Robert Reich opines:
Social Security is a tiny problem. Medicare is a terrible one, but the problem is not really Medicare; it’s quickly rising health-care costs.
I see this via Tyler Cowen, who correctly responds that, “if Medicare were less generous, much less would be spent on health care.”
A good demonstration of that point is to check out a pair of studies by MIT economist Amy Finkelstein, who found that in the first five years of Medicare’s implementation, U.S. hospital spending soared 37 percent without a “discernible impact on elderly mortality.” Medicare did reduce the out of pocket medical expenses of the elderly, but the result has been a massive burden on the younger generation that is threatening to bankrupt our country.
As it pertains to the current health care debate, there’s an argument to be had about what government’s role is in providing health care to Americans, but if we’re going to have that debate, it would be nice if the other side were honest about the costs of what they’re proposing. Simply put, providing subsidized health care to everybody will not lower spending, it will drastically increase spending unless the government rations care, which the other side isn’t willing to admit either.
I was chatting with a friend of mine about the entitlement crisis the other day, and he compared Obama to Nero, fiddling while Rome burns. But personally, I think we’d be better of with Nero — Obama isn’t fiddling, he’s dousing everything with kerosene.