Foreseeing a Fiscal Crisis

Syndicated columnist and Providence Journal writer Froma Harrop recently weighed in on the fiscal obstacles ahead of Ben Bernanke, President Bush's nominee for the chairmanship of the Federal Reserve, echoing sentiments displayed by Laurence Kotlikoff and Scott Burns in their book The Coming Generational Storm.

America should prepare for a big fat war between the generations. It's going to be ugly. On one side is the baby-boom generation, which retires and claims a ton of government benefits. On the other are younger workers, forced to fund those benefits plus pay the bills their elders left them.

When the war comes, the Federal Reserve chairman will have to be general. That person will likely be Bush nominee Ben Bernanke. The question is, for which side will he fight?

[snip]

The political reality is that the baby-boom generation expects to see the nice government handouts its retired parents enjoyed, and then some. Younger workers expect to be taxed at today's lower rates. One group will be very disappointed — or perhaps both groups — because there is no way the Candyland economics of today can go on.

The whole alarming future is nicely mapped out in a book, The Coming Generational Storm, by Boston University economist Laurence Kotlikoff and Scott Burns, a personal-finance columnist at The Dallas Morning News.

Kotlikoff and Burns clearly sympathize with younger Americans and Americans not yet born, who will be paying both our bills and their own. "Does it feel better," the authors write, "if those unknown victims of our rapacity are someone else's children and the children of those children and the children of those children of those children?"

The full column appeared in the Seattle Times on November 1 and is available here.