Learn from the fall of Rome, US warned

[Pale Rider]

Learn from the fall of Rome, US warned

By Jeremy Grant in Washington
Published: August 14 2007 00:06 | Last updated: August 14 2007 00:06

The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon, the country’s top government inspector has warned.

David Walker, comptroller general of the US, issued the unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”.

These include “dramatic” tax rises, slashed government services and the large-scale dumping by foreign governments of holdings of US debt.

Drawing parallels with the end of the Roman empire, Mr Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government”.

“Sound familiar?” Mr Walker said. “In my view, it’s time to learn from history and take steps to ensure the American Republic is the first to stand the test of time.”

Mr Walker’s views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress.

While most of its studies are commissioned by legislators, about 10 per cent – such as the one containing his latest warnings – are initiated by the comptroller general himself.

In an interview with the Financial Times, Mr Walker said he had mentioned some of the issues before but now wanted to “turn up the volume”. Some of them were too sensitive for others in government to “have their name associated with”.

“I’m trying to sound an alarm and issue a wake-up call,” he said. “As comptroller general I’ve got an ability to look longer-range and take on issues that others may be hesitant, and in many cases may not be in a position, to take on.

“One of the concerns is obviously we are a great country but we face major sustainability challenges that we are not taking seriously enough,” said Mr Walker, who was appointed during the Clinton administration to the post, which carries a 15-year term.

The fiscal imbalance meant the US was “on a path toward an explosion of debt”.

“With the looming retirement of baby boomers, spiralling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks,” said Mr Walker, a former senior executive at PwC auditing firm.

Current US policy on education, energy, the environment, immigration and Iraq also was on an “unsustainable path”.

“Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernise everything from highways and airports to water and sewage systems. The recent bridge collapse in Minneapolis was a sobering wake-up call.”

Mr Walker said he would offer to brief the would-be presidential candidates next spring.

“They need to make fiscal responsibility and inter-generational equity one of their top priorities. If they do, I think we have a chance to turn this around but if they don’t, I think the risk of a serious crisis rises considerably”.

http://www.ft.com/cms/s/80fa0a2c-49e...0779fd2ac.html

[red states rule]

When Silence Isn't Golden

By Robert J. Samuelson
Newsweek
Aug. 6, 2007 issue - If you haven't noticed, the major presidential candidates—Republican and Democratic—are dodging one of the thorniest problems they'd face if elected: the huge budget costs of aging baby boomers. In last week's CNN/YouTube debate, New Mexico Gov. Bill Richardson cleverly deflected the issue. "The best solution," he said, "is a bipartisan effort to fix it." Brilliant. There's already a bipartisan consensus: do nothing. No one plugs cutting retirement benefits or raising taxes, the obvious choices.

End of story? Not exactly. There's also a less-noticed cause for the neglect. Washington's vaunted think tanks—citadels for public intellectuals both liberal and conservative—have tiptoed around the problem. Ideally, think tanks expand the public conversation by saying things too controversial for politicians to say on their own. Here, they've abdicated that role.

The aging of America is not just a population change or, as a budget problem, an accounting exercise. It involves a profound transformation of the nature of government: commitments to the older population are slowly overwhelming other public goals; the national government is becoming mainly an income-transfer mechanism from younger workers to older retirees.

Consider the outlook. From 2005 to 2030, the 65-and-over population will nearly double to 71 million; its share of the population will rise to 20 percent from 12 percent. Social Security, Medicare and Medicaid—programs that serve older people—already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office. The result: a political impasse.

The 2030 projections are daunting. To keep federal spending stable as a share of the economy would mean eliminating all defense spending and most other domestic programs (for research, homeland security, the environment, etc.). To balance the budget with existing programs at their present economic shares would require, depending on assumptions, tax increases of 30 percent to 50 percent—or budget deficits could quadruple. A final possibility: cut retirement benefits by increasing eligibility ages, being less generous to wealthier retirees or trimming all payments.

Little wonder politicians stay silent. But think tanks ought to be thrilled, because these changes pose basic questions about government. What should it do? For whom? Why? How big can it grow without weakening the economy? Does that matter? Is social justice more important than economic growth? Do gains in life expectancy and the well-being of the elderly justify significant changes in Social Security and Medicare?
http://www.msnbc.msn.com/id/20010728...week/?from=rss

[avatar4321]

no one is non-partisan. Everyone has an opinion and people who dont arent worth listening to.

