Had an interesting conversation with a friend yesterday -- it somehow led to me asking if he was comfortable with the idea of paying into Social Security until he retires and finding it nearly or completely non-existant. Now, this guy is a triple major and no spring chicken -- but I found his response most interesting: Social Security's problems won't matter for another 60 to 80 years and the current "crisis" has been drummed up as part of a political agenda. Asymmetrical Information had a post on this yesterday leading to a National Review article about how Bush's social security changes have been portrayed in the media. You can't help but wonder just how much of an effect it has had on public opinion polls -- not to mention the effect of reporting unfavorable polls.

I hear and read this criticism fairly frequently: "it's all hype". Of course, the hype cannot be denied, it's how business gets done in Washington. No public exposure, no possible benefit to representatives. It's a convenient way of dismissing the problem out of hand and in the light of media focus on the Controversy of the changes instead of what the Numbers say, it works nicely.

Vodkapundit has a interesting take on how the recent pension plan dump and SS are related, as does thisAI post -- which points out some of the trouble that Medicare is in:

Look at Medicare, which everyone except the AARP agrees is a total financial disaster which will destroy the fiscal health of the United States unless something is done to control costs. Our politicians are well aware of the problem, and so they feverishly worked to--tack on a prescription drug benefit that will add trillions to the bill.

A quick search led me to a year-old SFGate story about the problems:

Under current law, Medicare's hospital insurance trust fund, which pays for inpatient hospital care, will be exhausted in 2019, seven years earlier than forecast last year.

-- Medicare costs will grow much faster than the economy as a whole, increasing from 2.6 percent of the gross domestic product last year to 3.7 percent in 2010, 7.7 percent in 2035 and nearly 14 percent at the end of the 75-year period commonly used for long-range projections.

-- Projected Medicare costs would exceed those for Social Security in 2024. By 2078, the level of Medicare expenditures would represent nearly twice the cost of Social Security.
...
Moreover, the full board said, the fiscal outlook may be worse than the official projections indicate, because the estimates are based on the unrealistic assumption that the average Medicare fee for doctors' services will be cut about 5 percent each year from 2006 to 2012, as required under current rules.
...
Bush administration officials said Medicare's financial problems would be far worse if Democrats had prevailed in the effort to pass drug legislation costing twice as much as the new law.

The last bit is especially ironic. The prescription drug benefit Bush signed into law will cost at least twice as much as he promised.

Keep in mind that this is all on top of the fact that neither party has a plan to even balance the Federal budget, let alone start paying down the deficit. If you think either the Republicans or the Democrats would be able to solve these problems, even given full authority, then you're mistaken. With both at each other's throats over matters like this, well..

Where are our benevolent robot overlords when we need them?

Posted by eric at May 12, 2005 11:14 AM

Comments

Posted by: d2ana at May 12, 2005 06:08 PM