Fed chairman warns of potential fiscal disaster for United States

News Type: Event — Seeded on Thu Jan 18, 2007 6:31 PM EST

Article Source: International Herald Tribune

business, economics, federal-reserve, medicare, social-security, ben-bernanke

Senate is told deficits are looming threat.

WASHINGTON: Warning against complacency over the U.S. federal deficit, Ben Bernanke, the Federal Reserve chairman, said Thursday that recent positive trends on the budget were a "calm before the storm" masking a long- term economic threat posed by looming deficits in Social Security and Medicare.

"The longer we wait, the more severe, the more draconian, the more difficult the adjustment is going to be," Bernanke said in response to a question at a Senate hearing about when lawmakers should tackle the growth of spending in the twin retirement systems. "I think the right time to start is about 10 years ago."

In substance, Bernanke's comments were consistent with his past warnings, and those of his predecessor, Alan Greenspan, about the cost of the baby boom generation retiring. But his tone appeared to be more urgent, and the timing seemed aimed at the arrival of a new Democratic-led Congress that is just now setting its priorities.

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Michael Sautter's Column, All of Newsvine
Groups: Political Analysis
Regions: United States , Washington DC

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{"commentId":482790,"authorDomain":"michaelsautter"}

Michael Sautter

"Deficits still matter."
- Alan Greenspan

Inflation is creeping up, the result of all the money ~~wasted~~ spent on the war in Iraq?

{"commentId":482790,"threadId":"69190","contentId":"527141","authorDomain":"michaelsautter"}

4 votes

#1 - Thu Jan 18, 2007 7:33 PM EST

{"commentId":483210,"authorDomain":"Henryvii"}

Henry VII

Wasted on the Iraq war.
Wasted in Afghanistan.
Wasted on Social security
On welfare.
On medicare.

It's not wonder we're in trouble.

{"commentId":483210,"threadId":"69190","contentId":"527141","authorDomain":"Henryvii"}

2 votes

#1.1 - Fri Jan 19, 2007 12:41 AM EST

{"commentId":482989,"authorDomain":"PamelaDrew"}

Pamela Drew

I seeded a video lecture by Catherine Austin Fitts with survival tips for ethical investors navigating the falling dollar.

{"commentId":482989,"threadId":"69190","contentId":"527141","authorDomain":"PamelaDrew"}

3 votes

#2 - Thu Jan 18, 2007 10:05 PM EST

{"commentId":483246,"authorDomain":"headinthegame"}

headinthegame

we are freakin' doomed. we'll never be able to get of this fiscal mess without hyperinflation

{"commentId":483246,"threadId":"69190","contentId":"527141","authorDomain":"headinthegame"}

1 vote

#3 - Fri Jan 19, 2007 1:17 AM EST

{"commentId":483825,"authorDomain":"Byronsnake"}

Byronsnake

I don't know if I'll ever be able to afford to retire.

{"commentId":483825,"threadId":"69190","contentId":"527141","authorDomain":"Byronsnake"}

1 vote

#4 - Fri Jan 19, 2007 12:08 PM EST

{"commentId":484225,"authorDomain":"PHATjoe"}

PHAT Joe

Simple solution:

- First, itemize your assets: do you own your house, your car, your furniture, your clothing? If not, pay off those debts as fast as possible by sacrificing on luxuries and consume only the essentials until you own those 4 import commodities. Once you own these essentials they cannot be repossessed due to late payments if inflation cuts your bottom line.

- Second, once you are in the black with your assets start saving: mix your savings; cash, low risk stocks, bonds. Saving cash is obviously the safest way to do it, but mixing may be a good strategy in case banks are compromised for some reason; having 3 points of failure is always better than one.

Do these things in that order and you should be good providing your job doesn't get cut, off shored, or automated.

Living a sustainable lifestyle might be boring but if your are nervous about the future than it is the only way to be confident in your long term financial stability. If you are older right now that you are certainly among the lucky, us younger folk are going to have to make some big changes in the USA or we will have a tough time in the future.

{"commentId":484225,"threadId":"69190","contentId":"527141","authorDomain":"PHATjoe"}

1 vote

#5 - Fri Jan 19, 2007 3:51 PM EST

{"commentId":484343,"authorDomain":"directloanpro"}

jonmrog

We have a bad habit of ignoring issues like these and "sweeping them under the rug." It reminds me of how we're neglecting to spend more on R&D for alternative energy sources. These problems won't just disappear by themselves.

{"commentId":484343,"threadId":"69190","contentId":"527141","authorDomain":"directloanpro"}

2 votes

#6 - Fri Jan 19, 2007 5:02 PM EST

{"canLink":false,"threadId":"69190","isPrivate":false}

MICHAEL SAUTTER

Backyard

Fed chairman warns of potential fiscal disaster for United States

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