The Economic Tsunami

Doomerosity level: Extreme

Here's a recent piece in USA Today concerning budget deficits and what will happen to the profligate nation's economy when the Boomer Generation starts retiring. Unlike a real tsunami, this one is mathematically certain to happen, and when it starts and how bad it will be can be precisely predicted, because of demographics. In brief, there simply will not be enough working people to pay for the unfunded liabilities (that's Social Security and Medicare) when the large numbers of Boomers retire, as they will in 2011. Every year after that will produce larger and larger deficits: they are now estimated at $74 trillion. Reasonable people would note that seniors are the most active voting group in Imperial Nation and will fight to the death to preserve "their" benefits. (Many of this generation have not saved much money and believe that a magic pension will somehow appear when it's time to retire...). Much could be done now to stave off this tsunami, but of course there is no political will to do so. (See next post). For further reading, although it won't be pleasant: The Coming Generational Storm, Burns and Kolitkoff (2004), Running on Empty: How the Democratic and Republican Parties are Bankrupting Our Future and What Americans Can Do About It, Peterson (2004).

Meanwhile, back in the Land of Nod: remember the $223 million Bridge to Nowhere? Since it became so highly puclicized, those in Congress have become sensitive to "how it looks," and decided to scrap this particular piece of pork. Oh, Alaska will still get to keep the money (!), the mandate for the bridge will just be "eliminated." In light of this, Chaos wonders why anyone need bother with delineating actual projects for Congressional (that's taxpayer) largesse: just announce the amounts and don't bother coming up with "the Museum for Golden-Cheeked Orioles" or "studies of why people like to scratch their heads."