AB reader Oldvet points us to more Social Security stupidity, this time from Scott Lanman and Craig Torres:
Federal Reserve Chairman Ben S. Bernanke said the U.S. government may face a “fiscal crisis” in the coming decades if it fails to deal with the rising costs of retirement and medical benefits for the aging population … The White House Office of Management and Budget projected in July that the budget deficit would be $339 billion this fiscal year, up from $248 billion last year. The OMB estimated that the deficit would narrow to $188 billion in 2008. Bush entered office in 2001 with a budget surplus of $127 billion.
Ah yes, the unified deficit thing again. As in “what Social Security surplus”? I guess Lanman and Torres will say – we were just reporting on Bernanke’s testimony.
Further down, they note:
Under Congressional Budget Office projections, the ratio of federal debt held by the public to gross domestic product will rise to about 100 percent in 2030 and “grow exponentially after that,” from about 37 percent now, Bernanke said. “Ultimately, this expansion of debt would spark a fiscal crisis, which could be addressed only by very sharp spending cuts or tax increases, or both,” Bernanke said in the testimony.
Hmmm. Total Federal debt is closing in on 70% of GDP already. But public debt is only 37% of GDP. It’s like magic when one can ignore those Trust Fund reserves!
But Chairman Ben is correct about “a fiscal crisis, which could be addressed only by very sharp spending cuts or tax increases”. So Mr. and Mrs. America (OK, that’s Dick Armey’s line) – what should it be? Should you just turn over part of your future Social Security checks as you kids continue to pay high payroll taxes? Or should we raise income tax rates so the very rich have to share some of the future burden?