Wednesday, March 17, 2010

The entitlement big hole:-2

By just wishing it away or just putting it off till the next election or let the next elected official do it will not do anymore. These countries have already promised enough that they will have to generate thousands of times their GDPs together to pay their citizens.

I don’t have to go into much detail regarding how they got into this mess, but now they will have to deal with it whether they like it or not. And the more they promise the messier will it get.

Then we are back to the United States, where by one calculation we have already promised so much of the debt in the future decades that by one estimate it is 500 times more than our total gross GDP and we will have to raise taxes to almost 86 percent (by one calculation) just to balance the federal deficit. How are we going to do it without hurting the younger generation or the older generation or both? It is a dilemma neither of the political parties here, nor in other European countries is willing to confront.

As I have said countless times in my previous posts, we will have to either reduce or sometimes eliminate entitlement (which is unlikely I fear) or raise taxes on the young and also on the old on everything that is conceivable which is now not been taxed. Are we willing to have that nightmare scenario now or maybe later when it will be beyond nightmare? I guess I can never be a good politician by raising difficult and unpopular issues.

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