By Dennis Cauchon and John Waggoner
USA TODAY – 10/4/2004
The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that start to come due in four years when baby boomers begin to retire.
The $53 trillion is what federal, state and local governments need immediately – stashed away, earning interest, beyond the $3 trillion in taxes collected last year – to repay debts and honor future benefits promised under Medicare, Social Security and government pensions.
“As a nation, we may have already made promises to coming generations of retirees that we will be unable to fulfill,” Federal Reserve Chairman Alan Greenspan told the House Budget Committee last month.
“Economists agree this cannot go on,” says Joseph Stiglitz, President Clinton’s chief economic adviser from 1995 to 1997. “We can borrow and borrow, but eventually there will be a day of reckoning.”
Economist James Galbraith of the University of Texas in Austin is a rare optimist in this debate. “I’m not at all concerned about Medicare or Social Security,” Galbraith says. “Unless the government goes broke, Medicare isn’t going to go broke, and the U.S. government isn’t going to go broke because it can print money.”
Galbraith says the country can handle higher tax rates, as Europeans do, and can save money by cutting spending elsewhere, such as on defense, and by implementing a Canadian-style health care system that uses private doctors and hospitals but has the government set prices and pay the bills.
“We are an enormously rich country,” he says. “Providing health care and a modest living for our elderly is certainly something we can afford.”
http://www.usatoday.com/news/nation/2004-10-03-debt-cover_x.htm
Comment: It’s about priorities. Nothing more, nothing less.