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Argument: US retiring baby-boomers makes paying down national debt important

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Argument summary

Retiring baby-boomers (a wave of children born in the post-WWII period that will be turning 65 in the years around 2010) will be a major economic problem for the United States in the early 21st century. As they retire, they will become an economic and social burden for those still working. As such, it will more and more difficult for the United States to pay down its debts as the costs of supporting these retiring baby-boomers will be increasing. Therefore, efforts to make this happen sooner than later make sense.

Extended argument case

  • Baby boomers have promised themselve gigantic benefits that are unprecedented in size and scope - the US "hidden debt": One writer on Parapundit called them "fiscally irresponsible" for this reason. [1] USA Today 10/03/04 - "The 'Greatest Generation' and its baby-boom children have promised themselves benefits unprecedented in size and scope. Many leading economists say that even the world's most prosperous economy cannot fulfill these promises without a crushing increase in taxes — and perhaps not even then...A USA TODAY analysis found that the nation's hidden debt — Americans' obligation today as taxpayers — is more than five times the $9.5 trillion they owe on mortgages, car loans, credit cards and other personal debt. This hidden debt equals $473,456 per household, dwarfing the $84,454 each household owes in personal debt. The $53 trillion is what federal, state and local governments need immediately — stashed away, earning interest, beyond the $3 trillion in taxes collected last year — to repay debts and honor future benefits promised under Medicare, Social Security and government pensions. And like an unpaid credit card balance accumulating interest, the problem grows by more than $1 trillion every year that action to pay down the debt is delayed."
  • The fraction of non-elders on Social Security Disability Insurance benefits has grown substantially over the past the decades preceding 2006, with rising costs: In 1985, 2.2 percent of individuals between the ages of 25 and 64 were receiving DI benefits, but by 2005 this fraction had risen to 4.1 percent. If recent entry and exit rates continue in the years ahead, more than 6 percent of the nonelderly adult population will soon be receiving DI benefits.[2]
  • The coincidence of budgetary problems and this babyboom retirement is seen by some as a collision course:
Progressive Policy Institute President Will Marshall said: "The conjuncture of growing deficits and debt and the baby boom retirement makes for a perfect fiscal storm."[3]
  • Some predict that the current course will necessitate the US government renegotiating social contracts, such as with lower retirement and health benefits:
According to Laurence Kotlikoff and Scott Burns in the Coming Generational Storm, if our government continues on the course it has set, there will be "drastically lower retirement and health benefits". - MIT Press Summary
Fed Chairman Alan Greenspan told the House Budget Committee in 2004, "As a nation, we may have already made promises to coming generations of retirees that we will be unable to fulfill."
  • Its burdern on Social Security: The retirement program had $12.7 trillion in obligations it could not meet for workers and retirees at the 2004 Social Security tax rate.[4]
  • Its burden on Medicare: The health care program had a $30 trillion unfunded liability for people in the system in 2004 as workers or beneficiaries.[5]

Counter-arguments

  • These baby-bommers weren't a major burden between 0 and 20 as dependents, why now?
  • Hispanic and other immigrants will make up the difference in the work-force and help cushion the baby boomer crisis.

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