US - Presidential candidate John McCain's adviser on pensions has warned the US faces a potentially catastrophic economic scenario unless workers can be encouraged to save more for their retirement.
"We cannot afford this," John said. "A member of Congress recently asked the Congressional Budget Office (CBO) to score out what would happen if we tried to deal with the deficits in our retirement system by raising taxes above a certain proportion of salary."
He said when attempts were made to score it, the CBO said its models were incapable of coping.
"Since the US economy is structured as it is, if you try to raise taxes you have massive drops in GDP and massive increases in unemployment. We are in a real box. Either we finance this, or a portion of this, through an individual's own saving, or we face chaos."
The US has three entitlement programmes. An entitlement programme is an automatic spending programme which means money is spent without any congressional oversight or day to day work. The three programmes are social security, Medicare and Medicaid, which is a healthcare system for lower income workers and disabled workers.
John estimated these three programmes on their own, if they continued on their current course, would consume every single dollar of federal tax revenue by 2051.
In terms of pensions policy, John predicted that a McCain administration would follow a bipartisan cross-ideological consensus.
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