Wednesday, January 19, 2011

Romer on the Deficit

Christine Romer previously served as the chairwoman on the Council of Economic Advisors to the President. Here are her remarks.

Some background info: the current national debt is approximately $12 trillion and projected to increase to $20 trillion by 2020. The deficit will continue to grow because of entitlement programs. As of today entitlement programs, military spending, and interest payments on the debt account for nearly 70% of government spending. If the government only spent money on social security, medicare, military, and interest payments we will never payoff the debt. The burden of medicare and social security are far too much for us to support. Retirees tend to argue they have paid into medicare and deserve coverage, unfortunately with the rising health care costs and expanded coverage current retirees will receive far more in medicare payments then they ever paid in. The point I'm making is straightforward, any attempt to reduce government deficits needs to start with medicare, social security, and military spending. Anyone discussing debt reduction without mentioning the medicare, social security, and military spending should not be taken seriously.

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