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Home Publications Blogs Beat the Press Nevermind: Headline of Correction for NYT Piece on Projected Cost of Dementia

Nevermind: Headline of Correction for NYT Piece on Projected Cost of Dementia

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Thursday, 04 April 2013 04:32

The New York Times ran a front page piece warning readers that the cost of treating dementia is "soaring." The piece tells readers of the findings of a new study by the Rand Corporation that shows the cost of dementia doubling by 2040 from its 2010 level.

Are you scared? Are you shaking in your boots? Thinking about pulling the plug on these costly old-timers?

Well our friend, Mr. Arithmetic, reminds us that the Congressional Budget Office projects that the size of the economy is projected to roughly double over this period. This means that the Rand study's finding implies that dementia will impose pretty much the same burden on the economy in 2040 as it does today.

This story follows a common practice among the Washington elite. They continually highlight and exaggerate costs associated with an aging population. Of course as a practical matter there is little that we can do about these costs, although we can redistribute the burden. The implicit and explicit intent behind much of this discussion is that the elderly and their children should bear more of these costs, as opposed to the government.

Keeping the costs of an aging population front and center in public debate obstructs discussion of the massive upward redistribution of income over the last three decades. This upward redistribution has shifted roughly ten percentage points of GDP ($1.6 trillion annually) to the richest one percent of the population at the expense of the rest of the population. The impact of this upward redistribution on the living standards of the bulk of the population dwarfs the impact of any taxes that might be associated with caring for an aging population through Social Security, Medicare, and other government programs.

If issues were treated in proportion to their importance to the public we would be seeing daily pieces on proposals for breaking up the big banks, taxing financial speculation, ending patent monopolies for prescription drugs, free trade in health care services and other measures that would reverse the upward redistribution of income over the last three decades. However, importance to the public is apparently not a major criterion for determining news coverage. Hence we get misleading front page pieces in the NYT on the cost of dementia.

Comments (10)Add Comment
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written by Last Mover, April 04, 2013 6:21
This sounds like David Stockman hysterically ranting that the Fed printed more money under Bernanke than it did from its inception. More cars use more gasoline as well because there's more cars, especially when caught in the traffic jam equivalent of a liquidity trap. Duh.
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written by caseyf5, April 04, 2013 6:29
I am truly grateful to the NY Times. It is one of the majority of newspapers in the US that is showing all the classical signs of dementia.
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written by Union Member, April 04, 2013 8:23

Caseyf5,

Why do you insult people with dementia?
...
written by kharris, April 04, 2013 8:59
A family faced with the need to provide for its elderly members would probably make preparations and budget some of its income for the old folk. It might do that grudgingly, or might not. How would we judge a family that begrudged its older members a decent existence?

Putting aside Samuelson's persistent difficulties with math, what he is urging is for the country as a whole to act in a scandalous way toward those who are no longer in a position to change their financial future much, because their earning and saving years are mostly behind them. That is not the choice a number of other nations have made and it is not a necessary choice. doesn't that mean it's an ugly choice?
Read the NEJM article!
written by Michael, April 04, 2013 12:04
The RAND study shows inflation-adjusted costs will double by 2040. Will the real GDP double by then?
this post is manifesto for Beat the Press
written by Richard Genz, April 04, 2013 3:54
Dean,
Thanks for showing how upside down our public discussion is.
Fantastic post.
Richard
Theft
written by JP, April 04, 2013 7:25
proposals for breaking up the big banks, taxing financial speculation, ending patent monopolies for prescription drugs, free trade in health care services and other measures that would reverse the upward redistribution of income over the last three decades.

That's so good I'm going to steal it! (with proper attribution of course) I'd be interested in your readers input as to what could be added to cover the "other measures" so I could steal that too!
All spending measures were converted to 2010 dollars with the use of the medical care Consumer Price Index
written by AlanInAZ, April 04, 2013 8:01
I understood the article to mean that the cost would double in today's dollars. The authors of the study do state that all costs were converted to 2010 dollars. If you throw inflation in to the mix over thirty years then the future cost will likely quadruple. The study forecasts that the "demented population" will increase from 3.8 to 9.1 million which seems consistent with a doubling of the baseline cost that will be subject to future inflation. The bottom line is that dementia will pose a larger burden on the economy.
REAL GDP WILL DOUBLE BY 2040
written by Dean, April 04, 2013 9:17
Yes, that is the point -- I know they adjusted for inflation. The question is how large will cost be relative to the size of the economy. Answer, about the same as today -- how's that for front page news in the NYT?
REAL GDP WILL DOUBLE BY 2040
written by AlanInAz, April 05, 2013 12:10
Dean,

Thanks for clarification - hope CBO projection becomes reality as this will resolve many issues.

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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.

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