"In truth, rising life expectancy and growing health-care costs mean that today's elderly have contributed only a fraction of what they expect to receive from Social Security and Medicare. The government made a mistake in the past by not raising taxes to finance these programs or reducing the benefits that they promised. Unless the growth of these entitlement programs is curbed now, today's young will pay dearly for that mistake, in the form of higher taxes now and lower benefits when they are old.
But the elderly are politically active and powerful. Not only do many defend their entitlements strongly; some oppose growth in public spending in other areas for fear that it will weaken the government's ability to pay for the benefits that they believe they are owed.
These then are the roots of America fiscal impasse, which has produced passionate constituencies viscerally opposed to compromise. Any political deal significantly before the debt-ceiling deadline would have exposed politicians to charges of betrayal from their constituents."
- Raghuram Rajan
But the elderly are politically active and powerful. Not only do many defend their entitlements strongly; some oppose growth in public spending in other areas for fear that it will weaken the government's ability to pay for the benefits that they believe they are owed.
These then are the roots of America fiscal impasse, which has produced passionate constituencies viscerally opposed to compromise. Any political deal significantly before the debt-ceiling deadline would have exposed politicians to charges of betrayal from their constituents."
- Raghuram Rajan
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