US Federal Reserve chairman Alan Greenspan warned Friday of possible severe consequences to the economy if policy-makers don't attack federal budget deficits projected to soar with baby boomer retirements. Greenspan said it's likely that Congress will have to make "significant adjustments" in reducing benefits to future retirees. He said it appears the country has promised more than it can afford to deliver in Social Security and especially Medicare payments, given that health care costs have been exploding. "So long as health-care costs continue to grow faster than the economy as a whole, they will exert budget pressures that seem increasingly likely to make current fiscal policy unsustainable," Greenspan said in remarks taped for a conference sponsored by the Federal Reserve Bank of Philadelphia.
(Associated Press 051202)
It should be horrific to watch while this debacle blows up in everyone's face. American, Canadian pension plans (both public and private) are possibly going to be in big trouble in less than a decade unless major attention is focused on balancing finances with demographics, otherwise there will be a revolution when the baby boomers discover they won't have enough in their pensions to retire on...while the federal governments in both countries struggle to keep themselves out of bankruptcy. Pain all around for everyone.
No comments:
Post a Comment