Henry Aaron and Barry Bosworth describe why balancing the budget over the next six years is just a warm-up exercise for the challenge to come early in the 21st century when the baby boom generation retires. The nation cannot afford to wait until spending on the elderly begins to soar. To avoid a divisive intergenerational struggle in the future, public or private saving must be increased soon to augment the resource base from which the needs of future retirees can be met. Balancing the budget over the next six years and grappling with the scal demands of the baby boomers retirement would be more manageable if economic growth could be boosted significantly. Unfortunately, as Charles Schultze concludes, various proposals for accomplishing this incentive-oriented tax cuts, public sector investment, and deregulation would increase growth only a little.
Reality is inescapable.
When the election is over, the winners will face some very tough tradeoffs involving national priorities today and current versus future standards of living. The Publications Page has information on other periodicals and books published by the Brookings Institution.