Geoff Colvin of Fortune offers a blueprint for detecting whether the final report from Erskine Bowles and Alan Simpson?s federal deficit reduction panel offers useful recommendations.
Among Colvin?s most interesting observations:
The panel might try to soothe worried citizens with a reassurance that we still have time — the Medicare Part A trust fund won’t be exhausted until 2029, and the Social Security trust fund not until 2037. Yet every commissioner knows that’s nonsense. Those trust funds are invested in Treasury securities; they’re just more government debt. Medicare and Social Security start to bite not when their trust funds run out but when the programs go cash-flow negative. For Social Security that happens this year; for Medicare it was last year. We do not still have time.
