Gonna Kick Tomorrow, Entitlement Edition

Hey look, Ben Bernanke is stating the long-obvious about federal entitlements and fiscal horror!

The U.S. population will change significantly in coming decades with the combined effect of the decline in fertility rates following the baby boom and increasing longevity. As our population ages, the ratio of working-age Americans to older Americans will fall, which could hold back the long-run prospects for living standards in our country. The aging of the population also will have a major impact on the federal budget, most dramatically on the Social Security and Medicare programs, particularly if the cost of health care continues to rise at its historical rate. Thus, we must begin now to prepare for this coming demographic transition.

The economist Herb Stein once famously said, "If something cannot go on forever, it will stop." That adage certainly applies to our nation's fiscal situation. Inevitably, addressing the fiscal challenges posed by an aging population will require a willingness to make difficult choices. The arithmetic is, unfortunately, quite clear. To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off–until the day they cannot be put off any more. But unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth.

Wow, sounds like we better tackle that crisis head-on! Or not:

Today the economy continues to operate well below its potential, which implies that a sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable. However, nothing prevents us from beginning now to develop a credible plan for meeting our long-run fiscal challenges. Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term.

A credible plan that demonstrates commitment. That is really how debased and gutless our officialdom has become. Though coming from a guy who describes mortgage foreclosures as a "market failure," this should come as no surprise. The political class of this country remains in total denial.

Reason on Helicopter Ben here.

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  • Steve Nash Equilibrium||

    Anyone doubt that Maobama will sell VAT as the only option to solve the problem?

  • Mike M.||

    Nope, it's already been decided by the so-called elites that it's happening. It's only a question of when, and my guess is probably right after the November election.

  • West Texas Boy||

    This. They are going to shit on the carpet on the way out the door, just watch.

  • West Texas Boy||

    The next part of the equation being that then in the next election cycle they can point to "reduced" deficits being in place just before the evil red team came in and started tearing everything down.

  • ||

    Giant Lizard of the Year

    Maybe we should have a meeting to discuss the feasibility of forming a committee to plan a path to addressing this whole "credible plan" idea. [Blue Ribbons optional]

  • CaptainSmartass||

    Whoa whoa whoa, slow down there, let's not rush this thing. I propose drafting a plan to formulate the possibility of assembling a steering committee to work on your proposed meeting before we get too far into it.

  • ||

    This is a roadmap to sustainability. Prepare to draft a plan.

  • hurly buehrle||

    Wow, all that bashing my head against the wall just now really gave me a headache.

    This is the money quote: Today the economy continues to operate well below its potential, which implies that a sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable.

    Surely a massive reduction in government spending would spell nothing but doom for the nation's economy. Thank goodness august economic minds like this control our country's money supply.

  • ||

    Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term.

    This would be what, the 53rd "long-run fiscal sustainability" plan since 1970?

    Yeah, that'll fix everything.

  • ||

    Hey now, don't be so cynical. That's fewer than the number of governments that Italy has had since then.

  • CaptainSmartass||

    Yes, let's continue to judge our nation's success by the metric set by Italy. What could possibly go wrong?

  • ||

    As long as we can get long, lazy summer lunches in the piazza, I'm all good with it.

  • fish||

    Its just sad...the mental contortions that some guys (Bernanke) will put themselves through to keep drawing a government check.

    Have just a bit of self respect and resign.

  • ||

    But...but...he's the Man of the Year! Time said so! Without him single-handedly saving our economy, we'd all be eating shoe leather and cardboard!

  • ed||

    The political class of this country remains in total denial.

    Some of them do, certainly. But I think those at the top recognize that time is running out, and the window of opportunity for their long-cherished social agenda is closing. They are getting while the getting is good, and damn the consequences.

  • Geoff||

    Agree whole heartedly.

  • ||

    A bunch of chicken-littles you are, David Brooks says everything will turn out fine:

    http://www.nytimes.com/2010/04/06/opinion/06brooks.html

  • The Wine Commonsewer (TWC)||

    Interesting and perhaps Brooks is right. Unfortunately the demographers have always been wrong so there is no reason to believe their forecasts today.

  • CaptainSmartass||

    He didn't mention anything about the domes that will encase cities and not one word about flying cars. So what does he know about The Future®?

  • ||

    I didn't RTFA. Did he talk about how it's OK for old people to be on the Science Diet?

  • Art-P.O.G.||

    It almost looks like Brooks pulled that whole thing out of his ass. He could be right, though, I suppose. Predictin' the future is, as you all have said, a crapshoot.

  • Kolohe||

    I really didn't need to see David Brooks's face with the words 'luscious orgy' next to it.

  • Art-P.O.G.||

    Ha ha, with the pink shirt, too!

  • ||

    To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.

    Gosh, I wonder which option our masters will choose?

  • Slut Bunwalla||

    The snark-o-meter is reading higher than I've ever seen before, keptin!

  • ||

    doom
    DoooM
    DOOOOM

  • The Wine Commonsewer (TWC)||

    The problems are very real but the one demographic Bernake overlooked is that my kid's generation is a bit larger than the baby boomers.

    Going into the 1990's the demographics actually looked worse than they do now.

    We can stick it to these 60 million kids, good and hard.

    They'll support us boomers long into dementia in the way that we would have liked to become accustomed to except that we kept on re-financing the house to pay off the credit cards and the Beemers.....

