Well, the way I see it we're facing three crises that will destroy our current economic structure:
1. Healthcare. Beginning 2011, the baby boomers start Medicare. By 2015, estimates are our national debt could triple at current expenditure rates.
2. Social Security - Ultimate ponzi scheme. Again, starting in 2011, there are more payees than payers. To maintain current benefits through 2020, tax rate on the average citizen goes to 60 percent on SS alone.
3. Military modernization - No one is talking about this. The Air Force is slowly dying. Potential adversaries are enjoying unprecedented advances in armor and artillery platforms. A scheduled modernization program was put indefinitely on hold in place of the war on terror. Per capita (GDP) spending on the American military is at an all-time low. Cost for full modernization including the Reserve and National Guard runs in the low trillions.
What created this mess?
Already, I see that a particular candidate wants to fund a national healthcare system with savings made by ending the war in Iraq. If our current war is grossly increasing the national debt, what happens when we simply move that money over to healthcare? Already the military (specifically the Army) is broken. We're wearing our Soldiers and tanks out. All experts agree that to meet the threat of terror we need a military back to the pre-drawdown/Desert Storm size. Growing that could take trillions. Oh, that still doesn't address the massive shortages in the National Guard and Reserves. Damn, I forgot about the Air Force. They're flying around platforms primarily built in the 70's and 80's. This is a service that absolutely relies on technology overmatch. Estimated modernization of the Air Force exceeds the cost of rebuilding the Army.
It amazes me that no one in either campaign is talking about Social Security. Next to Medicare/national health plan issues, Social Security has the biggest potential to bankrupt the American economy. It funny we send folks to prison for running Ponzi schemes, but that is exactly what the government does. Remember those budget surpluses of the 1990's? That wasn't actually cash. In fact, they were actually forecasted Social Security surpluses that resulted from the balanced budgets implemented by Newt Gingrich.
Back then there were still more workers than retirees, mainly because the baby boomers were at the peak of their lifetime's earning potential. The nasty secret no politician likes say was that they spent it as they collected it. They took the forecasted surpluses and spent them at the same rate as the Reagans. Politicians built massive political clout for the resulting surpluses that went in as Social Security contributions and went out mostly in the form of massive pork expenditures. Oh, the national debt continued to increase during this time.
In 2001, the war on terror kicked off, we realized that we under spent our military. We began to pay the bill for the 'peace dividend' earned from drawing down the military. Spending never changed and the new war rocketed deficit-spending. Military spending, 6% of our GDP at the end of Desert Storm, was at a paltry 3%. Currently it's risen back to 4.5%, but that goes more to cost of war than to modernization. During this period, Medicare and SS expenditure also increased, oh, and congressional pork never went away.
How do we fix it?
No one individual can take the blame. A lot of folks like to blame our current President, but my friends; this is a train wreck coming since the days of FDR (a switch-in-time-saves-nine ring a bell?). My generation is unfortunately stuck with the task of cleaning it up. Unfortunately, we do not even own the majority of the voting block.
We want to fix the situation, but cutting benefits for us means cutting benefits for all. Again, my generation doesn’t even hold a voting majority. Go as a 65-year old retiree how he votes if a particular candidate mentions “benefit cuts.” “Old” and “stubborn” go together like “beer” and “block leave.”
I didn't mention immigration because I don't believe it's relevant to the solution. Sure, it taxes our Medicare system, but compared to the baby boomer problem, it is minor league.
No one wants to say "tax increase" or "benefit decrease" but the reality is that the answer lies somewhere between "socialized medicine" and "decreased retirement benefits."
The problem is we are all too selfish to admit that the solution lies with sacrifice, a lot of sacrifice. Let's face it, we, Americans that is, are selfish. I understand sacrifice, my family understands sacrifice, the average Joe-Six Pack on the street has no idea what the word means. Our two political parties are more concerned with individual political victories than changing things for the better.
I don't know the answers; I just figure we're screwed.