I.O.U.S.A - Addison Wiggin [18]
’ t get straight
meetings . . . people love it. What
answers from politicians, or they ’ re
they’re frustrated with is that they
told things that just don ’ t make sense,
can’t get straight answers from
politicians, or they’re told things
like, ‘ We can cut taxes and add a pre-
that just don’t make sense.
scription drug benefi t to Medicare,
’
—BOB BIXBY
and you know instinctively people
think, ‘ I don ’ t think that really adds
up . . . but this guy is telling me that I can have it all so . . . okay, I ’ ll vote for him. ’ ”
There ’ s a joke going around Washington that goes something like this: The guy who promises to go to Washington and collect $10 in taxes, then send $10 back to the community, gets polite applause. But the guy who promises to collect $10 in taxes, then send back $11 — he gets elected.
Do we really believe the government can function this way?
The Silver Tsunami
If everyone
’ s pointing their fi nger in a different direction, who is really to blame? That ’ s what I.O.U.S.A. aims to fi nd out. Or, at the very least, we hope to get the parties involved c02.indd 28
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Chapter 2 The Budget Defi cit 29
to recognize that they, in turn, are each part of the problem and each must come to the table to seek a common solution.
Without it, the second - longest - standing republic in human history will fail. That is no small accomplishment.
In the past 40 years, the U.S. government has run 35 budget defi cits, and only 5 budget surpluses. (See Figure 2.2 .) Lucky for them, at the same time, Uncle Sam has been running large annual surpluses in our Social Security program.
Those surpluses are spent every year to help pay other bills the federal government has run up.
Here ’ s where the trouble lies.
If you discount the Social Security surpluses, the government ’ s real track record on spending money it doesn ’ t have looks even worse. By 2017, less than 10 years from now, the Social Security program will start paying out more than it garners in revenue. As the baby boomers retire in larger and larger numbers, the balance sheet of the Social Security trust fund deteriorates.
Beyond 2017, Social Security will no longer help the government pay its bills. (See Figure 2.3 .) Defi cits in the Medicare Figure 2.2 The U.S. Budget over 40 Years: 35 Defi cits, 5 Surpluses c02.indd 29
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30 The
Mission
PROJECTIONS
SOCIAL SECURITY + MEDICARE
ANNUAL DEFICIT
'08
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48
2008 BUDGET DEFICIT
$410 BILLION
– $1 TRILLION
SOURCE: Social Security and Medicare Trustees Report, 2008
– $2 TRILLION
Figure 2.3 Defi cit Projections, Including Social Security past 2017
Source: Social Security and Medicare Trustees Report 2008.
program and other federal spending will only serve to make the situation worse.
One second past the stroke of midnight on January 1, 1946, a star was born. The nation
’ s fi rst baby boomer.
Kathleen Casey - Kirschling, has had this distinction throughout her life — she even has a boat aptly named First Boomer.
On October 15, 2007, Casey - Kirschling, applied for Social Security benefi ts. Over the next 20 years, some 80 million other Americans will follow suit — and the U.S. government is ill equipped to provide for them.
c02.indd 30
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Chapter 2 The Budget Defi cit 31
Called the
silver tsunami, the Social Security crisis is projected to only get worse as the years go on. On October 15, 2007, Reuters reported, “ The latest report by the program ’ s trustees said by 2017, Social Security will begin to pay more in benefi ts than it receives in taxes. By 2041, the trust fund is projected to be exhausted. ”
The Federal balance sheet is already unsustainable. And the baby boomers have only begun to retire this year. “ The baby boomers are not a projection, ” says Senator Conrad.
“ They were born, they ’ re out there, they ’ re going to be eligible for social