Wednesday, September 06, 2006

Is the U.S. Bankrupt?

I have to admit up front that I only caught bits and pieces of an interview on CNBC with Boston U economics professor Laurence J. Kotlikoff. The topic was the fiscal bankruptcy of the United States, via Social Security and Medicare programs. He took issue with a [very] recent [today?] editorial in the WSJ on the alleged "robustness" of our economy and its "fiscal soundness".
He pointed to an article on his website called "Benefits Without Bankruptcy--The New New Deal" written in August of last year.
I don't know Prof. Kotlikoff's economic stance nor do I know his underlying philosophic outlook, but here are excerpts of that particular article and the link to his website.

"First the demographics. According to U.N. projections, male life expectancy in the United States will rise from 75 to 80 between now and 2050...The share of the American population that is 65 or over is set to rise form 12.3 percent to 20.6 percent.
In 25 years when almost all 77 million members of the baby-boomer cohort have retired, we'll have twice the number of elderly, but only 18 percent more workers to pay their benefits..
...this is bound to put a major strain on the systems designed in the distant days of Franklin Roosevelt and Lyndon Johnson.
...Today, Social Security, Medicare and Medicaid benefits total $21,000 per retiree. Multiply that by the current 36 million elderly, and you see why these programs account for nearly half of the federal tax revenue. Over the past four years the Medicare benefits per beneficiary have grown 16 times faster than the real wages of the workers paying those benefits. Medicaid benefits per head have grown almost as fast. [And this is BEFORE Bush's mandate of the perscription drug benefit!!!-Blair]

That's just a taste of what this economist has to say.

As Objectivist's, we know it is only a matter of time unitl financial bankruptcy catches up to the moral and intellectual bankruptcy of altruism's philosophic practice. One thing we can all do to stem this tide, is to donate--or increase our donations-- to The Ayn Rand Institute. In the long-term, Ayn Rand's ideas, applied to every field of endeavor, are the only thing that can save us, and advance the cause of individual rights and freedom.

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