Many of the stories on the reduction in the 2006 budget deficit have correctly focused on the fact that the long-term deficit picture still looks pretty awful. However, they have badly misled readers about the reason for the deficit problem. The standard line is that "Social Security and Medicare" costs will explode as the baby boomers retire (e.g. this NYT piece).
This is incredibly misleading. Social Security costs will rise modestly -- the projected increase in SS measured as a share of GDP from 2005 to 2030 is less than the increase from 1960 to 1985. The real culprit in the story, as every serious reporter knows, is Medicare. And the reason that Medicare costs are projected to explode is that the U.S. health care system is broken.
In other words, the deficit stories should be talking about how the exploding cost of the U.S. health care health system will devastate the budget and the economy. People should demand that the reporters get this simple point right and stop telling scare stories on Social Security.
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