The Cato Institute has a new group blog that includes some very good writers like Radley Balko and Tim Lynch. Michael Cannon files this report about the new Medicare and Social Security trustees' annual reports that were just released. Some of the, err, highlights of those reports:
- The unfunded liability of the Social Security program grew by 20 percent (from $12.8 trillion to $15.3 trillion) while Congress dithered over reform proposals.
- But the Social Security gap is still smaller than the unfunded liability of just the Medicare prescription drug program, which weighs in at a robust $16.2 trillion.
- The total unfunded liability of Medicare topped $70 trillion (It's actually $70.8 trillion. Round up or down to suit your taste.)
- The trustees' estimate of the unfunded liability of the Medicare drug program actually shrank 11 percent from their 2005 estimate of $18.2 trillion. But that reduction was more than offset by a 2 percent increase in the unfunded liability of the physician insurance part of Medicare (from $25.8 trillion to $26.2 trillion) and a 16 percent surge in the unfunded liability of the hospital part of Medicare (from $24.4 trillion to $28.4 trillion).
I'm sure our grandkids will be so grateful. Thanks, all you "small government" Republicans who control the entire legislative process but just saddled us with an extra 16.2 trillion dollars in debt with a bill that you would never have let pass if a Democrat was in the White House. Thank you so much.
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Ed writes:
You know, a $16,200,000,000,000 debt when averaged over everyone (300,000,000) is only $54,000 each. That is so doable. Sell one kidney and you're almost there. What's that? You said that's extra on top of what is already owed? Oh dear ... Better take action. I know, they can raise the debt ceiling again! Whew, close call.
Whatever happened to those small government fiscal conservatives indeed? Has any Democrat ever overseen this much carefree spending? How about all the Democraticic Presidents combined? What a tragic tragic legacy we're leaving our kids and grandkids. Not only financially, but environmentally. I shudder to think what their lives are going to be like. But what the heck, that'll be a problem for a different administration. We can blame them.
"Unfunded liability" is a crock. Social Security is not and can not be fully funded. SS was conceived and implemented as a "pay as you go" system. Intentionally. Correctly.
If the government was generating the amount of investment reserves necessary to make the system anything *close* to fully funded, the government would be the biggest shareholder in every significant company. That would not be good. Period.
The actuaries and economists who designed the system realized that there is in reality no way to make intergeneration al transfers of wealth. You can't take what you earn today and sock it away for a generation and expect it to be there.
If the economy grows enough and if worker productivity grows enough and if some relatively minor adjustments to retirement age to account for improved longevity, the system will be just fine.
All this concentration on the "unfunded liability" is a tool used by people who wish to gut the system for no good reason.
ruidh-
When you continue to push up the amounts of money promised in the future without any means of funding it, you push up the tax rates that must be charged to ourselves and our children in the future to pay for those promised entitlements. The Bush administration just saddled us with an additional 16 trillion in promised entitlements with an incredible boondoggle of a prescription drug bill that, in reality, won't benefit anyone but big companies who paid for the passage of the bill. And we and our children will be paying for it for a very long time. You can't keep writing IOUs for more and more money in the future without pushing tax rates up enormously.
if a Democrat was in the White House.
What? Am I hallucinating or did you just say something nice about teh democrats?
I am pretty sure this ridiculous bill is a direct result of having a single party in control of government. I doubt the dems would have passed a bill as insane as this one if they had the same control of the fed as the republicans do but they would have found their own "moral" equivelents. While hoping someday to see the repub/dem stranglehold on our government broken, I am for now looking forward to a repub/dem split of checks and balances again.