Friday, February 27, 2004

Oh, the outrage...

Alan Greenspan testified on Wednesday before the Committee on the Budget of the House. He addressed the fiscal health of the nation, pointing out what seems to be obvious, but what most of our politicians do not want to address. Greenspan expressed concern over the rising budget deficits, particularly in the face of the looming crises in social security (SS) and medicare when the baby boomers begin to retire (only 4 years away, incidentally). As possible solutions, he proposed extending the current tax cuts to continue economic growth, also noting that it is easy to start government programs and nearly impossible to shrink or end them. He then goes on to say that corrective measures will be needed in social programs. Whereas much of the press seemed to immediately quote Greenspan as advocating a reduction in SS benefits, they might have done a better read of the transcript. Greenspan is actually proposing to stabilize the ratio of retirement-to-working. Because people continue to live (but not work) longer, the expenses of SS continually rise relative to revenue of working years. This is in addition to the problem of a rather large generation coming through the ranks.

Unless we are going to restructure the SS system (for instance creating personal accounts), this seems like a reasonable idea. Yet Greenspan was immediately rebuked across the board, most notably by Bush, Kerry, and Edwards (it reminds me of when Dean mentioned raising the retirement age - a similar result). Edwards stated that "it is an outrage for him to suggest that we should extend George Bush's tax cuts on unearned wealth while cutting Social Security benefits that working people earn." I would counter that it is an outrage that none of our representatives seems to have the will or the foresight to begin addressing problems that may devastate this country economically. They all rebuke Greenspan's ideas, and yet none of them has offered a plan to fix the budget deficit and these looming fiscal disasters.

The only disappointment I had in Greenspan's testimony was the scant mention of defense spending. This is an enormous chunk of our GDP. The fact that it is so much greater than any other nation suggests to me that our priorities are not well placed. Instead of talking about limiting retirement benefits or other social programs, why is there rarely mention of limiting the bloated Pentagon budget?

Clearly, difficult choices need to be made. Is anybody out there willing to make them?

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