In 10 years CBO expects the number of people on social security to increase by 40%

[dkf]

“We are confronting now in our country changes of a sort we have not had to make in the past,” he said. If one looks at the 20 years before the 2007-2008 financial crisis, he said, “we had rising spending on Social Security and on the major health care programs that was offset as a share of GDP (gross domestic product) by a decline in defense spending.”

But “that’s not a strategy that can be repeated at that magnitude over the next 40 years, because defense spending has come way down as a share of GDP and because the demographic pressures” that are driving up Medicare, Medicaid and Social Security outlays “are so intense,” Elmendorf said.

“We have a large budget imbalance, we have large projected deficits, a debt that will remain at a historically high share of GDP and will be rising at the end of the coming decade. What that implies is that small changes in budget policy will not be sufficient to put the budget on a sustainable path,” he warned.

The CBO chief said a $4 trillion reduction in cumulative deficits over ten years would result in a balanced budget by the end of the ten-year period but to get that deficit reduction entirely from spending would require a two-thirds cut in all non-defense discretionary spending.

http://nbcpolitics.nbcnews.com/_news/2013/02/05/16854897-cbo-forecasts-growing-debt-even-as-economy-recovers?lite

[leftstreet]

1. Guess somebody better put together a fucking Jobs Program n/t

[SmileyRose]

2. win

epic win

[sakabatou]

6. And then the Republicans kill it

[rhett o rick]

3. Please dont post without comment. nm

[dkf]

4. Huge future problem that will drown out all the investment and much of the safety net.

Moreover we've kneecapped our ability to raise taxes by making the Bush tax cuts permanent.

We are so screwed.

[JDPriestly]

7. And a good portion of the investment is from pension funds and 401(K)s which belong to

baby boomers. If the baby boomers retire and are forced to spend down those funds and savings just to live, the stock market won't be worth a pig's liver.

[dkf]

11. The bond market is larger than the stock market.

And you would assume at retirement your portfolio had more bonds anyway.

Maybe it will be the US Treasury that takes the hit. That would be bad for interest rates.

[Yo_Mama]

47. All assets will suffer

Including home values.

[kestrel91316]

9. We don't need a comment. This poster's intent is

pretty obvious.

And never, ever has a good word for Obama or any Democrat or Democratic policy. EVER.

[dkf]

12. Democrats used to be the party that fixed our finances.

I don't know what has happened to it.

[rhett o rick]

20. I do not fear his "intent". I have confidence that I can refute or ignore as needed.

[bigapple1963]

5. was this already

projected and pre-funded by the boomer generations in the 1980s?

[JDPriestly]

8. Yes. Well, at least that was what we were told.

And then came George W. Bush and two wars with tax decreases. Wow! What he did to this country. It's a crying shame. What a jerk.

[dkf]

13. If we had paid down the debt we would be golden.

If only Al Gore had won...I cried when he conceded. That was such a turning point for this country.

[RandiFan1290]

19. Your breathless defense of the Bush tax cuts can be easily found in the archives

We ain't buying what you are sellin'

[dkf]

24. What a bunch of malarkey.

I don't support raising taxes in the depths of a recession, but I never ever ever said the Bush tax cuts were a good idea, nor have I ever supported making them permanent. What a bunch of hooey.

[LanternWaste]

35. I have little doubt you may even wish us to believe that statement...

I have little doubt you may even wish us to believe that statement...

[dkf]

36. Go ahead and try to find where I supported making the Bush cuts permanent.

You won't because I don't. The numbers don't work without the complete reversal of the Bush tax cuts.

[rhett o rick]

22. Paying down the debt at this time would kill the economy. We need jobs.

And if we have to increase the debt to get them, we need to borrow. If we cant get the economy jump-started, we are toast.

Show how in history, paying down the debt in a recession, boosted the economy.

[dkf]

23. You miss the point...if we had stayed on the path Clinton had set up for us, our situation would be

Very different. Bush was the worst thing that happened to this country.

[rhett o rick]

31. So your point is that if we had done stuff differently in the past, we wouldnt be focked now?

How astute. Bush's wars are being paid for by the middle class. It will break us.

[dkf]

33. Clinton's plan was to pay down the deficit so we would have low debt

When we needed to fund the needs of the baby boomers. Now our debt is large, and in about a decade the interest on the debt is going to be quite significant. I think I heard it may exceed defense spending.

Moreover Rogoff and Reinhart did a huge study on government debt and found when debt exceeded 90-100% of GDP, growth slows.

That is why we are up the creek.

[rhett o rick]

37. Are you talking about SS or the debt? They arent related. nm

[dkf]

38. You need to think a little deeper to understand the issue.

First of all consider the implications of lower growth on SS receipts. That causes the funds to run out sooner.

Second consider what happens when the trust fund runs out. It is feasible to budget that shortfall from the income tax receipts. But if the income tax can't fund the interest on the debt and other spending, how can it fund the shortfall?

