We are always so pleased to be able to share with you articles from Charles DuBois, an incredibly talented and tremendously experienced research analyst and fund manager, with whom I had the distinct pleasure to work with and learn from during my tenure at Invesco. I’m very pleased to say that I continue to learn so much from him on a regular basis. Chuck’s focus today is on the “entitlement crisis”.
We hear and read, it seems on a daily basis, about the dangers of the Federal public debt. We are reminded about the looming fiscal crisis. We are told we are broke, that we are “leaving a burden to our grandchildren” and that we could even become the next Greece. These views are widely believed not only because of their constant repetition but also because they appear to reflect straightforward accounting as well as our common sense.
The primary culprit for these concerns is the projected growth of “entitlement spending” as, according to projections, such spending will be consuming an ever increasing share of federal outlays. With the baby boomers now retiring, this “threat” is now upon us and the situation is usually described as “unsustainable”. Should we worry?