Immigration looked to be the only point that he was accurate about. We do need to return to a balance budget, but i dont see how he can be telling us we need to increase government spending on social programs such as medicare and expect to be fiscally responsible.

We have more to worry about with the failing of morality in individuals than any one policy the federal government takes. The strength of America is found in the strength and morality of its families and not with the federal government.

If we are failing and lose the Republic we hold so dear, it will be because we turned away from the principles of freedom and looked to the government to solve our problems rather than our own hearts and actions.

[red states rule]

no one is non-partisan. Everyone has an opinion and people who dont arent worth listening to.

Immigration looked to be the only point that he was accurate about. We do need to return to a balance budget, but i dont see how he can be telling us we need to increase government spending on social programs such as medicare and expect to be fiscally responsible.

We have more to worry about with the failing of morality in individuals than any one policy the federal government takes. The strength of America is found in the strength and morality of its families and not with the federal government.

If we are failing and lose the Republic we hold so dear, it will be because we turned away from the principles of freedom and looked to the government to solve our problems rather than our own hearts and actions.

Witht he current entitlement mentality, it will be next to impossible to make the needed fixes. I will never understand why I need to fiance someone elses retirement and health care - and visa versa

The amonut of money needed to pay for SS, Medicare, and Medicade is going to cripple the US taxpayer

[avatar4321]

Witht he current entitlement mentality, it will be next to impossible to make the needed fixes. I will never understand why I need to fiance someone elses retirement and health care - and visa versa

The amonut of money needed to pay for SS, Medicare, and Medicade is going to cripple the US taxpayer

the real question is why do we need the federal government to pay for it when we can be charitable without it. and cant be with it.

[red states rule]

the real question is why do we need the federal government to pay for it when we can be charitable without it. and cant be with it.

As I said, it is the entitlement mentality. I have watched the Dems debate, and when the take questions from those in attendence, it is mostly "what are you doing to do for me"

It goes back to FDR and LBJ. Dems want people to look to the government to take care of them - while someone else pays the bill

[Pale Rider]

This country has problems. Of that there is no doubt. There is no one issue that can/will sink this country. It's many. The illegal tidal wave and invasion from our southern border alone is enough to financially cripple this country if they are given access to social security. Then we have the large-scale dumping by foreign governments of holdings of US debt that hangs over our heads. That alone could cripple this countries economy. And that's not to mention medicare and medicaid, and our aggressive overseas military commitments that are now projected to run into the TRILLIONS!

I don't know what we're thinking. This country simply can not sustain it's economy on this path with washington spending money like a bunch of drunken sailors. Washington can't watch washington. It's putting the fox in charge of guarding the hen house. If this country falters, it will be the fault of washington.

[red states rule]

This country has problems. Of that there is no doubt. There is no one issue that can/will sink this country. It's many. The illegal tidal wave and invasion from our southern border alone is enough to financially cripple this country if they are given access to social security. Then we have the large-scale dumping by foreign governments of holdings of US debt that hangs over our heads. That alone could cripple this countries economy. And that's not to mention medicare and medicaid, and our aggressive overseas military commitments that are now projected to run into the TRILLIONS!

I don't know what we're thinking. This country simply can not sustain it's economy on this path with washington spending money like a bunch of drunken sailors. Washington can't watch washington. It's putting the fox in charge of guarding the hen house. If this country falters, it will be the fault of washington.

The tax money needed to fund SS, Medicare, and Medicade will drive workers into the poor house. The programs must be reformed and polticans on both sides, lack the guts to stand up and fix the problem

[Pale Rider]

The tax money needed to fund SS, Medicare, and Medicade will drive workers into the poor house. The programs must be reformed and polticans on both sides, lack the guts to stand up and fix the problem

The politicians will spend this country into the toilet, and then stand around and point fingers at each other, which will be correct. They will ALL be to BLAME.

We're headed for bad times. There's no doubt about it. We better bend over and pull the head out fast, or this country will fail.

[red states rule]

The politicians will spend this country into the toilet, and then stand around and point fingers at each other, which will be correct. They will ALL be to BLAME.

We're headed for bad times. There's no doubt about it. We better bend over and pull the head out fast, or this country will fail.

