Alan Simpson: US could hit the skids in 10 years

The country 'will be sucking canal water' if officials can't find a way to clamp down on costs, the former senator says.

By MSN Money Partner Mar 5, 2014 2:45PM
Credit: © Evan Vucci/AP
Caption: Former U.S. Republican Senator Alan SimpsonBy Jeff Morganteen, CNBC

Former Sen. Alan Simpson (pictured) had a dire prediction for the U.S. if budget officials continue to focus on short-term issues when it comes to the national debt.


The country will hit the financial skids in the next 10 to 15 years if officials don't find a way to clamp down costs from our rapidly aging populace, the Republican former senator from Wyoming told CNBC on Tuesday.


"Play small-ball and 10 to 15 years from now your country will be sucking canal water and that's the way it is," Simpson said on "Squawk on the Street." "It's called the debt. It's $17.3 trillion, heading for 20, and at some point the people who have loaned us 20 trillion bucks will say you've got a dysfunctional government and you've got a Congress that doesn't work."


Simpson, who along with Democrat Erskine Bowles chaired President Barack Obama's bipartisan commission on fiscal responsibility in 2010, said it takes too long to establish lasting reforms. He pointed to a Social Security system whose future solvency has been neglected for decades.


"The stuff that is going to eat our lunch is 10,000 people a day turning 65," Simpson said. "Health care is on automatic pilot, forget what you call it. It's time to deal with the long-term stuff before interest goes from what it is now back to historical heights.Then watch people grab their socks and run for blocks."


Simpson expressed skepticism toward any type of meaningful spending reforms, contending that there's an interest group ready to oppose each potential spending cut or tax hike.


"Whatever you do, whether it's tort reform or real estate, the groups will organize and say, 'These guys are nuts and this is the end of America,'" Simpson said. "You've got to go into the tax code and start ripping those things out of there. Each one of these groups has a constituency that will run a front-page ad and tear your shorts off."


Simpson's comments come as Obama released his 2015 budget on Tuesday, a spending plan that includes new tax credits and job training programs for workers while tightening tax loopholes for the wealthy. The White House also wants to increase spending on road improvements and to expand early childhood education, but Republicans want to reduce the government's role in economic initiatives.


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259Comments
Mar 5, 2014 4:04PM
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Forget the wudda, cudda, shudda,  nonsense and get on with business.  Start with a flat tax.  NO LOOPHOLES for anyone even politicians.  All monies collected for social security remain in social security with no excuses or borrowing by any government entity.

With the flat tax in place, there will be little or no need for the IRS as it is today.  Use that surplus investigative personnel to uncover FRAUD in welfare, food stamps, government/ contractor spending, etc. 

Lets face it folks....this is not a Democrat or Republican problem.  It's both of them.  Neither will ever fix what has to be done because they are the problem.  There are no "statesmen" only politicians out for power and money.  The ideologies they spout is nothing but a diversion to keep us in line and divided amongst ourselves.  We must develop strict term limits for all elected officials.  These career loafers and carpetbaggers get too comfortable and make relationships that are contrary to the best interests of this country.

Their decisions are made by how much power, votes and or money they will realize. 

These are scary times.  For the first time in my lifetime I am more fearful of the damage done and apparentlyy continues by our own leaders than by any external terrorists.


Mar 5, 2014 3:21PM
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Right, with politicians enjoying benefits the average citizen will never received, and not only when they are in office, but for the rest of their lives.  On the taxpayer dole.  They need to clean up their own backyard first.
Mar 5, 2014 3:36PM
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Fiscally this makes sense.   The 53% that work cannot continue to support the 47% parasitic democrats that vote for a living.   These leeches continue to vote democrat because the democrats bribe them with other people's tax money.   They stay bought as long as  the handouts flow.

America cannot support government consuming 24%+ of GDP.  Government creates nothing people are willing to buy of their own free will.  Government products are expensive, shoddy, and must be forced upon people at IRS point.  

We must shrink government, SLASH spending, reduce debt, and end the use of taxpayer money to buy votes of the leech class.


Mar 5, 2014 3:46PM
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TERM LIMITS!!!!!!!!!!!!!!!!!!!!!!!!!!
Mar 5, 2014 3:45PM
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It didn’t happen all at once, but the dream that was the United States of America, the Great Republic, has died. Other countries hostile to the idea of true freedom didn’t cause it; it wasn’t caused by a radical religious organization. The downfall of the United States was all from within its own borders, by its own people. The people, for whom others have died, have allowed the country to die a slow death. The me too, me first attitude that started many years ago, along with the idea that all are entitled to the fruits of others hard work, has allowed this country to bleed to death. When the British raised the tax on tea, our forefathers should have just shut up and paid the tax. Almost 240 years later, what has changed? Thousands have died for absolutely nothing.

Mar 5, 2014 3:20PM
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I am 59 years old and plan to retire at age 62.  I paid into Social Security and Medicare all my life (since I received my first Social Security card when I was 11).

 

Whatever the politicians in Washington D.C. decide...every penny I put into these programs had better be there for me in three more years.

