Organization That Could Not See $8 Trillion Housing Bubble Warns About Aging Population

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Thursday, 07 October 2010 22:20

Standard & Poor's, which is probably best known for giving investment grade rating to mortgage backed securities backed by junk mortgages at the peak of the bubble, warned that demographic changes would pose severe budget burdens and urged the United States to begin to begin cutting back programs for the elderly now. In an article presenting Standard & Poor's view on this issue, it would have been worth reminding readers of the company's track record. It probably would also have been appropriate to remind readers that it was paid large amounts of money for the investment grade ratings it gave to these mortgage backed securities.

This background would allow readers to better assess the nature of Standard and Poor's advice to the American people. Economists who are not paid by Wall Street banks have used the exact same data to point out that the projected budget problems are due to the incredible inefficiency of the U.S. health care system. If the United States paid the same per person costs as any other wealthy country the long-term projections would show huge budget surpluses, not deficits.