Bank of America (BAC) Says Entitlement Programs Unsustainable

Chief economst of Bank of America (NYSE:BAC), Mickey D. Levy, said in a recent interview that "unfunded unfunded liabilities of the Social Security, pension, and medical entitlement programs" are unsustainable, and aren't even included in the Federal budget, which itself is unsustainable, even without the entitlement programs.

Levy said, "Fiscal policy – that is, current tax and spending policies - is on an unsustainable path. The gap between spending and taxes must be closed. Also, the federal budget is on a cash-flow basis and does not include the massive unfunded liabilities of the Social Security, pension, and medical entitlement programs. It is well known that coming to grips with the nation’s large fiscal gap requires addressing these entitlement programs. In the context of these massive problems, which are widely understood, the current angst and political maneuvering around the debt ceiling reflects the failure of our political process."

Commenting on what he considers the biggest risk in 2011, Levy noted it "is not a sharp spike in inflation – I do expect modest increases in inflation pressures – rather, a spike in inflationary expectations that would push up bond yields. Higher bond yields would be reflected in higher mortgage rates and higher borrowing costs for businesses and could adversely affect the stock market."

While Levy calls for the passing of legislation to slash future deficits, he unfortunately calls for an increase in taxes, which completely fails to deal with the out-of-control government spending.

Government must be whittled down far below its current size, and the American people must continue to focus on and vote in those who are committed to that end.




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