It has taken Barak Obama less than 4 months as US President to cast an ugly pall over the American economic future of generations of children. Obama's record-breaking budget-busting spending spree has shackled future generations of American taxpayers with the ball and chain, with no end in sight.
Not since the second world war have so many governments borrowed so much so quickly or, collectively, been so heavily in hock. And today’s debt surge, unlike the wartime one, will not be temporary. Even after the recession ends few rich countries will be running budgets tight enough to stop their debt from rising further. Worse, today’s borrowing binge is taking place just before a slow-motion budget-bust caused by the pension and health-care costs of a greying population. By 2050 a third of the rich world’s population will be over 60. The demographic bill is likely to be ten times bigger than the fiscal cost of the financial crisis. _EconomistThat's what makes Obama's profligacy so much worse than anyone could have imagined: the productive population of the US is shrinking at the very time when it is being saddled with incalculable debt.
....nothing sends a stronger signal than taking difficult decisions today. One priority is to raise the retirement age, which would boost tax revenues (as people work longer) and cut future pension costs. Many rich countries are already doing this, but they need to go further and faster. Another huge target is health care.....A tall order? Worse than that. An impossible order. Tackling social security, Medicare, out of control public sector pensions, etc. is more than the weak-spined politicians of the Obama era would care to take on.
All this is a tall order. Politicians have failed to control the costs of ageing populations for years. Paradoxically, the financial bust, by adding so much debt, may boost the chances of a breakthrough. If not, another financial catastrophe looms.
The productive segment of society is growing old and retiring. New generations will lack the skills, the will -- and in some cases the aptitude -- to pick up the mantle of responsibility and productivity. In other words, there will be fewer and fewer skilled and productive workers to pull an ever-growing load.
What is Barak Obama's answer to the problems he is making worse every day? We don't really know, but since every day in Obama World is a campaign for something, we should be hearing from the Obama campaign on this topic real soon.
Meanwhile, in the background, the sound of printing presses rolls on into the long economic night.