Back between 106 and 43 B.C., Cicero, one of the greatest minds of the Roman empire, is quoted as saying,
“The budget should be balanced; the treasury should be refilled; national debt should be reduced; and the arrogance of public officials should be controlled.”Apparently not much has changed between Cicero’s time and today.
As 78 million Baby Boomers prepare to launch into the realm of retirement villages, entitlement benefits, and subsidized healthcare, no one can say with certainty how things will fare. But the one thing that is certain is the concept of retirement has changed and will continue to change. Gone are the days of working for the same corporation for 40 years, retiring with a nice watch, and then going home to collect a healthy pension.
In today’s era of hyper cost-consciousness and global competitiveness, many businesses are in a fight of survival simply to afford the most basic of employee benefits. In sharp contrast to the corporate America of yesteryear, the modern employee will likely be employed by a host of companies throughout his working lifetime. This will mostly be due to corporate downsizing, mergers and, more often than not, employee dissatisfaction.
Today, the financial risk and burden that once fell upon the corporation now falls onto the individual worker. Those under 40 years old who are planning on the federal government taking care of them financially in their old age are living in absolute ignorance. Barring a strong dose of fiscal discipline, coupled with political vision and intestinal fortitude, the American social safety net of government entitlements will falter before our eyes. Its impending collapse will be under the immense weight of inadequate planning, unrealistic promises, dreadful demographics, and skyrocketing medical costs. Or as the first Baby Boomer, Ms. Casey-Kirschling put it,
“I can’t imagine what’s going to happen with our children and our grandchildren. They’re not going to be able to retire.”During a 2005 speech in Colorado, President George W. Bush expressed his growing concerns about the looming entitlement crisis by stating,
“Some of you may think there’s what they call a Social Security trust; the government collects the money for you, we hold it for you, and when you retire, we pay it to you. But that’s not how it works. You pay your payroll taxes, we pay for the people who have retired, and if there is any money left over, we spend it on government. That’s how it works. And what’s left is an empty IOU, a piece of paper.”If your desire is to live free from deception, it is vital you wake up to the economic realities facing our nation. The truth is, the Social Security system is broken, as is the Medicare system. The entitlement crisis is real and there are no easy answers. But there are answers. Two that immediately come to mind are:
- One choice is to cut entitlement benefits for Americans.
- The second option is to raise taxes in order to pay for enormous government spending increases.
There is also a third option that will prove much less painful in the short term, but will be the most disastrous in the long term. That third option for the U.S. federal government, and its pain-adverse citizenry, in confronting the entitlement crisis will be to simply borrow the money. We borrow for everything else in this country, so why not just borrow the money we need to pay for the entitlement crisis? Borrowing from others will allow Americans to keep their financial house of cards propped up long enough to continue their lives of self-indulgence without having to bother with things like tax hikes and spending cuts.
Creating debt is what Americans do best. Why would it apply any other logic to the looming entitlement crisis?
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