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We will be having this same conversation in 10 years.  Then 20, etc

 

If you personally want to be ahead of the game, DO NOT go into large debt other than for a small home.  Purchase everything used, like an older car and kitchen appliances, furniture and save until you have enough to purchase replacements.  Stay out of the bars and away from cigarettes.   Marry a like minded individual that can follow this premise, perhaps have a garden and can make do with less than the neighbors. It is never about how much you can accumulate, but how much you need that is free and clear of owing anyone. Make and stick to a budget for each paycheck.

 

Soon you will have more than the neighbors in paid off wealth.   Save at least 10% of your income annually and invest it in good dividend paying companies.  You can do this through any broker that has a monthly installment plan for certain stocks.  Put them all in a self directed IRA. 

Do not rely on the Gov't to help you.  The more you are independent of the Gov't, the better off you will be.

 

I know people who have followed this pattern and are totally independent.  It works if your family has self worth and can control their desires.  

 

One note;   The trucking industry is looking for good over the road drivers.  There is a shortage in this section of high paying jobs.  Already this year companies are having loads held back due to transportation issues..   Might be an area that if you are looking for work will help you out. 

Mar 5, 2014 3:31PM
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If we had Obama for the last 15 years instead of just 5 years -  we would be on the skids NOW. Read "Aftershock" and put some sense in your empty liberal brains.
Mar 5, 2014 3:26PM
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Ahhh, excuse me Senator, but you seem to not realize the US is already in the skids.

For some clues, beyond the points you properly raised, look at the inability to grow jobs in the US, the increasing levels of household debt, pending bankruptcies in major cities, the recent increases in Federal, State and local taxes, the farcical implementation of Obamacare, and our declining leadership and respect around the world as most recently reflected by Putin's escapades in the Ukraine.  Need I go on?
Mar 5, 2014 2:56PM
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You have the majority of educated folks saying this already and you choose to listen to him.  You Liberal media folks are 80% of our problem to start with.
Mar 5, 2014 4:10PM
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Get ready for inflation.  That is the best way for a country with Our monetary and economical clout to pay off debt with the least pain - so long as: 1)  Obama doesn't destroy our standing in the mean time or (2) China and the rest of the world don't successfully create a new "blended" currency that overtakes the dollar.
Mar 5, 2014 3:53PM
Mar 5, 2014 3:44PM
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If you have paid into Social Security, you are entitled to payment when you retire. You are not entitled to a raise every year or so for any reason. That is not how pensions or insurance works. Social Security is meant to keep you out of poverty, not pay for every convenience life has to offer.

Mar 5, 2014 3:52PM
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the last gen election proved the masses dont care about the spending
Mar 5, 2014 3:44PM
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Food Stamps are one of the most abused and wasteful social program this country has ever developed. A family of four receives more money monthly then my family of five spends a month on food. The amount paid out each month should be cut by at least one third. Purchases by food stamps should be (if not already) restricted to the following: Fresh/frozen non prepared meats & fish, fresh/frozen non prepared vegetables, deli meats/cheeses, canned goods, breads, non sweetened dairy, and non sweetened juices. The following should always be banned, and processes need to be in place where not already, to restrict: Soda, bottled water, power and energy drinks, sweetened juices, coffee, tea, ice cream, candy, energy bars, any pre-prepared meals or sandwiches, snacks/junk food, or any food that is mail ordered or shipped anywhere. If these rules would be followed, and recipients would learn how to shop and properly eat, no one would be hungry and we the taxpayers would save billions.

            Tobacco and alcohol should be banned from purchase by welfare funds. No cash should be allowed to be pulled off of any assistance cards except at banks and should be limited to a very low percentage of funds.

Mar 5, 2014 3:10PM
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"The country will hit the financial skids in the next 10 to 15 years if officials don't find a way to clamp down costs from our rapidly aging populace, the Republican former senator from Wyoming told CNBC on Tuesday."

States the guy getting massive Retirement benefits from the Government and or the massive Retirement benefits of Lobbyist to the Already Wealthy. Put back the Stolen Social Security and Medicare Funds first before you talk about what may or may not happen.

Media folks Period are the problem, regardless of party affiliation. The same can stated for the posters who claimed higher educations and where calling for the Markets to implode merely at the Hint of taper. Many of those who you will see post today. They were wrong about that and most are talking about education while showing very little education about the real World themselves.
Mar 5, 2014 3:40PM
Mar 5, 2014 3:41PM
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I'd change the could hit the skids to will hit the skids. It'll get to the point where it'll take all just to pay the interest on the debt.
Mar 5, 2014 4:03PM
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You know what we need?  Bread and circuses! 
Mar 5, 2014 3:22PM
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A large problem that has contributed to our debt is the defined payment plan (pension and social security). If instead we had a defined contribution plan (ex. 401(k)) we would not be facing many of these issues. When Social security came out the life expectancy was 65 years. Now it is more like 75 years for men and 79 for women. This has allowed some to collect far more then they ever put in and others to collect far less. Defined payment plans have lots of uncertainty which is why most companies got away from them and those who did not are now suffering. This is also a large reason why many cities are going bankrupt. 
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