36:21 · answer #4 · answered by Anonymous · 3⤊ 0⤋
Well, may be if those who have children would pay their fair share of the taxes in the first place we would not have this problem. You all know perfectly well that people who produce children don't pay their fair share of the taxes because they have these things running around called TAX EXEMPTIONS.
http://i114.photobucket.com/albums/n268/fuzzynuts_2006/TaxExemptions.jpg
2007-10-27 15:01:11 · answer #5 · answered by Anonymous · 1⤊ 0⤋
I'm sure we'll see more tax hikes for smokers and drinkers.
Oh yea.....gasoline taxes are a favorite too.
2007-10-26 10:27:29 · answer #6 · answered by ahedou2 4 · 1⤊ 0⤋
It's time to abolish Social Security
2007-10-26 08:38:01 · answer #7 · answered by Anonymous · 1⤊ 3⤋
Don't know...this is one of many reasons I would NEVER want to be president
2007-10-26 08:32:17 · answer #8 · answered by Anonymous · 1⤊ 1⤋
our government has no plan, basically social security will be no more.
2007-10-26 08:40:22 · answer #9 · answered by Boston George 3 · 1⤊ 1⤋
simple, the next generations behind them, same as they did for those ahead of them
whats so complicated about that
2007-10-26 08:32:12 · answer #10 · answered by ? 6 · 1⤊ 3⤋