US General Accounting Office Comptroller General says ...
"Demographic Reality and the Entitlement State
by (Congressman - sic) Ron Paul
The Government Accountability Office, or GAO, is an investigative arm of Congress charged with the thankless task of accounting for the money received and spent by the federal government. As you might imagine, people whose spend all day examining the nitty-gritty realities of federal spending and deficits might not share the voters' enthusiasm for grand campaign promises.
David Walker, Comptroller General at GAO, has been on a speaking tour of the U.S recently -- and he pulls no punches when explaining just how precarious our nation's entitlement system really is.
He explains that Social Security and Medicare are headed for a train wreck because of demographic trends and rising health care costs. The number of younger taxpayers for each older retiree will continue to decline. The demand for "free" prescription drugs under Medicare will explode. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare. The only options for balancing the budget would be cutting total federal spending by about 60%, or doubling federal taxes.
Furthermore, Walker asserts, we cannot grow our way out of this problem. Faster economic growth can only delay the inevitable hard choices. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.
In short, Mr. Walker is telling the political class that the status quo cannot be maintained. He is to be commended for his refreshing honesty and unwillingness to provide excuses for the two political parties, the administration, or the even the entitlement-minded American public."(snip)
from the same link, Congressman Ron Paul then asks his own insightful questions
(snip)"Should the government or the marketplace provide medical care? Should younger taxpayers be expected to provide retirement security and health care even for affluent retirees? Should the U.S. military be used to remake whole nations? Are the programs, agencies, and departments funded by Congress each year constitutional? Are they effective? Could they operate with a smaller budget? Would the public even notice if certain programs were eliminated altogether? These are the kinds of questions the American people must ask, even though Congress lacks the courage to do so."(snip)
Politics and policy aside, the one very serious economic point being made by Mr. Walker is that Social Security and Medicare benefits cannot be sustained into the future without huge increases in income taxes to pay for them. Congressman Paul then raises the same point in a roundabout way which has been discussed in DD on many occasions - that the tax burden will be so high for younger US taxpayers if Social Security and Medicare continue as-is, that the gov't will have little choice but to establish 'means testing' of future Social Security and Medicare benefits - because such 'means testing' will lower the cost of the Social Security and Medicare programs, and thus lower projected tax increases on younger workers, by denying benefits to future retirees who have saved money for their own retirement until all of that saved money has first been spent paying for their own medical expenses and costs of living in retirement out of their own pocket.
IMHO this is a major consideration for younger taxpayers (like dancers) who might choose to contribute large amounts of money to IRA's.