Social Security, Medicare are Disaster for Younger Generation, Economist Says

By Keriann Hopkins | August 5, 2008 | 6:44 PM EDT

Washington ( – The future costs of maintaining Social Security and Medicare will be a “disaster” for younger generations, Dr. Walter Williams, the conservative economist and syndicated columnist, told Tuesday.
“Around 2030, according to some estimates, the Social Security system is going to plain collapse, unless we make the Social Security tax 30 percent, and that wouldn’t fly politically,” Williams said.
“So it’s not my problem. It’s your problem,” he said, as students gathered around him following his talk at the 30th annual Young America’s Foundation National Conservative Student Conference in Washington, D.C.
A June report by the Government Accountability Office (GAO) said Social Security’s “unfunded liabilities,” or future planned costs for which funding has not been set aside by Congress, will exceed $7 trillion in the next 75 years.
The report said that for Social Security and Medicare combined, the government would “need approximately $41 trillion invested today to deliver on the currently promised benefits not covered by earmarked revenues for the next 75 years.”
Williams, the John M. Olin Distinguished Professor of Economics at George Mason University, told the GAO’s estimate is low.
“A lot of people say it’s between $60 and 70 trillion [dollars],” he said. “And the unfunded liability means that in order to pay for all of the problems, Congress needs to put in the bank $60 trillion, and keep in mind our GDP (gross domestic product) is only 15 or 14 [trillion dollars].”
In his speech, Williams criticized the Social Security system, as well as other government programs that he said infringed on individuals’ personal freedoms.
The United States is not a totalitarian country, Williams said, but “the ultimate end to this concept is totalitarianism.”
Ironically, he blamed part of the threat posed to free enterprise on the success of capitalism itself.
“Capitalism has been so successful in eliminating the traditional problems of mankind – that is, disease, pestilence, famine, hunger and gross poverty – that all other human problems appear to us to be at once unsuitable and unbearable,” Williams said.
Government has turned to achieving ideals like equality of income and affordable housing and medical care at the expense of personal freedom, he argued.
“As a result of this widespread control by the government in an effort to achieve these so-called ‘higher objectives,’ we are increasingly being subordinated to the point where ... personal liberties are but secondary or tertiary matters,” he said.
Williams cautioned that we need to remember government has no resources of its own. There is “no tooth fairy or Santa Claus” to give government the money, he said.
“The only way that government can give one American citizen one dollar, is to first – through intimidation, threat and coercion – confiscate that one dollar from another American,” he said.