CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs CEPR Blog It's the Health Care Costs, Not Longevity

It's the Health Care Costs, Not Longevity

Print
Written by David Rosnick   
Monday, 17 May 2010 10:17

It's time for another round of missing-the-point-on-entitlements. This time from the Cato Institute, which declared, "Our welfare state is already well on the path to bankruptcy. ... Compared to the damage done by native-born U.S. citizens and their cursedly long lifespans, the immigrants' overall effects are quite small. It would be unkind of us to set up such an ill-considered system and then pin its inevitable demise on others."

Unable to argue with the last point, it is unfortunate to see that Cato highlights long lifespans as a primary source of trouble in our entitlement programs. In fact, longer life expectancy accounts for very little of the long-run deficits. Rather, an expensive and increasingly costly health-care system drives the projections of long-term deficits.

In 2009, the Congressional Budget Office projected a budget deficit of 45 percent of GDP in 2083. Merely restricting health-care cost growth to overall growth in the economy plus aging of the population would eliminate more than three-fourths of the projected deficit. If the U.S. were to spend as much per-capita on health care as the Euro area (which has life expectancy two years longer than the United States) then by 2083 the federal government would be running surpluses of more than 10 percent of GDP.

Comments (0)Add Comment

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613
budget economy education employment Haiti health care housing inequality jobs labor labor market minimum wage OccupyWallSt poverty recession retirement Social Security taxes unemployment unions wages Wall Street women workers working class

+ All tags