Economic Meltdown...Do you give a DAMN !

David Walker is not a politician. He was hired by Bill Clinton to head the GAO. His official title was: Comptroller General of the United States and head of the GAO. He was the nation's chief accountant. He was not an elected official and was hired for 15 years regardless of which president or political party was in office, which means he was in office during both Bill Clinton and George W. Bush.

Walker has been preaching of impending fiscal doom for some time now. It is his premise that there is not enough money to pay future retirees their full Social Security and Medicare benefits and unless something is done immediately, our country may not survive.

Walker felt so deeply about this subject that he quit his job in march 2008 to join the "Peterson Foundation" where he now spends all his time traveling the country warning Americans of the impending fiscal melt down of our economy. On his staff are Republican, Democratic, and Independent economists. His message is about as non-partisan as it can get.

I trust his judgment because David Walker has no political agenda. He has nothing to gain by lying to the American public. He is not running for an office and according to him, doesn't intend to. He claims to be an Independent and as such, says what needs to be said and doesn't care if it offends either party.

Of all the experts I have seen in high government positions, I believe that Walker is one of the few people who is not limited by the party to which he belongs. He cares more about the problem, and its solution, than any elected official can. The solutions he proposes go against the core beliefs of both political party bases.

Yes...I am proud to be a Democrat, but I am not a follower and will go against the party line, if need be, when I believe the party is wrong on any issue. On this issue, I do believe that the Democratic party is to damn stubborn to see that they can not solve this problem alone and, as revolting as it may be, they need the Republican party.

Look at it this way...For 50 years both Republicans and Democrats have squandered excess SS money that should have been invested for retirees future, but instead they had to borrow this money to fulfill election promises, not giving a damn about what that meant to future generations.

GAO on Social Security:
There is No Trust Fund, Only IOU's

Here's another way to think about the problem. Social Security is a commitment by the government to make payments to people in the future. The Trust Fund exists, supposedly, to secure that commitment by setting money aside today — so that in the future, the money doesn't have to come from taxes, borrowing, or spending cuts. Fine — in principle. But when that money is invested in Treasury bonds, those bonds themselves will have to redeemed in the future, and the money to do that will have to come from taxes, borrowing, or spending cuts.

And guess where that money is coming from. Instead of investing our money into things that can be immediately converted back into cash when needed, they left us IOUs and promises that it would be paid back. Well guess what...payment is coming due and there is no cash, just IOUs. Seniors can not eat IOUs. IOUs can not provide medical care. The actual money to redeem these IOUs will have to come from somewhere, and guess where that is: higher taxes AND reduced benefits.

The last line above shows exactly where the problem is. I can not see a Democratic platform demanding "reduced benefits" or a Republican platform demanding "higher taxes". Unfortunately, the solution to this problem will require both. That is why politicians on both sides of the aisle refuse to take this issue head on. Politicians know that their party alone can not solve this problem and that the ultimate solution will require them to embrace ideas from the other party. Therefore they ignore it and the problem continues to grow and be passed along to the next generation.

Social Security and Medicare Boards of Trustees
Status of the Social Security and Medicare Programs
A SUMMARY OF THE 2008 ANNUAL REPORTS

General

The financial condition of the Social Security and Medicare programs remains problematic. Projected long run program costs are not sustainable under current financing arrangements. Social Security's current annual surpluses of tax income over expenditures will begin to decline in 2011 and then turn into rapidly growing deficits as the baby boom generation retires. Medicare's financial status is even worse.

Medicare

The Medicare Report shows that the program could be brought into actuarial balance over the next 75 years by an immediate 122 percent increase in the payroll tax (from 2.9 percent to 6.44 percent), or an immediate 51 percent reduction in program outlays or some combination of the two. As with Social Security, adjustments of greater magnitude would be necessary if changes are delayed or phased in gradually. Larger changes would also be required to make the program solvent on a sustainable basis beyond the 75-year horizon.

Social Security

Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 14 percent in payroll tax revenues (from 12.4 percent to 14.1 percent) or an immediate reduction in benefits of 12 percent or some combination of the two. Ensuring that the system is solvent on a sustainable basis beyond the next 75 years would require larger changes,

Conclusion The financial difficulties facing Social Security and Medicare pose enormous challenges. The sooner these challenges are addressed, the more varied and less disruptive their solutions can be. We urge the public to engage in informed discussion and policymakers to think creatively about the changing needs and preferences of working and retired Americans. A national conversation and timely political action are essential to ensure that Social Security and Medicare continue to play a critical role in the lives of all Americans.

There are no future generations to pass this problem on too. We must begin to solve this problem now or our entire economy will collapse within the next 30-40 years. Politicians have kicked this economic can down the road for 50 years leaving it to someone else to solve. Well, the road has run out and there is no where else to kick this can to. Barack must start the process and make the hard choices that will eventually save America.

GAO on
The Nation’s Long-Term Fiscal Outlook
April 2007 Update
Federal Fiscal Policy Remains Unsustainable

At some point, action will be taken to change the Nation’s fiscal course. The longer action to deal with the Nation’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing. Acting sooner rather than later will give us more time to phase in gradual changes, while providing more time for those likely to be most affected to make compensatory changes.

This gap is too large for us to grow our way out of the problem. It would require decades of double-digit real economic growth, but the U.S. has not had a single year of double-digit real economic growth since World War II. To be sure, additional economic growth would certainly help the Nation’s financial condition and our ability to address our fiscal gap, but it will not eliminate the need for action.

Hell...I'm 60, why should I give a damn about a problem that probably won't affect me or my chances of getting benefits? The odds are I'll be dead in 30 years. The answer to that is obvious. Every time I look at my children, and especially at my grandchildren, I wonder what their futures will be like? Will they even have a future? Will they have the opportunities that I've had or will they live in a third world country where the majority of the population lives in poverty. Where pain and suffering are the norm? I see this as a possibility, unless things change. To me, these questions are bigger than both the Democratic and Republican parties and their one-upmanship partisan politics.

So what do we do ?? Increase taxes through the roof? Cut the military back to nothing ?? Cut the benefits of ALL social programs even more?? Increase spending from the general fund even more ?? Borrow even more money from China and other countries ?? The answer to most of these questions is probably..YES !!! BUT there is not a politician in this country, with hopes of being elected to public office, with the guts to tell us this.

Neither party alone has been able to fix this problem because of partisan politics and have more or less ignored it, because their party can not provide a total solution. Therefore, IMHO, logic suggests, that alone, they never will. This problem was caused by both political parties. For either party to blame the other is a stupid waste of time and accomplishes nothing. It will require elected officials on both sides of the aisle to hold their collective noses, work together, and make hard decisions that no one likes, but are necessary. The longer they wait, the less likely it is that this problem will ever be solved and the more likely it is that our nation may not survive.

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As always, Here is a link to my main diary on the subject