Will America Grow up Before It Grows Old?by Peter G. Peterson
The facts are plain: Social Security is headed for massive, unsustainable deficits in the next century. Politicians talk of a Social security "trust fund" but there are no hard assets in itonly government bonds. The reality is that Social Security is really a "pay as you go" system, with benefits to current retirees paid not out any saved trust funds but out of taxes on the payroll of today;s workforce. But what will happen when these employees retire; when, in less than fifteen years, the 76 million members of the baby boom generation the largest in our history stop paying in and start taking money out? And what can we as individuals and as citizens do now to prevent these catastrophic deficits.
The crises towards which we are careening (by 2025, 1 American in 5 will be 65 or older and it will take an already overloaded 1.6 working Americans to support each retired person) will not only be felt personally by the many millions stranded with no savings and without benefits, but will shiver the country's economy as a whole as well as the world financial system.
With courage, clarity and incontrovertible evidence, Peterson spells out this huge if politically unmentionable problem more clearly than ever before and tells us what we must do now for our personal survival and that of our children.
According to recent polls, more young Americans believe in UFOs than think they will ever receive a Social Security check. Yet most Baby Boomers, as they approach retirement age, believe they will continue to live their present lifestyle in retirement without a fraction of the personal savings or pensions necessary to pay for thefuture they expect.
This aging population double today's load will depend on as few as 1.6 working Americans to support each retired person. Who will support this nation of Floridas?
In this short, powerful book, Peter G. Peterson, one of American's top investment bankers and a leading critic of our entitlement policy, spells out in the clearest possible language, with unmistakable numbers and easy-to-read charts, the disaster that lies ahead if we continue to ignore our low saving rate, our ballooning federal deficits, and our enormous unfunded and unsustainable commitments to retirees. Peterson reveals what politicians are afraid to admit: trillions of dollars of promised benefits for which no funds have been provided.
Shattering the myths surrounding this subject with hard facts and eye-opening views of the future, Peterson gives the most comprehensive and candid plan for a gradual, humane, fair, and realistic answer to the greatest challenge of the next century: transforming our political, economic, cultural, and social assumptions to adapt to the realities of the graying of America.
A former Commerce secretary turned investment banker and a member of the Bipartisan Commission on Entitlement and Tax Reform, Peterson has strong feelings about his subject, as well as a firm grasp on it. He demonstrates that insufficient resources exist to cover the retirement of Boomers (who will begin leaving the workforce in about 15 years). He goes on to show that, on any rational bookkeeping basis, Medicare and Social Security are "massively insolvent." Doubling back, the author reviews just how the US became a thrift-deficient, consumption-minded, deficit- burdened, and entitlement-oriented society in which the relatively affluent collect appreciably more federal benefits than the genuinely impoverished. Having blamed the electorate and Congress in approximately equal measure for this parlous state, and arguing that in economic terms the troubles created by the graying of America could dwarf all other serious problems, Peterson offers a multipoint reform program whose top priority would be balancing the federal budget by 2002. His list of obligatory changes includes a thorough makeover of entitlements, complete with a schedule of phased-in sacrifices to be shared by all recipients of government largesse. Also covered are such possibilities as reducing benefits for the affluent (i.e., households with annual incomes exceeding $40,000); advancing the eligibility age for FICA payouts; establishing a system of personal, privately managed, and portable pension plans funded in part with dollars now earmarked for Social Security; and a tax policy that would impose levies on consumption rather than income.
A persuasively stated case for addressing a consequential issue that's overdue for debate and action.
- Random House Publishing Group
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- Product dimensions:
- 5.88(w) x 8.58(h) x 0.81(d)
Meet the Author
Peter G. Peterson is Chairman of The Blackstone Group, a private investment bank, Director of the Federal Reserve Bank of New York, Chairman of the Council on Foreign Relations, Chairman of the Institute for International Economics, Director of the National Bureau of Economic Research, and Founding President of the Concord Coalition, a bi-partisan citizen group dedicated to building a constituency for fiscal responsibility. A former Secretary of Commerce under President Nixon, Mr. Peterson has advised four presidents. Most recently, he served on President Clinton's Bipartisan Commission on Entitlement and Tax Reform.
Chairman and CEO of Lehman Brothers from 1973 to 1984, he is the author of Facing Up: How to Rescue the Economy from Crushing Debt, which the New York Times called "a benchmark against which the debate over lowering the federal budget deficit will be measured for years to come." He has received countless awards, including the National Magazine Award for the Best Public Interest Article of the Year. His thought-provoking and trailblazing articles on the future of Social Security, Medicare, and the U.S. Economy have appeared in The Atlantic Monthly, The New York Review of Books, The New York Times Magazine, and many other publications, and he is a frequent guest on The News Hour with Jim Lehrer, Charlie Rose, and other major television talk shows.
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