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Thursday, May 10, 2007
The Biggest Driver of the Long-Term Fiscal Challenge
Doing a bit of research into mandatory spending, I came across this GAO document, which contains this bit:
Among mandatory spending programs...the health area is especially important because the long-term fiscal challenge is largely a health care challenge. Contrary to public perceptions, health care is the biggest driver of the long-term fiscal challenge.
This cannot be said enough: health care is the biggest driver of the long-term fiscal challenge.
While the GAO report makes the point that if the government continues to pay for the health care of seniors, the tax burden will be absolutely crushing, it will degrade our standard of living and put national security at risk. This all might be true, but consider the dynamic that is causing this rapidly increasing rate of Medicare spending.
As Americans retire, they switch from using private health insurance to using government health insurance. Whether its the government or individuals, someone will be picking up the tab for senior health care. Either way, health care spending is going to consume a lot of national income. And rather than shifting this crushing burden on to seniors, we should fix the Medicare imbalance by fixing skyrocketing health care costs.
Posted by Craig Jennings
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