Wednesday, April 7, 2010
Bernanke Says U.S. Must Choose a Fiscal Path
Ben Bernanke said that since America's population is aging, we will be posed with fiscal problems and that we need to start preparing now. He does not expect the government to raise taxes or cut spending anytime soon. However he did say that in order to not go into huge deficit spending, in the future higher taxes might have to happen, or, a different approach to Social Security and Medicare. He also talked about how more than 40% of the unemployed have been so for six months or longer and he said: “I am particularly concerned about that statistic, because long spells of unemployment erode skills and lower the longer-term income and employment prospects of these workers.”
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3 comments:
Bernanke is right that this 40% is highly significant,long spells of unemployment can greatly affect workers. The longer they stay out of work the harder it will become to get back in to it.
The last comment from Bernake about how "...unemployment erodes skills and lowers the longer-term income and employment prospects of these workers" does not mix well with raising taxes. After these 40% retire, they will be basically receiving Social security and Medicare that everyone else has supplied for them which isn't fair.
Bernanke makes a good point here but the question also here is that to what extent will taxes be raised in the future to help solve this problem. And also how far is the future in this case.
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