America’s national debt, at a mind-blowing $7.5 trillion, is only a small corner of a gloomy financial shadow looming over the U.S. economy. A USA Today analysis found that “The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that start to come due in four years when baby boomers begin to retire. … The $53 trillion is what federal, state and local governments need immediately … to repay debts and honor future benefits promised under Medicare, Social Security and government pensions” (October 4).
In 2008, payments will come due on the debt with the first of the baby boomer generation—those born in 1946 who, at age 62, will qualify for early retirement benefits from Social Security. Then in 2011, these Americans will turn 65 and qualify for Medicare.
Federal Reserve Chairman Alan Greenspan told the House Budget Committee at the end of September, “As a nation, we may have already made promises to coming generations of retirees that we will be unable to fulfill” (ibid.).
The results of not taking action while baby boomers are still working could be “catastrophic,” according to some economists.
“The worst-case scenario is a sudden crisis—perhaps a major terrorist attack or a shutoff of oil from the Middle East—that triggers a loss of confidence by investors in the U.S. economy” (ibid.).
This very scenario has been put forth in the pages of this magazine before. America’s shaky economy will not hold up much longer. For more on this, see our May 2004 article “When the Debt Bomb Explodes” at www.theTrumpet.com.