Federal Reserve Chairman Ben S. Bernanke warned Congress yesterday of a “fiscal crisis” if it doesn’t curb the projected growth of federal spending on retirement and health-care programs.
Echoing similar warnings by his predecessor, Alan Greenspan, Bernanke told the Senate Budget Committee that “the effects on the U.S. economy would be severe” if the government’s debt were allowed to balloon as forecast.
Bernanke noted that the federal deficit has declined in the past two years but said that was “the calm before the storm” of skyrocketing expenses for an aging population. He cited Congressional Budget Office projections that spending on the big entitlement programs—Social Security, Medicare and Medicaid—will equal 15 percent of the nation’s gross domestic product by 2030, double last year’s level.
He also decried “burdensome” tax rules and said Congress might raise tax receipts by making them simpler.
Our entitlement program growth is unsustainable. We can either fix the problem now with a moderate amount of pain or follow the Democrats in Congress and let this problem assume crisis proportions. The solution to the problem isn’t more government tax and spending. The solution to the problem is expecting those that are able to take care of themselves to do so.