US Candidates Ignore Looming Debt Crisis

code_rage writes "Carolyn Lockhead of The San Francisco Chronicle has written an article about one of the most important, but overlooked, political issues we are facing. Baby-boomers will soon begin retiring, which will result in a huge fiscal imbalance (deficits and debts). The article says that the present value of the anticipated debt is estimated to be between $40 trillion and $72 trillion, depending on the source. To put that in perspective, the current national debt is $7.3 trillion.""

Former Treasury Secretary Paul O'Neill commissioned a study (free PDF) that was written by Jagadeesh Gokhale and Kent Smetters. To give a sense of how serious the fiscal imbalance is, consider some of the painful measures that the study said would be necessary to balance the books:
- More than double the payroll tax, from 15.3% to 32% of wages
- Raise income taxes by two thirds
- Cut Social Security and Medicare benefits by 45%
- Eliminate all "discretionary" spending (including such constitutionally mandated government functions as the military and the judiciary)

Peter G. Peterson has written a book about the issue: "Running On Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do about It." He recently gave an interview at the Council on Foreign Relations. He prefers to express the issue in terms of cash flow, because Social Security and Medicare are "pay as you go" systems (there is essentially no trust fund). The cash flow impacts will be an estimated $783 billion in 2020, increasing to trillions later.

Peterson offers some concrete proposals in the interview, and offers some political cover to the candidates in saying "I have never thought that a political campaign is an optimum environment for serious discussion or practical proposals.

Comments

Re:Not ignored

[Scarblac]

The solution is very simple: cut spending, grow the economy, reform Social Security into private accounts. Bush is saying he'll do all those.

But what he actually did the last four years is almost exactly the oppositie - cut taxes and increase spending.

And the MadGrab^H^H^H^H^H^H^HWar was a lie!

[The Ape With No Name]

Or at least, the reason put forward for the war. You can hate me for the Latin but:

Res Loquitur Ipsa
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Powell: Unlikely WMD Stocks Will Be Found in Iraq
Mon Sep 13, 2004 03:27 PM ET

Reuters

By Arshad Mohammed

WASHINGTON (Reuters) - Secretary of State Colin Powell, who made the case to the world that pre-war Iraq had stocks of chemical and biological weapons, said on Monday he now thought these will probably never be found.

"I think it's unlikely that we will find any stockpiles," Powell told lawmakers when asked about the intelligence behind his Feb. 5, 2003, U.N. Security Council speech laying out U.S. arguments for the war with Iraq that began six weeks later.

Powell's latest comments appeared to be his most explicit to date suggesting that the central argument for President Bush's decision to invade Iraq -- the belief it possessed weapons of mass destruction -- was flawed.

As early as January Powell said it was an "open question" whether or not such arms would be found and he conceded the possibility Iraq might not have had any when the war began.

Bush himself had often said that even if no such weapons are found he did the right thing in invading Iraq in March 2003 and toppling Iraqi leader Saddam Hussein, arguing that the country has been liberated from brutal dictatorship.

U.S. officials have also said that whether or not it had stockpiles in 2003, Iraq was a threat because it had possessed and used chemical weapons in the past, notably to kill 5,000 Iraqi Kurds in the town of Halabja in 1988.

The war in Iraq, in which more than 1,000 U.S. troops have died, and the violent insurgency that has developed since the U.S. invasion are a major issues in Bush's reelection battle against Democratic nominee Sen. John Kerry of Massachusetts.

Powell made his comments as Charles Duelfer, the CIA-named leader of the hunt for weapons of mass destruction in Iraq, is working on a report about his findings that was expected to be completed in the next few weeks.

Duelfer's predecessor, David Kay, said as he left the post in January that he believed there were no large stockpiles of weapons of mass destruction when Washington went to war.

While he had reservations about the state of Iraq's efforts to obtain nuclear weapons when he spoke before the U.N. Security Council in February 2003, Powell insisted at that time that it had stocks of both biological and chemical weapons.

"There can be no doubt that Saddam Hussein has biological weapons and the capability to rapidly produce more, many more," Powell said then, at one point holding up a vial of simulated biological agent -- an image broadcast around the world.

"Our conservative estimate is that Iraq today has a stockpile of between 100 and 500 tons of chemical weapons agent," he said at the time.