America Stands at a Budget Crossroads
Posted at 1:30 p.m. on Jan. 22
Robin Harding has a must-read piece on the “real fiscal choice for the US… how – or whether – to pay for an older population.”
“It is the 2020s when the big spending will start. The baby boomers, into their 70s, will start getting sick; the Social Security retirement age will stabilise at 67 in 2022… There are two reasons for the steep trajectory of projected Medicare spending. About half is due to the ageing population. The other half is because the cost per person has consistently risen faster than inflation.”
“Whether it is truly possible to save that much without rationing or limiting Medicare is hard to predict… Congress could set aggressive targets for Medicare cost control and back them up with tax rises or spending cuts… The fiscal challenge for the US is colossal. But if Washington can get past its obsession with today’s deficit, it can be resolved.”
