The Coming Generational Storm: What You Need to Know about America's Economic Future
by Laurence J. Kotlikoff, Scott Burns
This is a good book I was reading today - the authors, economists, discuss the gigantic problems with Social Security and Medicare, and how Bush's plan doesn't do enough to solve them. The US government has future debts of $45 trillion dollars, and there won't be enough money to pay them. European countries like France also have some of the same problems, as does Japan.
Some of the findings from their look at the present and future payouts of Social Security:
SS and Medicare account for almost all of the future debts of over $45 trillion.
Immigration - even if immigration per year to the United States doubled, it would not be enough to avoid higher payroll taxes to pay out Social Security benefits. Immigration would have to be around 5.5 million people a year to keep the worker to retiree ratio at the current level, to avoid taxes rising and benefits being cut. At 5.5 million per year, the US population would go from 280 million to 335 million - in 10 years - just from immigration.
Since 1960, consumption per retiree has doubled relative to consumption per worker. Baby boomers are those 76 million Americans born between 1946 and 1964, who are about to start retiring. If their consumption keeps rising as retirees, no amount of Social Security payout will be enough. What it means is that the current retirees and baby boomers are not only consuming many of the resources available now, but are indebting future generations as well.
Reviews:
Kotlikoff and Burns (MIT '62) show how to avoid a fiscal crisis in the next generation -- and how to protect yourself if the government acts too late: policy recommendations and individual strategies to protect against skyrocketing tax rates, drastically reduced health and retirement benefits, high inflation, and a ruined currency.
"Among academic experts, Larry Kotlikoff has earned the title 'Mr. Generational Accounting.' His unfuzzy arithmetic decisively rebuts the Bush tax cuts, which are based on the delusion that 5 - 4 = 6, not 1. Read and judge for yourself the specter of our future: too many retirees dependent on too few working-age people. Fiscal imprudence now mandates broken promises later."
--Paul A. Samuelson, Institute Professor Emeritus, MIT, Nobel Prize Winner in Economic Sciences
"Kotlikoff and Burns document and analyze the most serious issue facing the American government today: the looming intergenerational conflict created by its gross failure to develop a consistent plan to fund and manage entitlements for the elderly, the cost of which will explode when the baby boom generation retires. This book is essential reading for those concerned about their own future and their childrens'."
--Daniel McFadden, Cox Professor of Economics , University of California, Berkeley, Nobel Prize Winner in Economic Sciences
http://www.amazon.com/gp/product/pr...0/104-2926533-9661548?_encoding=UTF8&n=283155
by Laurence J. Kotlikoff, Scott Burns
This is a good book I was reading today - the authors, economists, discuss the gigantic problems with Social Security and Medicare, and how Bush's plan doesn't do enough to solve them. The US government has future debts of $45 trillion dollars, and there won't be enough money to pay them. European countries like France also have some of the same problems, as does Japan.
Some of the findings from their look at the present and future payouts of Social Security:
SS and Medicare account for almost all of the future debts of over $45 trillion.
Immigration - even if immigration per year to the United States doubled, it would not be enough to avoid higher payroll taxes to pay out Social Security benefits. Immigration would have to be around 5.5 million people a year to keep the worker to retiree ratio at the current level, to avoid taxes rising and benefits being cut. At 5.5 million per year, the US population would go from 280 million to 335 million - in 10 years - just from immigration.
Since 1960, consumption per retiree has doubled relative to consumption per worker. Baby boomers are those 76 million Americans born between 1946 and 1964, who are about to start retiring. If their consumption keeps rising as retirees, no amount of Social Security payout will be enough. What it means is that the current retirees and baby boomers are not only consuming many of the resources available now, but are indebting future generations as well.
Reviews:
Kotlikoff and Burns (MIT '62) show how to avoid a fiscal crisis in the next generation -- and how to protect yourself if the government acts too late: policy recommendations and individual strategies to protect against skyrocketing tax rates, drastically reduced health and retirement benefits, high inflation, and a ruined currency.
"Among academic experts, Larry Kotlikoff has earned the title 'Mr. Generational Accounting.' His unfuzzy arithmetic decisively rebuts the Bush tax cuts, which are based on the delusion that 5 - 4 = 6, not 1. Read and judge for yourself the specter of our future: too many retirees dependent on too few working-age people. Fiscal imprudence now mandates broken promises later."
--Paul A. Samuelson, Institute Professor Emeritus, MIT, Nobel Prize Winner in Economic Sciences
"Kotlikoff and Burns document and analyze the most serious issue facing the American government today: the looming intergenerational conflict created by its gross failure to develop a consistent plan to fund and manage entitlements for the elderly, the cost of which will explode when the baby boom generation retires. This book is essential reading for those concerned about their own future and their childrens'."
--Daniel McFadden, Cox Professor of Economics , University of California, Berkeley, Nobel Prize Winner in Economic Sciences
http://www.amazon.com/gp/product/pr...0/104-2926533-9661548?_encoding=UTF8&n=283155
