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Those unfunded liabilities will add up to substantial real dollars as more and more retirees need to be supported by the payroll taxes of fewer and fewer workers. Ignoring that now will only make the medicine that much tougher to take later on. But hey, that will be the problem of some other president and congress.

Michael Boskin, Stanford economist, sees rosy times ahead for tax collections. Why? The ordinary income tax boomers will pay on their deferred account withdrawls. Article about it in Barrons:,,SB105604255263459500,00.html?mod=b_this_weeks_magazine_main (pay site)


<< the federal government could effectively wipe out the existing national debt by securitizing the future flow of revenues from tax on tax-deferred retirement accounts. Instruments like mortgage-backed securities or state tobacco-settlement bonds, could replace the existing bonds carrying the full faith and credit of the U.S. With the right securities offering, the government could relieve itself of the burden of its interest payments...

Moreover, the $3 trillion is just the current value of deferred taxes; the future of tax-deferred saving may be much bigger, big enough to solve big problems. Boskin calculates that the present value of future taxes to be paid on distributions from tax-deferred savings accounts is likely to amount to $5 trillion to $10 trillion, adjusted for inflation and expressed in 2003 dollars...

The lesser amount is about equal to the actuarial deficit in Social Security; $10 trillion would cover the actuarial deficits in both Social Security and Medicare Hospital Insurance.

"Withdrawals from tax-deferred accounts will increase so dramatically relative to wages and salaries in coming decades that government forecasts of projected deficits are seriously overstated," >>

Mr. Boskin will soon have his findings published by the National Bureau of Economic Research. That's also a pay site but you can read abstracts of their articles for free at .

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