  • West Coaster||

    Good to see a post from you, TWC. They've been few-and-far-between lately.

  • Stereo Apple||

    We can stick it to these 60 million kids, good and hard.

    They'll support us boomers long into dementia in the way that we would have liked to become accustomed to except that we kept on re-financing the house to pay off the credit cards and the Beemers.....

    As a 26 year old, let me just go ahead and say, "fuck your entire stupid generation of entitled cocksmokers."

  • Jordan||

    Easy now. I'm pretty sure he was joking.

  • The Wine Commonsewer (TWC)||

    Right, Jordan, you would think that would be obvious to the lad, wouldn't you? Ahh, but sometimes I can be a bit obscure. Didn't think so this time, though.

  • The Wine Commonsewer (TWC)||

    Thanks West Coaster. I haven't been around here much lately, tis true.

  • The Wine Commonsewer (TWC)||

    Ha! I've never bought a pack of White Owls in my life.

    But hold on, Baby Boomers didn't give you the Great Society, Socialist Security, or Socialized Medicine. The Greatest Generation and their parents did that are the dummies that did that by electing LBJ and FDR. So while the boomers deserve scorn....wait for it.....

    We Didn't Start The Fire!

  • ||

    Great. Now I have Bowie's Cat People stuck in my head.

  • ed||

    Baby Boomers didn't give you the Great Society, Socialist Security, or Socialized Medicine. The Greatest Generation and their parents did that

    Indeed, TWC. To validate your thesis, I submit this "joke," forwarded to me a couple minutes ago by my elderly father, as passed along through his "greatest generation" Republican buddies:

    George Bush, Queen Elizabeth, and Vladimir Putin all die and go to hell. While there, they spy a red phone and ask what the phone is for. The devil tells them it is for calling back to Earth. Putin asks to call Russia and talks for 5 minutes. When he is finished the devil informs him that the cost is one million dollars, so Putin writes him a check. Next, Queen Elizabeth calls England and talks for 30 minutes. When she is finished the devil informs her that the cost is 6 million dollars, so she writes him a check. Finally George Bush gets his turn, and he talks for 4 hours. When he is finished the devil informs him that the cost is $5.00. When Putin hears this he goes ballistic and asks the devil why Bush's call to the USA was so cheap!! The devil smiles and replies: "Since Obama took over, the country has gone to hell, so it's a local call."

    Sigh.

  • Art-P.O.G.||

    Really, really, really good points.

  • Art-P.O.G.||

    Can we also somehow blame the people who voted for Woodrow Wilson?

  • Citizen Nothing||

    Don't blame me. I haven't voted for a winner in 30 years. True story.

  • ||

    You've got me by a couple years, but same here.

  • The Wine Commonsewer (TWC)||

    Well, you got me beat.

  • ed||

    I blame Plato. Dana Plato.

  • Slut Bunwalla||

    The first sentence all by itself is kind of a nice little mini-joke.

  • The Wine Commonsewer (TWC)||

    Yes, it is a local call. Dam shame, too, because Muddy Waters Long Distance Call is much better. :-)

  • ed||

    Har har. The 26-year-old scolds the "entitled."

  • Colonel_Angus||

    The 26 year old, having something forcefully taken from his paycheck to pay for something that he will not see anywhere near a full return of the benefits of? Or, the 26 year old who will be paying for the coming housing bailout round two for the boomers in a mortgage over their heads, with very little retirement investment?

  • The Wine Commonsewer (TWC)||

    Col, we're all paying and the last guy to get a decent ROI of his social security tax was my grandfather.

    Let me go out on a limb here and predict that social security will become a welfare program for indigent old people within 15 years.

  • The Wine Commonsewer (TWC)||

    No, the 26 year old doesn't know whose on his side and who isn't.

  • ||

    Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term.

    All the serious people agree; there is no chance of inflation in the foreseeable future.

  • ||

    a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term.

    WTF is he talking about? How could rates get any lower than they are now?

  • West Texas Boy||

    Political competence these days is not about actually solving problems, it's about leg strength between elections.

    As in, how far can you kick that damn can down the road until we have to look at it again, and if we make it bigger could you still kick it? Wow, what a great leader he is!

  • Matt Welch||

    I will be stealing that line, thanks.

  • ||

    Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term.

    Because nothing says fiscal sustainability like untrammeled growth of government spending. I hear Bernake is a shoe-in for the First Annual Montgomery Burns Award for Outstanding Achievement in the Field of Excellence

  • that guy||

    I'd rather give the award to the inanimate carbon rod.

  • Kolohe||

    'They're saying "Boo-rnake"'

  • kc||

    "could lead to lower interest rates..."
    I'm no economist, but how much lower can/should interest rates they go?

  • ||

    Caption contest:

    "If, by 'person' you mean 'steaming pile of dog shit'."

  • ||

    "Today the economy continues to operate well below its potential, which implies that a sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable."

    Translation:
    'Yeah, I'll quit. I mean it! But how about just one more hit? That can't hurt anything.'

  • Colonel_Angus||

    "Today the economy continues to operate well below its potential, which implies that a sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable."

    Translation: Let's just wait until we can take more money from the economy. What the fuck.

  • ||

    When the government is taking more than half your income something has gone wrong. http://www.kentculver.com/blog/?p=143

  • Colonel_Angus||

    When the government is taking more than like 10%... if it must even be taxed at all.

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