Fixing Social Security and Medicare

Percentage Increases in Taxation or Cuts in Expenditure Required Today to Acheive Generational Balance in U.S. Fiscal Policy

1. Increase federal income taxes                 + 69%

2. Increase payroll taxes                                 + 95%

3. Cut federal purchases                                   – 100%

4. Cut Social Security and Medicare            – 56%


Source: Gokhale (Federal Reserve) and Smetters (U.S. Treasury)  2003

Quoted in: Colossus, by Niall Ferguson




One Response

  1. What’s the time frame, Tom? What is generational balance? We could wipe out debt by raising taxes 5 quadrillion percent and be balanced by this Fourth of July but American civilization as we know it would end. Or we could just stop spending ANY money from the government until the debt was gone.. same effect. This is the kind of simplistic statistical sound bite that can only survive in a world where ideology trumps practicality (and human nature).

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