Theory post

To cut federal deficit requires long-term effort. Besides improving domestic economic condition and carrying out all kinds of rescue plans, government will also work on cutting government expense. Expenditure on Iraq war can be reduced by retreating gradually and shifting responsibility back to local police force; spending on dealing Asian issues can be reduced by turning China a responsible stakeholder and enlisting Beijing's help; however, medicare and social security is pure consumption and cannot be cut. But there are ways to make relief the pressure on deficit.
1. Slightly raise the rate of social security and medicare taxes. Since we are going to face less working force supporting larger retirement population, each young people need to pay more in order to support more than one elder.
2. government should stop borrowing money from social security funds. This may sounds nonsense, but every year government does borrow money from itself. It should be that U.S. Treasury borrows the money from funds in short-term, and returns the money in several weeks, one month, etc. However, this is not always the case. As the first wave of baby boomers becomes eligible for social security early retirement benefits, government needs to accumulate funds to avoid future bankrupt, to take efforts to avoid a soar in following years' budget deficit.
3. Baby boomers are likely to delay their retirement ages. Though Obama's increase tax may not be a good reason for working longer, baby boomers' life expectation and the characteristic of being young mentally may drive them to work longer. According to GAO's research, the retirement security of boomers and others will likely depend more on individual savings and returns on such savings.
Also, if Obama's health care reform plan works well, the larger medicare program grows, the larger amount of money is to be saved. Hopefully, medicare and social security expense will have limit effect on the budget deficit.