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The Coming Generational Storm: What You Need to Know about America's Economic Future

04/28/2004 6:00 PM Wong Auditorium
Laurence J. Kotlikoff, Professor of Economics Boston University

Description: A word of advice to baby boomers: be very kind to your children. They will quite likely be paying a steep price for your happy golden years. Laurence Kotlikoff says the future is dark indeed for the Social Security system. The fiscal gap between what the federal government expects to take in and what it pays out is so big that the Treasury Department had to censor the number in the federal budget. Kotlikoff's current figure: $51 trillion. Today's payouts to retirees for Social Security and Medicare/Medicaid have already broken the bank, and future expenditures will take us right into an economic catastrophe, says Kotlikoff. Why? Because today there are 33 million people over 65 receiving an average annual Social Security payment of $23k -- but in four years there will be 77 million seniors collecting. The equation involves demographics and money: a predominantly old population with extended lifespan requires benefits that far exceed the capacity of young workers to pay for them. And please don't mention the spiraling costs of health care. Kotlikoff blasts the Bush and Clinton administrations for negligence and cover-ups, and says he doesn't "see a way out of our fiscal system melting down short of doing something immediately." His starting point for a bailout: "Pay off what you owe with a federal retail sales tax."

About the Speaker(s): Laurence J. Kotlikoff is a Research Associate of the National Bureau of Economic Research, a Fellow of the Econometric Society, and President of Economic Security Planning, Inc., a company specializing in financial planning software. His previous books include Essays on Saving, Bequests, Altruism, and Life-Cycle Planning; Macroeconomics: An Integrated Approach; Generational Accounting; and What Determines Saving. Kotlikoff received his B.A. in Economics from the University of Pennsylvania in 1973 and his Ph.D. in Economics from Harvard University in 1977. From 1977 through 1983 he served on the faculties of economics of the University of California, Los Angeles and Yale University. In 1981-82, Kotlikoff was a Senior Economist with the President's Council of Economic Advisers. He has served as a consultant to the International Monetary Fund, and the World Bank, among others. He has provided expert testimony on numerous occasions to committees of Congress including the Senate Finance Committee, the House Ways and Means Committee, and the Joint Economic Committee.

Host(s): Office of the Provost, MIT Libraries

Tape #: T18613

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MIT World — special events and lectures

MIT World — special events and lectures

Category: Events | Updated over 2 years ago

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