The fine folks over at CEPR just released a document with some charts that nicely illustrate my earlier post on the "Do-Nothing Caucus." Per capita GDP is a crude measure of how much money we all have. And the first chart uses it to show the effects of unchecked health care spending on national income. It compares per capita GDP and per capita GDP minus health care spending in 2010 and 2060. Watch that red bar shrink!:
Growth in health care costs eats up almost all of the increase in per capita GDP over the next 50 years. That's a staggering projection. In some ways however, the ext graph is even more impressive. Folks like Robert Samuelson worry frequently about the budget deficit. The following chart tracks the budget deficit as it's projected to grow over the next 50 years. The blue line -- that's the one shooting up -- is what we expect our deficit to actually look like. Those other lines, the one's going down (and down means no budget deficit, but instead a surplus), show what would happen if our health spending were equivalent to that of other rich nations like Japan, Germany, and Canada. The difference is stark:
And to just give you an idea of how absurd the Social Security fearmongering is, the above graph assumes no reform of the Social Security system. Social Security is not the problem. Medicare is not the problem. National health spending is. Without system-wide reform, the deficit will explode, to be sure, but the private sector will fare little better: The large real income gains we'd expect from 50 years of economic growth will be chewed up by the health system, leaving us basically stagnant. So I'll say it again: Raising the eligibility age for Medicare and cutting benefits for Social Security is doing nothing about the actual fiscal threat facing the nation. If you're not addressing national health spending, you're not addressing the problem.
Growth in health care costs eats up almost all of the increase in per capita GDP over the next 50 years. That's a staggering projection. In some ways however, the ext graph is even more impressive. Folks like Robert Samuelson worry frequently about the budget deficit. The following chart tracks the budget deficit as it's projected to grow over the next 50 years. The blue line -- that's the one shooting up -- is what we expect our deficit to actually look like. Those other lines, the one's going down (and down means no budget deficit, but instead a surplus), show what would happen if our health spending were equivalent to that of other rich nations like Japan, Germany, and Canada. The difference is stark:And to just give you an idea of how absurd the Social Security fearmongering is, the above graph assumes no reform of the Social Security system. Social Security is not the problem. Medicare is not the problem. National health spending is. Without system-wide reform, the deficit will explode, to be sure, but the private sector will fare little better: The large real income gains we'd expect from 50 years of economic growth will be chewed up by the health system, leaving us basically stagnant. So I'll say it again: Raising the eligibility age for Medicare and cutting benefits for Social Security is doing nothing about the actual fiscal threat facing the nation. If you're not addressing national health spending, you're not addressing the problem. 