[rhett o rick]

39. I did as you suggested and thought really, really deep and

If revenue generated by the SS tax doesnt cover expenses, then you raise the tax. Pretty simple math there. It was designed to pay for itself. And you are making up the shit about "lower growth".

Once again, the trust fund was intended to cover the additional expense from the extra population during the baby-boomer bubble.
Now listen very carefully. The trust fund was intended to cover the baby-boomer bubble and run out when the baby-boomers are no longer a problem. IT WAS DESIGNED TO RUN OUT. IT WAS INTENDED TO RUN OUT. The conservative Chicken Llittles running around trying to use fear are crying "the trust fund will run out, the trust fund will run out." No shit Shurlock. They want to frighten people into cutting SS services.

[dkf]

40. The SS fund is going to run dry when the end of the baby boomers

Is 69 and the oldest of the boomers is 87

Life expectancy is 78.

So it gets us through half the baby boomers.

The Greenspan commission was supposed to raise the 1.8% actuarial gap over the coming 75 years following 1983. It hasn't worked out as planned.

[rhett o rick]

43. I would love to see your sources for the calculation. In any case the answer is easy.

I wouldnt doubt that the "trust fund" might be running low because Bush, I believe, reduced the revenue by lowering the cap. We need to raise the cap.

We need to raise the cap. Repeat after me, WE NEED TO RAISE THE CAP and not cut services.

[newfie11]

17. Yes and conveniently not usually mentioned

When baby boomer's and SS are brought up.

[bluestateguy]

10. And to think that there were some folks here who wanted the payroll tax holiday extended yet again

One year was fine; two years was iffy, but understandable. Beyond that you are starting to put SS at risk in the long run.

[pa28]

14. And that's why the Greenspan commission decided we should pay extra to provide a cushion.

Working Americans have already sacrificed to make sure boomers were covered during their retirement years. Now it's time to put a bookend on the idea of a trust fund by spending it down to zero as intended.

[dkf]

15. Once it's spent down to zero then there's a 25% cut in benefits projected.

It's running out too soon.

[pa28]

16. When that day arrives SS has a genuine problem. I think we agree there.

That day may come in 2026 or 2036 or even later and eventually the program will need re-structuring.

SS was intended originally to be a pay as you go system and returning to that model requires spending down the trust fund.

[rhett o rick]

21. I agree completely. Having a "trust fund" is only a temptation for spending.

To be clear, us babyboomers paid for our own retirements via the "trust fund".

[dkf]

26. And when the trust fund is gone, that extra money you paid is also gone.

So who comes up with the difference in what is collected vs what is promised?

Do you think you will be alive in 2033?

[MannyGoldstein]

29. Who came up with the trillions for the Bush/Obama tax cuts

For the wealthy, which were not restored to previous rates in the recent fiscal cliff shockdotrining?

Working Americans.

It's time working Americans got back some of what's been looted from them, no?

[rhett o rick]

30. The purpose of the "trust fund" was to have extra money to pay the baby boomer

population bulge. We baby-boomers paid into it our whole careers. We will get it back and when it is gone we will have USED IT. It will have accomplished what it was intended for.

If you want to reduce the deficit, tax the rich that have been looting the middle class treasury for four decades.

[pa28]

41. That's exactly what happened and we gen x'ers helped. Part of the social contract.

Unfortunately the Very Serious People are saying the trust fund is made of "worthless IOU's" or that it's "already been spent" and you can't get it back.

They want to solve this by issuing more "IOU's" which they'll pay back this time. They promise.

[rhett o rick]

42. Of course we dont put the SS revenue in a box until we need it. But we do keep track

of how much we have on the ledger. The ledger shows we have a positive balance for the SS account of trillions. In the war account we have many trillions of debt. If we want to balance the budget we need to raise money to zero out the war account. The SS account doesnt need money.

[MannyGoldstein]

28. So we need to cut it now, in case it needs to be cut later!

Got it.

[rhett o rick]

45. I knew you would catch on. "Cut Social Security benefits now, so we dont have to cut them in the

future." And I'm guessing we'd be pressured into cutting them in the future also.

[MannyGoldstein]

46. This stuff is becoming more insane every day

If this were a fictional movie, it would be funny.

[HiPointDem]

18. ramping up the entitlement cut propaganda again

[libtodeath]

25. Remove the fucking cap that lets the wealthy basically opt out of it.

[MannyGoldstein]

27. These people have only been alive 55+ years

No wonder it's a sudden crisis!

ALL HAIL THE SHOCK DOCTRINE.

[rhett o rick]

34. I might be wrong but arent they leading up to suggesting "targeted" euthanasia?

I am sure it could be rationalized over mass starvation.

Have a good day!

[jwirr]

32. This was expected because as this generation matured they needed added supports to account for

their numbers. Why not raise the cap for them?

[Blue_In_AK]

44. I guess the good news is

that I read here yesterday that the baby boomers are less healthy than their parents were, so -- woo-hoo -- we're all gonna die. The sooner, the better apparently.