"Blessed are the meek, for they shall inherit the earth"?
Today, it's more like "Blessed are the young, for they shall
inherit the debt."
federal deficit this year will hit a record $422 billion, according
to the latest projections from the Congressional Budget Office.
That's over a billion dollars a day in red ink, more than a billion
a day in federal spending that's over and above the level of federal
the next decade, the CBO is projecting $2.3 trillion in federal
red ink – and that's assuming Congress doesn't pass any of the
additional tax cuts that President Bush has proposed. Make the Bush
administration's previous tax cuts permanent, as sought by the White
House, and the CBO is forecasting a doubling to $4.5 trillion in
the 10-year flow of red ink.
President Bush entered office, the CBO projected a 10-year budget
surplus of $5.6 trillion. We're looking at a 10-year negative switch,
in short, of being in the black to being in the red to the tune
of some $8 trillion to $10 trillion – or even more if the politicians
decide to escalate the level of pork, or if things get worse with
Al-Qaida, or if the foreigners who are funding our deficits lose
faith in the dollar and decide our interest payments should be higher,
or if the politicians settle on the idea that more tax cuts are
required to stimulate the economy.
a longer view to when today's 76 million baby boomers are retired
in large numbers, the annual cash-flow deficit in the Social Security
and Medicare programs is officially projected to reach $783 billion
in 2020 and $4.3 trillion by 2040 (or $519 billion and $1.6 trillion,
respectively, in today's dollars). Improve life expectancy or raise
the projected price of health care and the numbers only get worse.
his new book "Running on Empty," Peter G. Peterson, chairman
of the Council on Foreign Relations, former chairman of the Federal
Reserve Bank in New York, former Secretary of Commerce in the Nixon
administration, and founding president of the Concord Coalition,
points to the burden that today's young Americans and future generations
will inherit just due to the long-term deficits in Social Security
and Medicare and what the federal government has promised to pay
in future benefits: "Just financing the projected increases
in Social Security and Medicare through higher contributions would
require payroll taxes to rise by 50 percent by 2020, and by 200
to 350 percent by 2040, according to the Social Security Administration."
answer from President Bush was to toss spending restraint to the
wind and enact a new prescription drug program, the largest entitlement
expansion since the days of the Great Society, which will add a
projected $535 billion over the next 10 years to the nation's already
unsustainable multi-trillion dollar shortfall in unfunded future
retirement and health care obligations. The retort from the Democrats
is that this new $535 billion "didn't go far enough,"
suggesting that we should dig ourselves even faster and deeper into
a full-blown fiscal crisis.
party, neither Bush nor Kerry, offers any solutions. Both are more
concerned about votes in November than about getting America off
a path that could end in an economic and political meltdown.
Republicans, Peterson writes, "the pursuit of lower taxes has
evolved into a religion, indeed a theology that discards any objective
evidence that violates the faith," while the government, for
Democrats, has become "a massive vending machine which operates
by dispensing new benefits in return for organized political support
and by deferring costs as far as possible into the future."
both sides, asserts Peterson, good sense takes a back seat to ideological
purity: "The high priests and assorted ayatollahs of the Republican
Party have never met a tax they didn't want to cut. The revered
theologians and ragtag mullahs of the Democratic Party have never
met an entitlement program they didn't want to expand."
result is that we end up adding programs, cutting taxes, and sending
off crushing burdens to our kids. For those younger people who'll
be stuck picking up the tab, Gary Lloyd provides a cautionary word
about trusting either side: "When the government's boot is
on your throat, whether it is a left boot or a right boot is of
R. Reiland [send him mail]
Pittsburgh Tribune-Review columnist and the B. Kenneth Simon
Professor of Free Enterprise at Robert Morris University.