or, "It's the Economy AND the Deficits, Stupid! "
"While both candidates have talked almost exclusively about the next four years, the nation's long-term fiscal problems have loomed ever larger.
It may sound like a tired refrain by now, but the real action is in Social Security and Medicare. Yes, pity the nation's biggest entitlement programs. No one seems to want to cure what ails them.
In testimony before Congress last month, Alan Greenspan, the Federal Reserve chairman, said the budget's longer-term prospects remained troubling. "With the baby boomers starting to retire in a few years and health spending continuing to soar," he said, "our budget position will almost surely deteriorate substantially in coming years if current policies remain in place."
JUST how substantially the budget position will deteriorate or, in plain English, how much the government will dip into the red, has been a popular subject among economists of late. Laurence J. Kotlikoff, a professor at Boston University, has offered figures in the tens of trillions of dollars.
The government would not have to borrow those trillions all at once. The debts would climb over decades. It would, however, have to make sure it was in a position to borrow at least some of the money.
That means it would need a plan. Just as investors will not lend to a struggling airline with no strategy to control its debts, investors will not lend to a government whose ability to repay looks as if it can only worsen.
...sure, making the Bush tax cuts permanent is only gonna make it a few trillion or so worse over 10 years, and the rise in health care costs will suck another 1.5 trillion annually, but I plan to retire and put my money in foreign bonds and commodities before it reaches critical mass.