This information provided by The Federal Observer, http://www.federalobserver.com
|Two-heads are better than one, Alan!|
~ Foreword ~
Ladies and Gentlemen of the New York Times:
Greenspan's predicted 'Baby Boomers' Social Security Meltdown' becomes worse with every contributor lost in overseas outsourcing.
But that's not enough for the President, who made matters worse on June 29 by signing the GWB Social Security Giveaway to Mexico.
GWBs "Totalization" treaty will give Mexicans benefits from the US fund after 5 years' work (it's 10 for Americans!). Any Mexican illegal alien who can "prove" working 5 years in the US is also entitled. A new Social Security building in Mexico City will soon open to handle Mexican "clients."
Greenspan knows about "Totalization" and its disastrous impact, but said nothing. The Bush White House doesn't want more negative exposure prior to an election.
Bush's Giveaway Treaty automatically becomes effective in a few weeks unless defeated by both houses of Congress.
It's time for "baby boomers" (and everyone) to become vocal.. Contact your Congressmember and 2 senators, asking them to vote YES on HR 720, sponsored by Rep. Mac Collins of Georgia. - Sandra MIller, Phoenix, AZ
JACKSON, Wyo. - Federal Reserve Chairman Alan Greenspan said Friday the country will face "abrupt and painful" choices unless Congress acts quickly to trim Social Security and Medicare benefits for the baby boom generation. He said the government has promised more than it can deliver.
Returning to a politically explosive issue just before the Republican National Convention, Greenspan said the country must face up to "some tough policy choices."
Government resources even under the most optimistic economic assumptions on growth and productivity will be inadequate to provide baby boomers with the level of benefits their parents got, he said.
Speaking at a two-day conference sponsored by the Kansas City Federal Reserve on challenges posed by an aging population, Greenspan said policy-makers must address the looming crisis in Social Security and Medicare before the first wave of 77 million U.S. baby boomers begin retiring later this decade.
"We owe it to our retirees to promise only the benefits that can be delivered," he said. "If we have promised more than our economy has the ability to deliver ... as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels."
And he warned, "If we delay, the adjustments could be abrupt and painful."
"Curbing benefits once bestowed has proved difficult in the past," he noted, so the government must be careful about enacting any new benefits. Congress last year, at President Bush's urging, passed a new prescription drug benefit expected to cost more than $540 billion in the next 10 years.
The 78-year-old Greenspan, recently confirmed for a fifth term as Fed chairman, suggested one possible fix would be to increase the retirement age for receiving full benefits. It is already scheduled to rise from 65 to 67. Greenspan has suggested that the retirement age be continually adjusted to reflect ever-rising life expectancies. He has also proposed trimming the annual cost-of-living adjustment retirees receive because the current Consumer Price Index overstates inflation.
Greenspan has long been concerned about the benefits programs for the elderly. Back in 1983, he chaired a commission that rescued Social Security during an earlier funding crisis.
And starting last February, he has delivered a series of warnings about the looming crisis in Social Security and Medicare, which along with soaring budget deficits are likely to be the biggest economic challenges in the next four years.
However, the government's two largest entitlement programs have received little attention in the presidential race because neither Bush nor his Democratic challenger, John Kerry, wants to dwell on financing problems that present painful choices. Bush favors giving younger workers the option of putting part of their payroll tax into personal retirement accounts. Kerry opposes the plan for partial privatization.
In the firestorm that erupted over Greenspan's earlier comments about trimming benefits for baby boomers, Kerry rejected the idea of cutting benefits while Bush said benefits "should not be changed for people who are at or near retirement."
In a statement, Kerry spokeswoman Allison Dobson said Friday that Greenspan's testimony "should be a wake up call." She criticized Bush's economic policy saying "it has driven up endless deficits and put Social Security in danger."
Other speakers at the conference echoed Greenspan's comments about the difficult choices aging populations pose for government policy-makers.
While the United States, Europe and Japan are seen as facing the biggest difficulty financing baby boomer retirements, International Monetary Fund Deputy Managing Director Anne Krueger said developing countries will also face problems with aging populations. She said countries such as India and Brazil must "take remedial action now to establish much sounder fiscal positions" to cope with rising pension costs.
Another speaker, James Poterba, a Massachusetts Institute of Technology economics professor, said his research showed one dreaded fallout from the baby boom generation's retirement was unlikely to occur _ an "asset market meltdown" as they sell their stocks to finance their retirement. Poterba said that should not happen because the wealthy, who will not need to sell, own such a large share of financial assets.
August 28, 2004
© 2004 Associated Press. All Rights Reserved.