WAKE UP: Paul Volcker Says Time Is Running Out for U.S. to Tackle Coming Entitlement Crisis
May 19, 2010 at 6:57 PM
DailyBail in debt and deficits, entitlements, entitlements, federal debt, federal deficit, paul volcker, paul volcker

Tall Paul is referring to the $60 trillion in unfunded entitlement liabilities.  Can you spell generational war?  Because we know that these kids can.

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Former Federal Reserve Chairman Paul Volcker, a top outside adviser to President Barack Obama, said time is “growing short” for the U.S. to address problems ranging from its budget deficit to Social Security obligations.

“We better get started,” the 82-year-old former central banker said in a speech yesterday in Stanford, California. “Today’s concerns may soon become tomorrow’s existential crises.”

Volcker, speaking hours after the euro fell to a four-year low against the dollar, said Europe demonstrates for the U.S. the hazards of “uncontrolled borrowing.” The European currency slid below $1.22 for the first time since April 2006 as a ban by German authorities on certain bearish investments fueled concern the region’s sovereign debt woes will worsen.

“Little has happened to allay my concerns” raised five years ago that “dangerous and intractable” problems were rising in the U.S., said Volcker, chairman of the president’s Economic Recovery Advisory Board.

“Intractable not just because of the combination of complicated issues, but because there seemed to be so little willingness or capacity to do much about it,” he said during a dinner at the Stanford Institute for Economic Policy Research.

Volcker said in an interview yesterday it will take “years” to restore economic balance in Europe following the debt crisis. European Central Bank President Jean-Claude Trichet has been “particularly effective in maintaining the credibility of the euro,” he told Tom Keene on Bloomberg Radio.

Sense of Urgency

“In the United States, we don’t seem to me to share the same sense of urgency” as countries such as Ireland, Volcker said in his speech. “The time we have is growing short” and “there are serious questions, most immediately about the sustainability of our commitment to growing entitlement programs.”

The Obama administration is forecasting a record annual budget deficit of $1.6 trillion. The shortfall is projected to be $10 trillion over the next 10 years, with interest payments on the debt forecast to quadruple to more than $900 billion annually.

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Continue reading at Bloomberg  >>

 

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