Fed Chairman Ben Bernanke is again warning of the danger posed by the looming retirement of 78 million Baby Boomers. However Chairman Bernanke fails to focus on the real problem which is the increased National Debt which has been caused by the fiscal policy of George W. Bush and Ronald Reagan.
President Bush inherited a balanced annual budget and his policy of CHARGE and SPEND will add $4 Trillion Dollars to the National Debt in his eight years in office. At an interest rate of 5% on that added $4 Trillion Dollars the American Tax Payers will be required to pay an additional $200 Billion in interest EVERY year.
The Social Security projections show the Trust Fund will be exhausted by 2042. In the 33 years between 2009, when Bush leaves office, and 2042 the taxpayers will have paid an additional $6.6 Trillion dollars because of the added Bush debt! That is enough to have solved the funding problem the Fed Chairman is warning about for the Baby Boomer Retirement.
The additional interest paid because of the debt Ronald Reagan added between 1981 and 2006 totals just over $5 Trillion Dollars. The added interest because of the Reagan/ Bush increase in our debt from 1981 to 2042 will approach $20 Trillion dollars if we do not balance our budget and begin repaying the National Debt. In 1980 the annual interest on the National Debt was $80 Billion. By 2008 the interest on the National Debt will be $500 Billion per year. That is an increase of $420 Billion PER YEAR!
If we had kept our National Debt at the level it was when Ronald Reagan was elected, the annual Federal Budget would be about $400 Billion dollars lower and we would have the resources to deal with Social Security and Medicare. The choices now are sizeable tax increases and/or failure to pay the promised retirement benefits to the Baby Boomers.