Flying under the radar this past week was a new government report that forecasts that the national debt will double over the next decade. The White House has projected a cumulative $9 trillion deficit between 2010 and 2019, while the Congressional Budget Office estimates a more optimistic $7.1 trillion, based upon the expiration of Bush tax cuts. What this means is that Washington's out-of-control spending likely will turn the nation's already-staggering $11 trillion in debt into an astronomical $20 trillion.
But there are at least two ginormous expenses that are excluded in these projections. First, the projections from both the White House and CBO incorporate their belief that the deficit will decline quickly over the next three years, as they assume fewer bailouts are needed and the economy will grow rapidly. But isn't there also the real possibility that the economy will not recover as quickly as they hope? Every additional bailout or stimulus (large or small) and every margin of error in their three-year prospective climb out of the economic pit will inflate our nation's debt balloon even more.
The second expense is far less speculative -- and it has to do with about a fourth of America. The 72 million baby boomers (people born in America from 1946 to 1964), members of the largest generation America has produced, are going into retirement over the next two decades and will face the golden years of declining health and rising medical costs. Under current law, if the government were to add the projected baby boomer costs of Medicare and Social Security to its debt tab, it would send deficit projections into the abyss.
Here's the primary problem. Medicare is bankrupt. Medicaid is bankrupt. And Social Security is bankrupt. Though boomers have paid into these programs via their taxes for decades, there are not enough benefits to offer them now -- and even less in the future. The problem is compounded when one understands that the number of people in the United States who are 65 or older is expected to double by 2030, and so is the amount expected to fund their retirement and health care in their twilight years, which relatively few are prepared to handle themselves.
So what is the U.S. government to do, especially when it already is projected to have $20 trillion worth of debt in 2019? (Let alone what it will be in 2030!)