GAO Chief Warns Economic Disaster Looms

It would first be helpful to dissolve the "culture of career politics" which leads many of our representatives (and the President) to focus on short-term patches -- which give them something to crow about during election season to preserve their jobs -- rather than long-term visions.

We've already seen how little foresight our government has in Iraq, and this isn't even to mention the problems ahead for the economy. "Looming fionancial disaster?" *sweeps under rug* "I didn't see that!"

Really, it's time for change this November. And by change, I mean real change. We need to start concentrating on electing candidates who are more concerned for America's future than their own special interests -- something this country unfortunately hasn't seen in many, many years.

well said Vanadium.

Let me add something:

Calculations by Boston University economist Lawrence Kotlikoff indicate that closing those gaps — $8 trillion for Social Security, many times that for Medicare — and paying off the existing deficit would require either an immediate doubling of personal and corporate income taxes, a two-thirds cut in Social Security and Medicare benefits, or some combination of the two.

Macroeconomic meltdown is probably preventable, says Anjan Thakor, a professor of finance at Washington University in St. Louis. But to keep it at bay, he said, the government is essentially going to have to renegotiate some of the promises it has made to its citizens, probably by some combination of tax increases and benefit cuts.

For those trumpeting for more social programs (and increased funding for those existing), read the above paragraphs very carefully. Universal healthcare would be the death knell to our economic system. UH sounds so nice in theory for many people -- after all, it's essentially "free" healthcare courtesy of your tax dollars (and everyone else's) -- but the economic implications have been all but ignored by far too many people. And what about the overhead costs for trusting this huge responsibility to a government that's already dug itself a massive hole financially?

Of course, if you prefer the Swedish model of exhorbitantly high taxes (40%+) and make enough money, this isn't a problem for you although your paycheck will be considerably less than it is now. But consider the families that make just above the limit to be disqualified from many of these social programs, and the implications these increased taxes have on their paycheck and quality of life. Will they even have food left on their table after increasing the taxes that much higher?

And, perhaps even more importantly, what if the economy collapses? What then? You're still going to trust the Fed -- which plowed the economy into the ground -- to manage your most vital needs?

True economic cost, while an incredibly boring subject, is far too ignored when it comes to political discussions amongst everyday folks. It's long overdue for people to start engaging in this side of the discussion before championing any new programs -- this article clearly demonstrates why.

I agree it's a great piece especially for the AP. If we stopped the corporate welfare and made required fair tax on oil company profits etc, coupled with some sane spending laws like line item budgeting we'd reduce the problems instantly. It's not the public needs we can't afford it's the private/corporate bail outs and cost plus plundering plus the debt to the FED that's killing us.

Unfortunately, Pamela, while such measures would help, entitlement and defense spending are also contributing to fiscal instability. Entitlements, in particular, are the largest portion of the federal budget and their share of the budget has steadily grown for decades.

The critical flaw in SS and Medicare is that they can be used by anyone over a particular age, and there is no means testing. As lifespans increase, the cost of these programs increase. Our own material progress is undermining these programs.

There are no easy solutions to this problem.

ComSen: I seem to remember at the last State of the Union, President Bush criticising that Congress failed to pass a bill that reformed threatened to gut Social Security like a trout and replace it with a private investment scheme that could lose value and would only truly benefit large business and the Democrats applauding that.

Fixed it for you.

Getting back to Vanadium's point, though... the problem is that socialized healthcare would be an unmitigated fiscal disaster where we are now. Clearing up the problems of the debt will require that some services be cut to the bone, some of them amputated. (Note: This is a very bad analogy because, unlike most amputees, when the government recovers its fiscal health enough to use those old services, they can be grafted back on.)

Of the question about how to do this, there can be only one answer. There are two choices: a moderate-sized reduction of all services for a long period of time (the "lifestyle change"), or a severe reduction of all services for a relatively short period of time ("triage"). Factor in that the change needed to reduce the debt will also stun the economy, and the slow long-term change becomes the only viable solution; the fast short-term solution could kill the economy while trying to fix the debt.

And then there are the problem of the entitled, the ones who muscle their way up to the trough first and swill down most of the contents down before the other 299,999,000 piggies can get their turn. As some would probably joke, "If filling my pockets with other peoples' cash is wrong, then I don't wanna be right!"

Upshot: socialized medicine, while a nice and generous idea, will probably have to wait.