What’s Really Really Causing Long-Term Deficits

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.


Andrew Sullivan approvingly quotes The Washington Times’ Bruce Reidl on “What’s Really Causing the Long-Term Debt”:

So as deficits expand by 5.9 percent of the economy, nearly 90 percent of the growth will come from higher-than-average spending, and just over 10 percent from lower-than-average revenues. Virtually all of this new spending will come from surging Social Security, Medicare and Medicaid costs (driven primarily by 77 million retiring baby boomers), as well as net interest on the national debt.

Reidl is just wrong. Social Security is not the major reason for long-term deficits. Neither is the baby boom. Reidl’s right that higher Medicare and Medicaid spending will overwhelm the budget. But that’s not because of the larger baby boom generation. It’s because of America’s staggeringly high and fast-rising medical costs. There are many other developed countries with higher life expectancies than the US that manage to keep health care costs much lower. If our health care costs were comparable to those countries, our huge projected long-term deficits would be much smaller—or even disappear. You can see this clearly in the Center for Economic and Policy Research’s health care budget deficit calculator. CEPR lays out the stakes:

The CEPR Health Care Budget Deficit Calculator shows that if the U.S. can get health care costs under control, our budget deficits will not rise uncontrollably in the future. But if we fail to contain health care costs, then it will be almost impossible to prevent exploding future budget deficits.

Of course, the US Congress seems unable to pass even the modest health care cost-cutting measures contained in the Senate’s health care reform bill. So the long-term outlook isn’t great.

WE'RE TAKING A SHORT BREAK…

from the big banner at the top of our pages asking for the donations that make Mother Jones' nonprofit journalism possible. But we still have upwards of $300,000 to raise by June 30, whether we get there is going to come down to the wire, and we can't afford to come up short.

If you value the reporting you get from Mother Jones and you can right now, please join your fellow readers who pitch in from time to time to keep our democracy-advancing, justice-seeking journalism charging hard (and to help us avoid a real budget crunch as June 30 approaches and our fiscal year ends).

payment methods

WE'RE TAKING A SHORT BREAK…

from the big banner at the top of our pages asking for the donations that make Mother Jones' nonprofit journalism possible. But we still have upwards of $300,000 to raise by June 30, whether we get there is going to come down to the wire, and we can't afford to come up short.

If you value the reporting you get from Mother Jones and you can right now, please join your fellow readers who pitch in from time to time to keep our democracy-advancing, justice-seeking journalism charging hard (and to help us avoid a real budget crunch as June 30 approaches and our fiscal year ends).

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate