Loose fiscal policy kills democracy
TO THE EDITOR:
The City Paper featured an article recently in which Federal Reserve Chairman Alan Greenspan said the aging U.S. population will present a "daunting challenge" to the nation's economy. That is a profound understatement.
According to a recent study in Investor's Business Daily, by 2040, 43.8 percent of government outlays will be public health-care benefits to the elderly. That figure does not include a prescription drug benefit for Medicare recipients. Add prescription drugs to the mix, and Medicare will consume half the nation's budget by the time today's workers retire.
Because politicians are loath to limit benefits, tax hikes will be necessary for Medicare to survive. Boston University economist Laurence Kotlikoff says a payroll tax hike of 4 percent is necessary to ensure Medicare's solvency.
I'm afraid that's a conservative estimate. The confiscatory payroll taxes needed to fund Medicare will soon provoke cries of outrage from liberals and conservatives alike.
As Alexander Tytler warned in the 18th century, "Democracy