James Surowiecki is an economist who writes a column for the New Yorker. This week its about Da Financial Cliff <cue up scary music>. Despite being in a fundamentally liberal magazine, Surowiecki is an economist who rational approach appeals to even the republican business critters in my family. This week he makes a great point (amongst several) that is worth repeating. Raising the medicare eligibility age from 65 to 67 isn’t going to make anything better. It will immediately save 6 billion dollars for the government, but that assumes that all those folks between 65 and 67 won’t go and get medical care. Of course they will. And it will have to be paid for. But because Medicare is more efficient at holding down costs, it will end up resulting in an extra 11 billion dollars spent on medical care. Someone will have to pay for this. Some of those someones will be the 1%, but by definition the other 99% will have to use money from somewhere.
In his own words
Sure, it would extend the life of Medicare, but that’s meaningless on its own: you could extend the life of Medicare indefinitely if you restricted it to people over eighty-five, but that doesn’t mean it’s smart to do so. Only an obsession with the trust fund makes kicking people off Medicare seem like a rational approach to our health-care problems.
I would find politicians and their rhetoric tedious if this wasn’t so scary.