This is the Cato Daily Podcast for Monday, August 8, 2011.

I'm Caleb Brown.

Just days after a major credit rating agency downgraded the United States government.

The president argues that it's time to raise taxes and make

what he terms modest reforms to Medicare, but the amount of money needed to pay for

the promises of past Congresses and past presidents is simply uncollectible according to

Jagadish Goklay senior fellow at the Cato Institute. We know that we have an

aging population. The baby boomers are retiring. The first wave

started retiring in 2008 and they will be retiring for another 12 or 15 years and the ranks of

retirees will grow by 76 million which is the baby boomers and we've promised them benefits that far exceed what they paid in to

entitlement programs in the past. Social security, Medicare, and also Medicaid should be counted as an entitlement because it's a

safety net program and the benefits are politically entrenched.

It's basically impossible to tax our way out of this commitment because if we try to impose huge taxes on the backs of workers and younger generations, we will destroy the incentives to work and we will destroy the incentives of people who can provide capital to actually

provide it in the US to take their capital and migrate to other shores. So a tax side solution which most people including

President Obama is recommending that we adopt to solve the so-called debt problem that we have for which we just got downgraded

is just not feasible.

The taxes required are not collectible because if you try to raise taxes to pay for all these benefits, which amount by the way to hundreds of thousands of dollars more than what the baby boom is and today's

rotaries paid into these entitlement programs.

We are looking at a solution that will drive the economy into the ground.

And that's what the debt limit fight was all about, in order to wake people up and get them to realize that unless we reform entitlements structurally, meaning bring down the commitments to pay these benefits, which in any case exceed what the recipients

contributed in the past especially on health care. The tax side solution that is

being offered as an alternative and emphasized by many

...