What Will Dems Do About This?

Discussion in 'Politics' started by red states rule, Jun 24, 2007.

  1. red states rule

    red states rule Senior Member

    May 30, 2006
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    If Dems were not so busy with pork filled bills, pushing for surrender in Iraq, and the endless political witch hunts - perhaps they would have time to try and solve this issue

    Pres Bush tried and has savaged by the libs and the liberal media

    The Medicare/SS time-bomb


    As President Bush and the Democratic Congress prepare to war over $23 billion in domestic discretionary spending in a 2008 fiscal year budget that will approach $3 trillion, now is a good time to talk about the $90 trillion Social Security and Medicare elephant in the room. It is a virtual certainty that both political parties will ignore it, at least until the next president is inaugurated 19 months from now. Oh, there will be rhetorical heat during the presidential and congressional campaigns. But in terms of substantive, responsible legislation passed by Congress and signed by the president, expect nothing — zilch.

    Between now and January 2009, the $90 trillion elephant, which embodies the present value of the unfunded obligations of Social Security ($15.6 trillion) and Medicare ($74.3 trillion) over the infinite horizon, will undoubtedly grow much larger. Indeed, the present value of the unfunded obligations just for Medicare increased by $3.7 trillion in 2006 alone. Figures expressed in terms of present value represent the amount of money that would have to be set aside today to fund the long-term Social Security and Medicare benefits that politicians from both parties have promised their constituents. These figures are over and above payroll-tax revenues dedicated to Social Security and Medicare and premiums paid by Medicare beneficiaries. Unfunded obligations represent the level of claims on general tax revenues (mostly individual and corporate income taxes) that will be necessary to fund these promises beginning in the not-too-distant future.


    To appreciate the relative size of the $90 trillion in unfunded liabilities for Social Security and Medicare, consider four facts: (1) This year's entire U.S. economic output, measured by its gross domestic product, will be $14 trillion. (2) Today, the total U.S. public debt outstanding (i.e., the "national debt") is $8.8 trillion, which, despite having skyrocketed by $3.1 trillion (54 percent) since Mr. Bush entered office, is still less than 10 percent of the present value of the entitlement nightmare galloping toward us. (3) The total net worth (as of March 31) of all U.S. households and nonprofit organizations, including their stockholdings, corporate and Treasury bondholdings, housing equity, SUVs and high-definition plasma TVs, is $56.2 trillion. (4) The total market capitalization (number of stock shares times the share price) of the S & P 500 (the 500 leading U.S. corporations) was $12.7 trillion as of March 31.


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