"People are going to jump off tall buildings!" That's what my daughter said when she heard my subject matter on NewsRadio 1120, KPNW last Wednesday.

I was asked by the radio host, Robb Holloway, what I saw in the future. I didn't hold back and provide a feel-good response. I pointed out the three major problems our country has with no good solutions in sight:

1. The National Debt

The National debt of $16 trillion and growing by about a trillion a year as far as we can see. The Congress and administration cannot see their way clear to propose realistic increases in taxes and reductions in government spending. The latter has grown exponentially in the last 10 years, and we can't even agree on a way to go back to what spending was last year.

The only thing the government can do is to print money to pay the interest on the debt and to redeem maturing Treasury bills, notes and bonds. As everyone knows, this is inflationary. Inflation cheapens the value of a dollar which allows the government's debt to look somewhat smaller but it's disastrous for retirees. It also allows the Feds to pay interest and maturing bonds with less valuable dollars.

Inflation is not as effective now because much of the spending is for Social Security, Medicare, Medicaid, food stamps, subsidized housing, other welfare programs and government pensions — which are adjusted upward for inflation thereby requiring even larger payment in the future.

2. Demographics

Demographics are the next problem without a good solution. Our population is aging so that there are proportionately more older people than younger people. That's because our birthrate is below the amount necessary to increase the population. High immigration rates of skilled young people with higher birthrates and significant taxable income might help.

It's the younger working people that provide most of the tax money used to support the entitlement programs and even family care for the elderly. The increasing number of elderly puts additional strain on Social Security and Medicare. Unfortunately, health costs increase significantly with age so Medicare gets hit with more older people and the compounding effect of their necessary care over longer periods.

3. Personal savings deficit

The lack of personal savings is the third and likely the biggest problem. Our country started a consumption binge in 1985 leading to an unrecoverable savings shortfall that's greater than the national debt and still growing.

The personal savings rate (employer savings plans and pension trusts included) declined almost linearly from 1985 to 2005 where it got to essentially no savings at all. Simultaneously debt soared.

The square footage in new homes grew to almost twice that of the last generation. More baths, bigger rooms and closets are filled with more stuff. Low interest costs made homes more "affordable" to people who thought homes would be a great investment — only to find out that the price of growth was more than offset by the much higher cost of owning a larger home.

People developed a taste for more expensive automobiles assisted by government safety and mpg regulations. Ethanol was added to gasoline, which reduced the mpg — and it costs more than gasoline — all to help the corn growers which, in turn increases the price of corn and its many byproducts.

Technology developments in cellphones, television, I Pads, GPS, computers, Internet, social media, etc., were difficult to resist adding more things to be purchased to keep up with the Joneses while adding to monthly bills. Industry added to the savings problem by getting away from pensions in favor of 401(k) plans — the latter under-subscribed and far underfunded by personal savings.

Then the radio host asked the all important question: What will people do since they can't save much and returns are so low?

My answer was, "Work longer."

The tail end of the Boomer generation and those following will pay the heaviest price because they simply cannot afford to retire at younger ages. These people will be heavily dependent on government assistance in their old age. Social Security will provide most of their income, not just the intended 40% of their retirement support. If they can't work till 70 or save enough to get much larger benefits by starting Social Security later in life, many are going to live in poverty.

That's when my daughter said, "People are going to jump off tall buildings!" But you know what? Working the five extra years, say from 65 to 70 is a small price to pay for the more than 20 years increase in life expectancy since Social Security was started. When it was started, only a few people lived to age 65. Now the average person expects to live to 85 and we have to plan on the high possibility of living to 95.

So get off that ledge and come back into the building. Sell that expensive house if necessary and severely restrict your spending to get more savings. Rent out a room, plant a vegetable garden, develop an additional marketable skill, and stop pampering your children with expensive electronic gadgets and automobiles.

And this is the toughest part: Try to find people to run for public office who understand the importance of living within our income!