The day of reckoning is about 20 years away. The day the government will not be able to pay the SS and Medicare bills

Someone has to step up and start the reforms. I am not holding my breath however

[Pale Rider]

The day of reckoning is about 20 years away. The day the government will not be able to pay the SS and Medicare bills

Someone has to step up and start the reforms. I am not holding my breath however

By the time this country goes broke, it'll be too late. This country will erupt in civil war.

Liberals, faggots, apologists, appeasers, spineless, flag burners, drug dealers, criminals, illegal aliens, the rosie o'fatassdykes and sean penn chavez ass kissers and the like... look the fuck out. YOU are going to be in the cross hairs.

[gabosaurus]

One of the country's big problems is the old dudes driving the ice cream trucks through the school yards of northern Nevada during the afternoon.

[red states rule]

The politicians will spend this country into the toilet, and then stand around and point fingers at each other, which will be correct. They will ALL be to BLAME.

We're headed for bad times. There's no doubt about it. We better bend over and pull the head out fast, or this country will fail.

This is one of the best articles giving the numbers on what is needed to fix the problem

Please make sure you are sitting down when you read this

The Medicare fiscal time-bomb

The present value of the unfunded obligations for Medicare over the next 75 years totals $33.9 trillion, according to the 2007 Medicare trustees' report. Over the infinite horizon, Medicare's present-value unfunded obligation totals $74.3 trillion. These totals represent the difference between projected benefits, on the one hand, and the sum of the 2.9 percent payroll tax for Medicare Part A (hospital insurance) and the premium payments by beneficiaries in Medicare Part B (outpatient services) and Part D (prescription drugs), on the other. In order to meet current-law Medicare commitments, $33.9 trillion (over 75 years) and $74.3 trillion (over the infinite horizon) represent the present values of the financing that must come from one of four sources (or a combination): (1) general tax revenues; (2) increased borrowings; (3) lower government spending elsewhere; (4) Medicare reforms that reduce the unfunded obligations.

In his June 21, 2007, statement before the Senate Budget Committee, CBO Director Peter Orszag delivered the bottom line: "[T]he rate at which health care costs grow relative to income is the most important determination of the long-term fiscal balance." Indeed, if the rise in health-care costs could miraculously be instantly limited to the rise in nominal per capita income, the CBO projected in December 2005 that the Medicare-Medicaid share of GDP would increase to only about 7 percent of GDP in 2050 (compared to 4.2 percent in 2005).

Mr. Orszag has outlined the changes in tax policy that would be needed if revenues from individual and corporate income taxes were used to bridge the fiscal gap caused by health-care costs rising by 1 percentage point and 2.5 points faster than per capita GDP in the long run. In the 1-percentage-point scenario, "individual income tax rates would have to rise by at least 70 percent to finance the increase in spending" on Medicare and Medicaid. The middle-income tax rate of 25 percent would rise to 43 percent; and the top individual and corporate rates would both increase from 35 percent to 60 percent.

In the 2.5-percentage-point scenario, Mr. Orszag estimated the lowest tax bracket would increase from 10 percent today to 26 percent; the 25-percent bracket would jump to 66 percent; and the top individual and corporate tax rates would soar from 35 percent today to 92 percent. As he noted, such tax rates "would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion."

http://washingtontimes.com/article/2...1013/editorial

[JohnDoe]

This country has problems. Of that there is no doubt. There is no one issue that can/will sink this country. It's many. The illegal tidal wave and invasion from our southern border alone is enough to financially cripple this country if they are given access to social security. Then we have the large-scale dumping by foreign governments of holdings of US debt that hangs over our heads. That alone could cripple this countries economy. And that's not to mention medicare and medicaid, and our aggressive overseas military commitments that are now projected to run into the TRILLIONS!

I don't know what we're thinking. This country simply can not sustain it's economy on this path with washington spending money like a bunch of drunken sailors. Washington can't watch washington. It's putting the fox in charge of guarding the hen house. If this country falters, it will be the fault of washington.

I guess it is time for me to tell you how sorry I am that we got in to that spitting match the other day infront of everyone...

And on this thread, I do totally agree with this post's assessment! I could not have said it better! jd

[red states rule]

I guess it is time for me to tell you how sorry I am that we got in to that spitting match the other day infront of everyone...

And on this thread, I do totally agree with this post's assessment! I could not have said it better! jd

Meanwhile Dems are doing nothing to solve the issues they promised they would

They are more interested in "getting" Pres Bush on something - anything to try and make their kook base happy