When Congress gets back to business this week, top of the agenda will be the deficit. But how it unfolds, not only this year, but leading into 2012, will be previewed by President Obama's State of The Union
Address next week.
Christina Romer, chairwoman of President Obama's Council of Economic Advisors his first 2 years, now professor at Berkeley, writes in today's New York Times that she hopes for "pages and pages of concrete proposals...for a deficit reduction plan... the President will fight for". She wants “more than two paragraphs lamenting the problem and vowing to fix it". And she outlines a series of specific policies -- on taxes, energy, military, entitlements and others.
What’s missing in Romer’s op-ed piece is a policy on America’s aging population and its central role in long-term structural spending. The 77 million baby boomers turning 65 the next 2 decades and living longer will be transforming social and economic life and consuming the lion’s share of government spending. Equally consequential, the percentage of traditional working age taxpayers under 60 are likely to decrease. If we only get short term spending cuts the deficit will return with a vengeance. Dramatically highlighting the aging impact, a recent study on global aging preparedness has America’s net public debt as a percentage of GDP growing from today’s tough but manageable 65 to a whopping 179 in three decades.
The President could lay out these demographic facts in the deficit section of his Address. Solving today’s Medicare or Social Security challenges are technical and marginal compared to the more profound changes that an aging population presents.
The president could call for action on strategic policy directions: reducing the spend on the next decades' age-related diseases; incentives for Americans living longer and healthier to work differently and longer; innovative financial instruments to replace the obsolete pension and social security programs of a by-gone era; education for adult Americans who will need the ongoing learning support that accompanies a 50 year working life in this era of longevity.
Mr. President, give us the vision and strategy built around the countries’ new demographic realities of our aging population.
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