Sharing news and commentary about education, careers, investing, and life.

Sharing news and commentary about education, careers, investing, and life.

Friday, February 8, 2008

No Country For Young Men

No Country For Young Men is a really hard hitting piece from The Atlantic on the future of the USA and its baby boomers. This is for anyone interested in the future of this country... a hard hitting quote:

Social Security is the comparatively easy problem to solve. It will go from consuming 4.3 percent of GDP in 2007 to absorbing about 6.2 percent in 2030. That’s a big jump—if the cost were spread evenly, it would be equivalent to about a 5 percent increase in payroll taxes for each worker—but by and large, the economy will be able to cope.

Medicare is a different story. Health-care costs now consume about 16 percent of GDP, but projections by the Department of Health and Human Services suggest that by 2016, that will have risen to almost 20 percent. Wise speculates that closing the Medicare budgetary gap would require a tax increase of something on the order of 8 to 12 percent of total payroll. That is a massive tax increase—$4,000 to $6,000 a year on a $50,000 income (again assuming the tax were spread evenly). Many economists and budget analysts have drawn up plans intended to fix Social Security, through some combination of benefit cuts, higher retirement ages, and tax increases. But almost no one claims to have any good ideas about Medicare.

1 comment:

Becca Wehunt said...

This is serious stuff, and I really hope lots of people are starting to pay attention to it. One thought I'll add to the growing problem is that Medicare is becoming increasingly expensive for providers as well. More and more doctors are dropping out due to inadequate reimbursement, leaving their Medicare patients in a lurch. These patients are forced to turn to state-owned hospitals and clinics, who cannot refuse to accept Medicare. This can only make the problem worse as states will have to find the money somewhere, likely in taxpayers pockets.

The ultimate problem with health care is the rising cost. If someone doesn't find a way to reduce the cost, or at least stabilize it, anything other strategy will only work for a while. Right now we're talking band-aids when we need to be talking stitches.