Most people refer to "the elephant in the livingroom" when discussing huge, obviously important issues that no one wants to talk about. Personally, I prefer "the monkey in the closet". Wouldn't you get pretty freaked out if you opened your closet and a monkey jumped out at you? That's sure not something I'd talk about.
Anyway, Alan Greenspan doesn't like to wade into political waters very much, but in recent Congressional testimony he "urged urgency" in dealing with the looming baby-boomer retirement tidal wave that's poised to swamp the Social Security system -- America's monkey in the closet.
He said the prospect of the retirement of 77 million baby boomers will radically change the mix of people working and paying into the Social Security retirement fund and those drawing benefits from the fund.And what if we don't? Or what if we raise taxes rather than cut spending?
"This dramatic demographic change is certain to place enormous demands on our nation's resources - demands we will almost surely be unable to meet unless action is taken," Greenspan said. "For a variety of reasons, that action is better taken as soon as possible."
"I am just basically saying that we are overcommitted at this stage," Greenspan said in response to committee questions. "It is important that we tell people who are about to retire what it is they will have." He warned that the government should not "promise more than we are able to deliver." ...It's easy to see what will happen if we don't cut spending: all we have to do is glance across the Atlantic. Europe is facing similar problems, and their vast welfare states are on the brink of economic collapse. They can't pay for their own security, and they're basically stalled technologically. Is that the price we're willing to pay to be babied by Uncle Sam?
"We are going to be confronted ... in a few years with an upward ratcheting of long-term interest rates which will be very debilitating for long-term growth," Greenspan told the committee if the deficit problem is not addressed. ...
"Tax rate increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base," Greenspan said. "The exact magnitude of such risks is very difficult to estimate, but they are of enough concern, in my judgment, to warrant aiming to close the fiscal gap primarily, if not wholly, from the outlay side."
However, keeping to my role as a chicken biggle, I'm not going to worry. Once younger generations start dominating the voter pool I expect the boomers' power will be greatly diluted. Everyone under 50 should know they can't count on Social Security for diddly-squat, and we're going to get tired of financing our elders' poor financial planning eventually. Boomers need to start taking responsibility for their own lives, instead of just voting benefits to themselves out of their kids' pockets.