Wednesday, March 24, 2010

Bankrupting our posterity ~ By John Stossel

We're in big trouble folks... Or, should I say our children and grandchildren and future generations are going to be in a real bad situation? John Stossel explains the huge challenges and the lack of good solutions. We can't tax our way out, we can't borrow our way out, and we can't just print money without high inflation. So, now what?
Our forefathers would be appalled. After the American Revolution, when the new government was debating how to pay its bills, George Washington said this about a national debt: "We should avoid ungenerously throwing upon posterity ... the burden we ourselves ought to bear." Well, we sure are dumping my generation's debt onto posterity. I wish we had more politicians like George Washington.

By John Stossel

Posted: March 24, 2010 ~ 1:00 am Eastern

© 2010

Bernie Madoff took money from people who thought he'd invested it, gave some to others who thought it was a partial return on their earlier investments and kept much for himself. That's called a Ponzi scheme, and his $50 billion fraud was called the biggest ever. But it wasn't the biggest. Social Security and Medicare are much bigger ones.

These are trillion-dollar scams. Medicare has a $36 trillion unfunded liability. Social Security's is $8 trillion. There's no money to keep those promises.

But Congress isn't investigating this scam. Congress runs it. That FICA money you thought government had saved for your retirement is gone. There's nothing left but IOUs backed by nothing. Your money was spent not only on current retirees but on wars, welfare, corporate bailouts, earmarks and all the other stuff Congress wants. For years, this was possible because the FICA tax brought in surpluses that allowed government to pay retirees more than they contributed and still help buy those other things.

Those days are gone. The huge group of baby boomers has started to retire, and that means trouble. In 2008, for the first time, Medicare paid out more than it took in.

So instead of filling the government's coffers and hiding the real size of the budget deficit, the entitlement programs have now begun to drain the treasury. Part of the "problem" is that we live longer. When Social Security started, most people didn't live to 65. Now we average 78.

This means that baby boomers like me who expect to collect Social Security and Medicare are basically stealing from children.

Think of the burden: When I was a kid, there were five workers for every retired person. Now, there are only three. And soon there will only be two young workers to fund each baby boomer's Social Security and Medicare checks.


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