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Home Publications Blogs Beat the Press The NYT Thinks that Medicare Should Lead to Intergenerational Conflict

The NYT Thinks that Medicare Should Lead to Intergenerational Conflict

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Saturday, 12 January 2013 08:56

That's what Catherine Rampell told readers in her Economix blogpost today. The piece comments:

"From an economic standpoint, it’s actually a bit surprising that Americans don’t see greater tensions between the generations. Medicare and other public spending on the elderly (such as public pensions at the state level) has been gobbling up an increasing share of government budgets, which crowds out spending on the young and raises their future tax burdens."

Americans probably recognize that the high cost of Medicare is primarily due to the high prices charged by drug companies, medical suppliers, and doctors. That would be a basis for class conflict, but not getting mad at their parents. They probably also understand that public pensions are part of the pay of public employees. This is not a generational issue, it's a question of the pay levels of public employees, which research shows to be comparable to the pay of private employees with comparable education levels.

Comments (9)Add Comment
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written by foosion, January 12, 2013 9:56
Some people even realize that they may be older some day and can accept paying today and getting benefits later.

At this point, there's no reason we can't spend on both the young and old. Tax rates are low, interest rates are very low and there's lots of unemployment and unused capacity.
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written by masaccio, January 12, 2013 10:37
Most of figured out that if it weren't for Medicare, we'd be trying to buy private insurance for our parents, or contributing to their medical expenses.
Also ignored by NYT: the damage done by health spending for those NOT on Medicare
written by Rachel, January 12, 2013 10:39

In California, for instance, in addition to the usual medical non-competitiveness, we have a growing problem with hospitals' market power. (Coming soon to hospitals near you!) More concentration of hospitals and providers means less competition, more negotiating power for providers, and thus higher incomes. For them.

But for every one else it means health prices rise too fast. For some in California that's recently meant double-digit premium increases. The high rate of inflation is bad for cities and the state, bad for MOST employees. It is NOT just the cost of Medicare that is going up rapidly due to inefficient markets. The cost of insurance for everyone goes up too fast. It means that some people don't get raises. Some get pay cuts. Some people don't get hired, some even lose jobs because of it. Almost everyone is hurt.

How can the people at the NYT have let that elude them? How can they not notice what is causing so much damage?
can the mainstream media be done with this already
written by Jennifer, January 12, 2013 10:43
In the past year it seems nearly every major media outlet has run a story along these lines, either in regards to Medicare or Social Security, OMG THE OLD PEOPLE ARE TAKING EVERYTHING. In the world where most people live, they are well aware that these are programs that most people over 65 depend on and would like to have them around when they themselves are older. All of the younger people I meet are most concerned that they cannot get or keep a good job, or have tremendous college debt. They seem quite aware that these are issues independent of SS and Medicare and government/elected officials could do more to help them on these particular issues if it wanted to. So they may be angry at the president or the congress but they do not blame their parents or grandparents, as they recognize that a disruption to these programs will only add to their personal burden.
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written by skeptonomist, January 12, 2013 12:15
So did Social Security lead to intergenerational warfare, or should it have? Before the start of the program, there was no transfer of income from the working generation to their elders through the federal government. Now, about 13% of wages and salaries (up to the limit) are taken out for this, and yet more for Medicare. Of course working people have in many cases been relieved of the necessity to support their parents directly. Maybe there is a different attitude, but future demographic changes will cause small changes in comparison to that caused by the creation of SS and Medicare.
Retired Small Business Owner
written by Jim Forrester, January 12, 2013 2:09
Aging is a universal expectation. Most people understand they will need an income and care when older and realize public programs are the foundation of a secure retirement. They also know if federal insurance programs do not provide for their elders, they will be doing it out of their own pockets. The result is the cross generational popularity of Social Security and Medicare.

While there are a great number employed in the public sector, their numbers do not come close to the universality of people who get old. A large minority are thus able to close their minds to facts about public employees at no cost to their personal circle and become callus to the true situation of this large body of the work force.
public employee pensions
written by ethan, January 12, 2013 6:16
No MSM report that I have read in the last 3 years has pointed out the obvious difference between public employee pensions and private employee pensions. Virtually all public employers have opted out of Social Security, so the only thing their retires get is the pension. Private employees, however, double up with both pension and social security.
Doctors?
written by Nick Batzdorf, January 12, 2013 7:10
I buy all of this completely - except for the part about doctors charging too much. Yeah they make less in other countries, but it can cost - I'm not kidding - hundreds of thousands to go to medical school. Specialization takes several additional years. And that's why there's going to be a shortage of primary care physicians.

Plus my understanding is that 10% of the cost of healthcare goes to doctors.
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written by watermelonpunch, January 13, 2013 6:43
You keep forgetting to mention the part where - hey, a lot of us hope to get old one day and then get Medicare & Social Security.

(I say "hope to get old" in relation to the alternative. ;)

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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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