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Horror Show

If you want to get real scared, check out these videos and presentations on the growing federal deficit.

I first heard about the Fiscal Wakeup Tour on NPR.  There is a traveling group of economists from across the ideological spectrum who agree that the federal deficit is going to mushroom out of control over the next 40+ years.  They are doing a series of talks about what is causing this.  The only solutions are some combination of tax increases and spending cuts.  The amount of each depends on your political point of view.  All of them agree that there is no 'free lunch' solution like growing out of the deficits.

The deficits are based on the aging population and the growth of medical costs vs. GDP growth.  These issues compound to make Social Security, Medicare, and Medicaid grow to become huge unless they are structurally changed.  The main goal of these talks is to educate voters so that they can insist that Presidential candidates address this in the current election cycle.

For a short form of the problem, you can check out the Fiscal Wakeup Tour web site.  There you can check out some of the videos and presentations from one tour stop at Georgia State.  My favorite talk is this one from David Walker (slides, video), Comptroller General of the United States.  Here is one slide from his presentation that shows that the government has committed $50 TRILLION in long-term expenditures, which is about equal to the total household net worth of the country.  In other words, as individuals, we're technically broke.

No matter where you are on the political spectrum, you can't put your head in the sand on this one.  It's clear to me that we have to come up with a way to cut the growth of medical costs, which is the overall driver in this problem.  That will probably mean that care will have to be managed and that expensive new treatments may not be available to everyone without some level of control.  That may be tough to swallow, but having taxes grow to unprecedented levels doesn't sound very palatable, either.

Think about this problem when you are deciding who to back for President in 2008.

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