My friend Bruce Bartlett writes in Forbes today about two federal reports issued his week regarding the financial state of Social Security and Medicare. It’s not good, people. The upshot — we will need to raise federal taxes by 81 percent to cover existing commitments to future recipients of those two programs, assuming that current health trends continue. Of course, we could just cut back on future disbursements by tens of trillions of dollars, but given that, with every election, the number of elderly voters increases, that’s not politically likely. Alarmed readers who want a more robust preview of the fiscal hell to come my want to examine this (on Medicare) and this (on Social Security) from colleague Jagadeesh Gokhale.
Eight years of George Bush — many of those years with Republican Congresses — afforded an opportunity to do something about this. Alas, rather than address the problem (which would have required political capital), Bush and friends added even more unfunded liabilities to the ledger and made things far worse than they were when President Clinton left office.
Given how hard it is to keep a good Ponzi scheme going, maybe Bernie Madoff should do community service rather than jail time and take over as secretary of the Treasury.