Baby Boomers May Bust Economy, Greenspan Warns
September 13, 2004
Federal Reserve Board Chairman Alan Greenspan, speaking before the Federal Reserve Bank of Kansas City, recently gave some suggestions on how to keep the Social Security and Medicare systems solvent. The well-known expected shortfalls in the Social Security system will be minor next to the problems the country will encounter trying to support Medicare, Greenspan said. "Medicare faces financial pressure not only from the changing composition of the population but also from continually increased per-recipient demand for medical services," he said. Part of the solution is to boost primary and secondary school education to increase worker productivity, he said. Encouraging older workers to continue to work past the now-accepted retirement age of 65 will also help, he added. "Changes to the age for receiving full retirement benefits or initiatives to slow the growth of Medicare spending could affect retirement decisions, the size of the labor force and saving behavior," he said.