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Home Publications Blogs Beat the Press Savings to the Medicare Trust Fund Can ONLY Occur on Paper

Savings to the Medicare Trust Fund Can ONLY Occur on Paper

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Tuesday, 03 August 2010 05:18

In an article reporting on a study that concluded that the health care reform bill will lead to substantial savings for Medicare, the Washington Post told readers:

"critics say trust fund solvency will only improve on paper, since actual savings from the Medicare cuts would have been spent to provide coverage for more than 30 million uninsured Americans."

This is a real trip to bizzaro world. The Medicare trust fund is an accounting entity. Improvements can by definition only occur on paper, or more accurately in computer entries. It is not clear what the Post thinks it means with this statement. 

 

Comments (6)Add Comment
showing their bias
written by frankenduf, August 03, 2010 8:56
perhaps it represents a disappointment from a wealthy citizen's perspective- instead of savings creating some sort of cash kickback in a regressive tax system, the savings instead will be used to take care of poor citizens- kind of a bummer when somebody else gets $ and not you
...
written by izzatzo, August 03, 2010 10:13
Any economist knows that the concept of increased savings through expanded coverage was invented by the Pentagon, which demonstrated that the average unit cost of preventative war coverage is lower with two wars instead of one. For some strange reason those who pushed through health care reform never gave the Pentagon credit for providing health care to an additional 30 million.
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written by David, August 03, 2010 2:42
I think the point is that while the "trust fund" may save money, we're repeating the mistakes of the past by spending that savings elsewhere in the governmental budget...resulting in actual future government outlays being flat, versus down if we just took the medicare savings and didn't spend it.


Unfortunately, the same thing that got us into the SS/Medicare mess (spending trust fund surpluses to fund pet agenda items) is still reocurring, we're just shifting money from one pot to another without fixing the root problem(s).
send me your useless paper
written by anthrosciguy, August 04, 2010 1:26
You know, WaPo editors, those dollars in your pocket are just paper, backed up by paper. You clearly don't want them; send them to me.
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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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