I know our elected representatives are all busy for awhile, playing golf and sunning at the beach. But when they come back, do you think they should consider the following (from a Merrill Lynch research report)?
Almost 42 percent federal spending last year was for Social Security, unemployment payments, Medicare, Medicaid and other healthcare expenditures. The 85 year old-plus population was 5.5 million, almost doubled since 1990. This category is expected to grow dramatically over the next twenty years. Current Census data puts the number of people in the 55 to 69 year age category at 51 million by 2021. The dramatic growth in this age category will put upward demands on entitlements, adding to the growing expenditures resulting from the double-digit inflation of medical costs. Only 24 percent of the country's residents are 18 and under. This is the generation who will have to finance the escalating entitlement expenditures. Almost certainly the tax burden on these income producers will have to increase.
What will the soon-to-be-known "gang of twelve" be waiting for? Is there any amount of ideological posturing and arguing that would make sense given this short-term outlook? Or will our Congress run us off the cliff to another downgrade to AA, as S&P has warned?