Dean Baker: Stop Blaming The Baby Boomers

[marmar]

from OurFuture.org:



Stop Blaming The Baby Boomers
Submitted by Dean Baker on September 20, 2007 - 11:49am.



Guest blogger Dean Baker is co-director of the Center for Economic and Policy Research.

Over the last two decades, there has been an effort by the enemies of Social Security and Medicare to demonize the baby boomers as a threat to country’s prosperity and the well-being of our children and grandchildren.

They have repeatedly warned of the enormous projected cost of Social Security and Medicare and called on the current or future elderly to sacrifice their benefits under these programs for the common good. We heard endless tales of $70 trillion dollar-plus deficits and how our children and grandchildren would face crushing tax burdens unless the greedy soon to be geezers accepted large cuts in their Social Security and Medicare benefits.

Those of us who challenged this story now have an important ally in Peter Orszag, the new director of the Congressional Budget Office. Orszag has made a point of distinguishing the extent to which costs are projected to rise due to aging and the extent to which they are projected to rise as a result of the rising cost of health care in the United States. As he recently said at a press event, “The long-term fiscal problem truly is fundamentally one involving the rate at which health care costs grow and much less about the aging of the population.”

This is hugely important. The way to deal with scary long-term budget projections is to fix our health care system, not to gut Social Security and Medicare. While aging will impose some additional costs in the future, this is not new; life expectancies have been increasing ever since the United States came into existence. The new threat is a health care system that is projected to consume more than 30 percent of gross domestic product in just over three decades. If health care costs in the United States looked more like those in any other wealthy country, we wouldn’t have to look at scary budget projections.

The moral of Orszag’s analysis is that those who are concerned about the huge deficits projected for future decades should be working first and foremost on reforming the health care system. If we fix our health care system, then our other budget problems are manageable. If we don’t fix the health care system, we can look forward to a future of bad health care and a weak economy. We will also have insoluble budget problems.

http://commonsense.ourfuture.org/stop_blaming_baby_boomers_deficits?tx=3

[xchrom]

1. and the way to get health care costs under control is a single payer

universal healthcare system.

[sandnsea]

2. Most sensible thing I've heard in a while

This is exactly right. Baby boomers paid the taxes that created the surplus. We aren't the problem. A broken health care system creating future deficits is the problem.

[damntexdem]

4. I tell my gerntology students:

"I paid my dues, now I want my goodies. You'd better come up with some way to pay for them,"

[DURHAM D]

5. Not only that - we paid for our parent's goodies as well.

Oh that greatest generation - they have national health insurance and all those monthly checks.

Their contribution to the fund for their health insurance - not much, its mostly my money that allows them to go to the doctor whenever they have a pain. Their contribution to the funds that generate their monthly checks - oh about the first year and half they received them. The following decades - that was my money.

[damntexdem]

3. Good, but even this fails to make an important distinction, between:

(1) the aging of the population, and (2) we Baby Boomers. The boomer phenomenon is a matter of the aging of approximately two ten-year cohorts that are of massive size, moving through the population age structure like a pig through a python. The aging of the population involves the tendency of each age cohort to live longer and the tendency of recent cohorts to be smaller relative to their parents' cohorts. The boomer phenomenon is starting to hit the Aging Network, and will soon be hitting Social Security and Medicare; but it will be largely over by mid-century -- we boomers will have mostly died off. Thus, the boomer effect will have largely spent itself about the time that the Trust Fund has been projected to become inadequate to pay 100 percent of Social Security benefits. By contrast, the aging of the population and lower fertility are presumably-lasting phenomena (unless global warmning does away with the tendency of cohorts to live longer).

[WeCanWorkItOut]

6. Two excellent points. And then the politics (faults on all sides)

1) Not just the boomers, but the excessive cost of health care

2) Not so much the boomers, as an older society (the age curve is shaped less like a pyramid, and more like ... an inverted U? how to describe that?)

3) Much to examine in the health care system: hospitals, doctors, pharmaceuticals, administration, education. I'm worried that so many good people are focussing only on administration and Big Pharma. But a recent study seemed to show that if we had a Canadian system, we could save at most less than 9% on administration. Off the top of my head, that suggests 27% of GDP on health care, instead of 30%, three decades on. Still impossible. That means, I suggest, that we need to make the issues more accessible, to bring more non-experts into the hard analyses.