Washington went into near-ecstasy last week thanks to some good news from the Medicare program trustees. Healthcare costs seem to be growing at a slower pace. Medicare's bills aren't declining — they're simply increasing a little less quickly than the trustees expected. Hooray! Light the cigars!
I suppose we should be grateful for any glimmer of hope. And I would be, if anyone in power had seized upon this news as a chance to make further progress. Congress and the White House instead are using it to postpone any debt-reduction deal past the 2014 mid-term elections.
The spending and debt is almost too astronomical to comprehend. According to the USA Debt Clock's handy real-time scoreboard, the federal government's future unfunded liabilities are approximately $124 trillion. Not millions, not billions: trillions. This is the estimated amount that the government has committed itself to spend under current law, and for which no offsetting tax revenue is presently expected.
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The estimate makes many assumptions about population, birth rates, life expectancy and so forth. You can quibble, but the number is enormous any way you look at it. What kind of spending creates so much future debt? Here's how it breaks down.
| Social Security
|| $16.4 trillion
|| $86.2 trillion
| Prescription Drugs
|| $21.6 trillion
Add together the original Medicare program and the Medicare Part D prescription drug benefit, and you'll see that about $108 trillion of the $124 trillion in unfunded liabilities is driven by healthcare for senior citizens and disabled people.
This is the source of the debt crisis: 87 percent Medicare, 13 percent everything else. Is Social Security also a problem? Yes. Do bureaucrats have too many parties? You bet. Do we spend too much on foreign aid, farm subsidies and food stamps? Probably so, but those are rounding errors compared with the Medicare spending. And this doesn't include Medicaid for the poor, or the forthcoming Obamacare program.
The federal debt will remain incomprehensibly huge until healthcare costs generally, and Medicare spending in particular, are sharply reduced. This is a mathematical fact. You can take every other spending category down to zero and we would still have a huge problem.
Waiting will not make the medicine taste any better. And what are our leaders doing? They're kicking the can down the road one more time. It's worked so far.
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