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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (321567)	1/18/2007 12:51:07 PM
From: RetiredNow	Read Replies (1) \| Respond to of 1573984

Another great article that proves my point that our deficits and debt are simply not sustainable, especially when faced with social security and healthcare debts... Bernanke: Baby boomers threaten economy Fed chief says failure to deal with aging population could hurt economy. January 18 2007: 12:09 PM EST WASHINGTON (Reuters) -- Federal Reserve Chairman Ben Bernanke warned Congress on Thursday that failure to take action soon to deal with the budgetary strains posed by an aging U.S. population could lead to serious economic harm. "Unfortunately, economic growth alone is unlikely to solve the nation's impending fiscal problems," Bernanke told the Senate Budget Committee. senior_retired_golf.03.jpg Costs of programs like Social Security and Medicare are set to soar as baby boomers retire in increasing numbers. RELATED Social Security debate: It's back Reforming the most popular entitlement program is once again on a lot of lips these days. But whether that translates into meaningful action is unclear. (more) Bush aims to balance budget by 2012 President to propose five-year plan to Congress that would balance books, make tax cuts permanent. (more) Bernanke acknowledged that official projections suggest the U.S. budget deficit could stabilize or shrink in the next few years, but cautioned: "We are experiencing what seems likely to be the calm before the storm." Dream retirement: How to achieve it Left unchecked, the costs of so-called entitlement programs, such as Social Security and Medicare, are set to soar as increasing numbers of the baby boom generation retire. "Dealing with the resulting fiscal strains will pose difficult choices for the Congress, the administration, and the American people," Bernanke said. "However, if early and meaningful action is not taken, the U.S. economy could be seriously weakened, with future generations bearing much of the cost," he added. Expert advice on retirement Bernanke cited projections by the Congressional Budget Office that showed spending on entitlement programs would reach about 15 percent of U.S. gross domestic product by 2030, nearly double from today's levels. He said a worrisome implication of such projections would be the much larger national debt and related higher payments to bondholders. "Thus, a vicious cycle may develop in which large deficits lead to rapid growth in debt and interest payments, which in turn adds to subsequent deficits," Bernanke said. Bernanke's full testimony The Fed chief said that whatever decisions were taken to prepare for the budgetary pressures presented by an aging population, tax rates would need to achieve a balance between spending needs and necessary revenues. Bernanke said advocates of lower taxes would have to accept lower spending on entitlement programs. Likewise, proponents of more-expansive government programs must recognize the need for higher taxes brought about by higher spending, he added.