Centerfield

Just one more reason why America needs a fiscal conservative in the White House. Clearly we're not going to get one this time around.

Even those harshly critical of Greenspan's comments have to know he is right. They simple see no political gain in admitting it.

Someone of stature has to publicly state what we all know and do not want to admit, that no matter what, the USA cannot possibly provide the promised benefits to baby boomers.

To some extent we are fortunate that Old Europe will suffer this problem before we do and maybe we will be able to learn from their misery in time.

An author of an excellent essay in a book that I edited noted that the Social Security dilemma could be addressed, in part, by providing clever incentives to encourage elderly employees to stay in the workforce longer. In general, making maximal use of the special skills set and experience that older workers will tend to possess. I think that the Social Security challenge is soluble if we make baby steps; help encourage older workers to remain employed (as Japan has done so well), maybe raise the retirement age by a year (far in the future, so it doesn't hit anyone too close to retirement). The more gradually we slow down the speeding car, the less of a shock it'll be in contrast to the slamming on the brakes when the fiscal crisis hits.

Yet politicians balk at making even these tiny moves. The problem is pretty obvious: Otto von Bismarck designed Social Security and the retirement age (65) in early-industrial Germany as a way of paying out pensions and supporting the small number of elderly families who'd be stuck in a bind with the shift away from agriculture. Actuarial charts were radically different in the 1880s and this was feasible. But principles and policies always have to be revised and adjusted as empirical circumstances change and alter previous assumptions. Sometimes I fret that our political system, as currently designed and implemented, just isn't capable of this.

IMHO the Social Security and entitlements crisis, far more than some foreign war or terrorist chemical weapons attack, has the potential to ruin the United States as a great power the way the World Wars ruined the European nations as great powers. If that happens 50 years from now, we'll look back ruefully on the words of Greenspan and similar sages and wonder why our predecessors were so blockheaded as to stick their heads in the sand when a storm was so obviously about to strike.