There are two articles in succession in this week's NEJM which are well worth reading. I have liberally lifted quotes. The figures have been taken from other sources. The first article is "The Economics of Financing Medicare" (NEJM | July 13, 2011 |) by Katherine Baicker, Ph.D., and Michael E. Chernew, Ph.D.http://healthpolicyandreform.nejm.org/?p=14920&query=TOC
The article opens with a simple statement of fact:
for 15% of federal spending and 3.6% of the total gross domestic product (GDP). Moreover, Medicare spending grew an average of about 2.5 percentage points faster than the GDP from 1975 through 2008, consuming a rapidly increasing share of the country’s total resources."
There is good news and bad news. The public realizes we have a big problem with spending more than we have in revenues. The bad news is that in most cases math was not their best subject when in school. In a nutshell, the public perception of the what can fix the problem is at odds of what virtually any actuary would tell them:
Third, although most Americans (68%) believe that the federal budget deficit is a “very serious” problem (CBS, March 2011), a majority (54%) think it is possible for the federal government to balance the budget without cutting Medicare spending (AP). When people are given a list of options for reducing the deficit and asked whether they favor or oppose each item, cutting Medicare spending is one of the least favored. In two polls with such lists, only 21 to 22% favored cutting Medicare spending to reduce the deficit (WP–ABC, April 2011; CBS, March 2011; see table).
"Whenever either political party has put forth a proposal to improve Medicare’s long-term financial situation that includes raising taxes, major changes in the existing Medicare program, or substantial cuts in Medicare spending, the other party has strongly opposed it in the hope of gaining an advantage in the next election. In fact, within the past year, both parties have used the Medicare-cuts issue for campaign purposes. The current debt-ceiling debate has changed the short-term dynamic, but it has not altered the long-term play of these forces."
There you have it. What might work to actually address the the economic abyss we are facing creates a political abyss. Anyone who advocates for somethign other than kicking the can down the road will lose their next election. Can you say rock and hard place?