WASHINGTON, Feb. 3 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke Thursday repeated his call for Congress to take serious action to address the federal budget deficit.
"If government debt and deficits were actually to grow at the pace envisioned, the economic and financial effects would be severe," he said, addressing the National Press Club in Washington. "Sustained high rates of government borrowing would drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. income, output and standards of living."
The Congressional Budget Office projects the federal debt to reach 90 percent of the gross domestic product by 2020 and soar to 150 percent by 2030. Bernanke said two unavoidable forces, healthcare costs and Social Security, will gang up on the federal budget, no matter what direction the economy takes.
Healthcare costs represented by Medicare, Medicaid and other programs are expected to double as a percentage of the GDP in the next 25 years, he said.
"The retirement of the baby boom generation will also strain Social Security, as the number of workers paying taxes into the system rises more slowly than the number of people receiving benefits," Bernanke said.
Specifically, he said there are now "about five individuals between the ages of 20 and 64 for each person aged 65 and older." But that is expected to change.
"By 2030, when most of the baby boomers will have retired, that ratio is projected to decline to about three," he said.
