As I stated in an earlier post David Walker heading up a billion dollar foundation set on fixing American government spending is the best news for Americans in years.
Today I saw a blog I hadn't seen before called Option Armageddon.
I would just like to make a couple of points on the post "A Great Society No Longer?"
"Medicare and Social Security are funded, not by trust funds, but by transfers from workers to retirees. Right now, there are more than enough workers to fund retiree benefits. But as the baby boomers age and as health care costs inflate, America's future obligations will increase substantially"
I disagree with this statement. Right now the government spends more than it takes in in taxes. Maybe technically it is being "funded" because of how they do the break down in how they take taxes, but with $9.3 trillion dollar deficit I would suggest that until such time as the US is paying all of its bills and paying debt back it simply isn't true.
I have no disagreement with the doom and gloom in the article. It is simply part of the reason I am so bearish on the market.
Moody's is already a dork in the ratings game. The US should be on negative watch for a downgrade in its credit rating today. There is simply no choice but to make changes and the rating ought to suggest that change must be made now.
I hope the following as well:
"Hopefully, the foundation's first proposal will be to reduce promised benefits. The alternative, raising taxes, makes no sense with the economy headed for a protracted recession. New taxes to pay growing entitlement benefits will only exacerbate the economy's problems by discouraging job growth and investment."
I don't know what the US's highest awards are, but that Pete Peterson guy should be nominated for it.
In Canada we have the Order of Canada and it has three different levels.