Hang On-- We Are Going for a Ride!
Our nation's debt is the highest it's been since World War II and it is projected to grow exponentially over the next ten years. Our government exceeded its budget by $600 billion in 2016 and this annual deficit level is also projected to grow.
Without significant changes in either revenue or spending (or both), the trajectory of financial imbalance is daunting and unsustainable. Actuaries, Trustees for Medicare and Social Security, and the Congressional Budget Office are all saying something must be done beginning 2018.
At the heart of this problem are the three largest publicly funded domestic programs, all of which impact the world of long-term care, the senior citizens of our nation, and our local economies. These are Social Security, Medicare, and Medicaid-- "The Domestic Trio." At a conference for senior service providers, I presented on the financial status of these programs at both the national and Washington State level, and reviewed federal efforts (including health care reforms) to circumvent a pending crisis.
THE GIST: The Domestic Trio makes-up 52% of our nation's $3.6 trillion program expenditures, but accounts for about 62% of the increase in outlays over the next 10 years. The total projected increase from today's expenditures for this period is $2.7 trillion. Simultaneously, the revenues for these programs are projected to remain flat or even decrease from the current levels. Why? There are 10,000 baby boomers turning age 65 every day between now and 2030. As these long-time employees retire, they leave the workforce. So, does the seniority level of payroll taxes they've been paying into the system. In addition, income taxes are impacted as we have a large group of senior employees with substantial work history and corresponding levels of pay converting to more modest levels of retirement income (Social Security and maybe some tax deferred retirement/pension). Here is our current financial recipe:
Revenue: The ratio of workers paying taxes that fund the Domestic Trio is decreasing as the boomer retire; and simultaneously,
Expenditures: The number of individuals receiving benefits from Social Security and Medicare is increasing exponentially as boomers age into these programs.
Why is this a big deal and why should we care? In this presentation, I provide examples of how much the Domestic Trio impacts our seniors and our economy at all levels (national, state, and local). We also look at government health care reform efforts that are underway for a preliminary idea of how much these are expected to reduce the annual deficit. The reality is lawmakers must make other changes to rein-in our national finances and this will likely impact all of us! To learn more, click here to view the slide deck .
Did you miss it? Check out a recorded version by clicking on the video below:
Even if you don't like looking at statistics, charts, or fiscal information, I encourage you to give it a once over. The recorded presentation is a little over one hour in length and packed with information that is relevant to EVERYBODY. You can skip through the boring stuff (I won't be offended) and it gives you a great excuse to enjoy a nice bowl of piping hot popcorn and a bag of Skittles! So come on! Pull up a chair!
Finally, I must express my gratitude for such a wonderful and enthusiastic audience at the conference (most of whom were boomers). While the topic was heavy, we enjoyed plenty of interesting dialogue and a few light-hearted moments. It is people like you who make the world a better place for so many, including me! Thank you!
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