• Large Future Deficits
• Demographics
• Future Costs
• Macroeconomic Problems
• Slow Economic Growth
• Generational Accounting
• Increased Interest on Debt
• Capital Flight
• Economic Solutions
• Social Security
• Medicare
• Discretionary Spending
• Taxes
• Political Limitations
• Ideological Difference
• Partisan Politics
• Public Awareness
• Deficit Politics
• Entitlement Spending
• Policy Recommendations
• Complete Recommendation


• Full Printable Document

"When we get to the long (run), I think we are facing some panic."  -Harvey Rosen: Chairman of the Council of Economic Advisers
 

The demographic storm and increasing costs of Health Care will cause the United States to have very high future deficits.  Because our population is aging quickly, the ratio of workers to retirees is significantly decreasing, making it impossible for the government to collect a sufficient amount of revenue in taxes to pay promised Social Security benefits.  Although currently running a surplus in the Social Security Trust Fund, costs will exceed revenues by 2017, and by 2041, funds will be available for only 73% of promised benefits.  Health care costs are rising dramatically as well, adding to the deficit problem.  The rising costs of Medicare and Medicaid are due to technological advances and the American lifestyle.  In the past twenty years, health care has grown from 5.8% to 12.8% of GDP, and by 2011, health care is projected to make up 16.6% of our national income.  The combination of unfavorable demographics and increasing health care costs will cause the United States to incur very large future deficits.