Bernanke: Fiscal action needed as America ages <!-- END HEADLINE --> <!-- BEGIN STORY BODY --> By Mark Felsenthal1 hour, 58 minutes ago Federal Reserve Chairman Ben Bernanke warned the U.S. Congress on Thursday that failure to take action soon to deal with the budgetary strains posed by an aging U.S. population could lead to serious economic harm. "Unfortunately, economic growth alone is unlikely to solve the nation's impending fiscal problems," Bernanke told the Senate Budget Committee. Bernanke acknowledged that official projections suggest the U.S. budget deficit could stabilize or shrink in the next few years, but cautioned: "We are experiencing what seems likely to be the calm before the storm." Left unchecked, the costs of so-called entitlement programs, such as Social Security and Medicare, are set to soar as increasing numbers of the baby boom generation retire. "Dealing with the resulting fiscal strains will pose difficult choices for the Congress, the administration, and the American people," Bernanke said. "However, if early and meaningful action is not taken, the U.S. economy could be seriously weakened, with future generations bearing much of the cost," he added. Bernanke cited projections by the Congressional Budget Office that showed spending on entitlement program would reach about 15 percent of U.S. gross domestic product by 2030. He said a worrisome implication of such projections would be the much larger national debt and related higher payments to bondholders. "Thus, a vicious cycle may develop in which large deficits lead to rapid growth in debt and interest payments, which in turn adds to subsequent deficits," Bernanke said. (This means we take on debt to pay budgetery deficits and interest on our deb or debt to pay debt payments. That is a viscious cycle that will lead to collapse & hyper inflation and flushing the toilet on the economy!) The Fed chief said that whatever decisions were taken to prepare for the budgetary pressures presented by an aging population, tax rates would need to achieve a balance between spending needs and necessary revenues. Bernanke said advocates of lower taxes would have to accept lower spending on entitlement programs. Likewise, proponents of more-expansive government programs must recognize the need for higher taxes brought about by higher spending, he added. FAT CHANCE SAYS CLYDE
We haven't even provided for the basic needs of the rising influx of immigrants yet....Surely they need free housing and med care.They vote just fine without college educations....( so forget scholarships)
Somehow it seems like entitlements are bad and everyone seems to forget that a few years ago we prepared for this very known crisis. They raised the social security taxes to put money away in the 7 fat years in order to pay for the 7 lean years. Then they cut the general taxes, paid for a $trillon war with borrowed money and put the "social security surplus" into the general fund and spent it. Burnake is right, we can't afford the taxes to pay the money owed for social security and medicare and to pay the money owed for interest and the other costs of the national debt. We spent the money put away for the future social security payments on huge tax cuts and an expensive war and all kinds of $200 billon planes that don't work or are no better than the ones they replace. I find it interesting that the vast majority of the national debt was borrowed during the reigns of our "conservative" presidents, Nixon, Reagen, and the two Bushes and their fiscal conservative policies. Thank God they weren't tax and spend liberals or our debt would be really high.
O man... I think they are just without the 'liberal' tag. Our debt is record setting high, .gov is larger than ever, and the budget is at an all time high by 2X So what is a tax and spend liberal again? Rush would have us believe it was Clinton. I think it is here and now. Bush is not a Conservative.
It was known for decades that when the "Baby Boomers" started to retire that our "house of cards" would shake and possibly come tumbling down... (this didn't even include the complicating factors of all the geopolitical and natural disasters that are simmering around the world).... not just promised, but unfunded payments, benefits and services... but also their massive effect on the stock market as many exit to utilize their retirement savings to fund retirement... snowball effect that many have been predicting... some dreading.... and really smart ones... preparing for.... Remember though that its those same "Baby Boomers" that put this in place and kept it in place.... the early wave with reap the benefits.... folks like me and few.... errrr... generations of others... will get zip.... Nothing new though... same thing happened with all the Defined Benefit Plans in Corporate America... senior and executive management kept it or revived it and then retired to reap benefits... even though many of the plans were poorly funded and those same corporations would have to pump massive amounts of future earnings in to pay for the retirees benefits.... current employees have fewer benefits and no more promises of defined benefits upon retirement.... Same selfish greed ... unfortunately.... nothing will be left to pay out and the current and future generations will not enjoy the "good times" that some of the "Baby Boomers" engineered, nurtured, guarded and are now enjoying.... at our expense.... JMHO.... nope... I've seen it first hand....
“We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” Daniel Webster 1833
John Maynard Keynes, The Economic Consequences of the Peace, 1920, page 240 "If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer."
Treasury Secretary Woodin, 3/7/33 "Where would we be if we had I.O.U.'s scrip and certificates floating all around the country?" Instead he decided to "issue currency against the sound assets of the banks. [As opposed to issuing currency against gold.] The Federal Reserve Act lets us print all we'll need. And it won't frighten the people. It won't look like stage money. It'll be money that looks like real money." [Emphasis added.] (Source: 'Closed for the Holiday: The Bank Holiday of 1933', p20 - Federal Reserve Bank of Boston)
John Kenneth Galbraith [FONT="] “The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.” Money: Whence it came, where it went - 1975, p15[/FONT]
Friedrich A. Hayek (1899-1992) Austrian Economist, Author and 1974 Nobel Prize-Winner for Economics “With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
Andrew Jackson: To delegation of bankers discussing the Bank Renewal Bill, 1832 "You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."
Sir Josiah Stamp, former President, Bank of England "Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back."
Irving Fisher, 100% Money "Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess."
