| I have bad news for you younger people. In today's San Francisco Chronicle (September 12, 2004) there is a front page article about the government's unfunded liabilities--as much as 70 trillion. In other words, if you calculate the present value of all the government's liabilities, such as future SS and Medicare costs, the total is between 50-70 trillion. In plain language, if you calculate the future payments by the government in today's dollars, they will exceed total tax income by 50-70 trillion. To put this in perspective, the Gross Domestic Product for the U.S. is currently approx. $11 trillion.
Paul O'Neil, Bush's honest Treasury Secretary, appointed a commission to make recommendations to solve the problem of the unfunded liabilities. They made three tax recommendations:
1. More than double the payroll, immediately and forever, from 15.3% to approx. 32%.
2. Raise the income tax by 2/3, immediately and forever.
3. Cut SS and Medicare by 45%, immediately and forever.
If taxes are not raised, the government must eliminate forever all discretionary federal spending except transfer payments. This means no defense, no highways, no national parks, ad nauseum.
So, you younger folks, save your money and invest carefully. In 2008 the baby boomers will begin to retire, and that’s when the fiscal hurricane begins. Meanwhile, while the government faces a financial catastrophe within the next decade or two, the Bush administration focuses on waging war on a few thousand terrorists and defending tax cuts for the rich. For the rich, the government giveth and the government taketh. Around the year 2010, 50 million Social Security recipients are going to demand their right to benefits over your right to drive $50k cars and drink champagne. |