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Medicare and Social Security as the Biggest Drivers of the Deficits

Monday, 24 January 2011 15:46

Why does the NYT have to lump Medicare and Social Security together when everyone knows their stories are fundamentally different? According to the Congressional Budget Office, over the next quarter century annual spending on Social Security is projected to increase by an amount equal to 1.4 percentage points of GDP. This is considerably less than the increase in annual defense spending of 1.7 percentage points of GDP between 2001 and 2010. And, Social Security expenditures over this period are fully paid for by past and future Social Security taxes.

In contrast, the cost of Medicare is projected to rise by 2.3 percentage points of GDP over this period, starting from a considerably lower base. The annual cost of Medicaid and other health care programs is projected to rise by 1.9 percentage points. As everyone recognizes, the story of long-term budget deficits is the story of our broken health care system. Why is this so hard to tell the public?

(Thanks to Daniel Alvarado.)

Comments (4)Add Comment
written by izzatzo, January 24, 2011 4:00
Why is this so hard to tell the public?

Because this is just another big commie lie from a biased liberal newspaper. Glenn Beck has not yet identified Medicare, Social Security nor the Defense Department as separately dangerous persons targeted to be hunted down.

Until he does, the dog whistle will not blow and the nose rings will not rise to hunt down the true sources of debt-driven socialism by government category source.

Only unbiased facial recognition of dangerous individual persons can separately identify goverment sources of crippling debt by category, and no one yet has put a face on it like Beck will do when the time comes. Until then, debt is debt regardless of source.

Stupid liberals.
That's a superb Deficit Calculator. Now about obesity . . .
written by Ju Lin, January 25, 2011 7:05
Fascinating material you have in that Calculator.

One possible addition would be the effect of obesity, said to cost $147 billion a year, in medical costs alone. It's more if you add economic losses due to early deaths of productive people.

And what if the obesity were reduced by half? It seems to me that over a decade, we might be saving close to a trillion dollars, just in the medical costs. But I must defer to the superior analytic abilities of the CEPR team on that. For all I know it could save over a trillion.
written by skeptonomist, January 25, 2011 8:02
Budget projections are practically worthless. Remember a few years ago when authoritative "responsible" economists - like the Chairman of the Fed - were projecting surpluses so large as to be dangerous? When politicians were debating what to do with the surpluses, not how to address the deficits?

Current deficits are due to two things: tax cuts which mainly went to the wealthy; and a recession which was caused by insufficient restraint on the financial industry. So far, neither of these things has been addressed by Congress. Health care is a problem which must be addressed, but the causes of current deficits are not going to go away unless there is legislation to change them.
its worse...soc. security is not a cost!!!
written by pete, January 25, 2011 9:04
This is robbing Peter Jr. to Pay Peter...take money out of the youngens pocket to give to the geezers. Way different than lavishing beaucoup bucks on the SEIU and AMA. Note that SEIU hotel workers have been allowed to keep maximum annual payouts at like $50K while non SEIU workers will have a much higher payout, like $750K, with, natch, a prohibitedly higher premium....hmmm...should I join the union and get a higher take home and less health care, or take the non union lower pay plan???hmmm...
What a scam....

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.