A frightening and uncanny similarity

Please read the extract below from an article by Laurence Kotlifkoff, an economics professor of Boston University. ‘We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare and Medicaid that, on average, exceed per capita GDP. The annual costs of these entitlements will total about US$4 trillion in today’s money. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year. This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck. Mr Herb Stein, chairman of the Council of economic Advisers under US President Richard Nixon, coined an oft repeated phrase: “Something that can’t go on, will stop.” True enough, Uncle Sam’s Ponzi scheme will stop. But it will stop too late….’ Just think of our CPF scheme, and also the public housing scheme. The ever increasing price of HDB flats, direct from HDB or resale, is like taking from the young to pay the oldies. And of course, promising the young that the housing bubble will go on expanding, never ending, and they will reap their millions tomorrow. How long can this go on? Or as Stein above said, ‘Something that can’t go on, will stop?’