Greenspan Points to Danger of Rising Budget Deficits - New York Times

Greenspan Points to Danger of Rising Budget Deficits - New York Times:

Greenspan is absolutely correct. Fiscal discipline is an American weak point. We simply cannot continue to fund our economy with foreign debt and little or no personal savings that can create a pool of investment capital.

When the baby boom folks hit retirement en masse, we simply will not be able to afford the costs without reducing spending elswhere. Where is our national leadership? Bush, to his credit, attempted to start the movement by reform of Social Security. Congressional leaders were unwilling to back a legitimate effort to fix the problem. Shameful!

"The nation's budget problems will not be solved just by enacting new rules, Mr. Greenspan added. 'The fundamental fiscal issue is the need to make difficult choices among budget priorities,' he said, and 'this need is becoming ever more pressing in light of the unprecedented number of individuals approaching retirement age.'

Baby boomers will start retiring in 2008, Mr. Greenspan noted, putting stress on Social Security. In addition, the 'soaring cost of medical care' for the aging population will place 'enormous demands on our nation's resources.'

He said he did not believe that major increases in taxes were the solution.

'Tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base,' he said, adding that the government should seek to 'close the fiscal gap primarily, if not wholly, from the outlay side.'"