In the November 10, 2008 Newsweek, economist Robert Samuelson describes the economic shift with the phrase “affluent deprivation”. Income gains will be modest and largely siphoned by increases in taxes, energy costs, and health care spending.
Growth which was largely taken for granted will be pressured. Thoughts on how to divide the pie may take precedence on how to grow the pie.
Social Security, Medicaid and Medicare are now 2/5 of out bloated budget.
The strain on these commitments with a low birthrate and an aging population is enormous and the solutions are almost inevitable, regardless of party philosophy.
I have contended for years that the social security retirement age will be raised, and that these social benefits will be means tested. If you are fortunate enough to still have a large 401k balance when you retire, your social security will adjust downward.
The affluent elderly will have to pay more for medical procedures that the lower income.
It does not matter if you call this a tax increase on the rich, or a betrayal of the government trust, the fact is that our government has been making a promise that they can not keep. We can not raise taxes enough to cover the bill and we can not likely grow out of the predicament either. These steps will be inevitable.
Both parties have refused to address this for decades