The Medicare Crisis

Social Security needs reform. I commented yesterday on the real reason for this. But today I want to discuss an even worse crisis that looms on the horizon. Currently, there is a $45 Trillion balance of unfunded liabilities in the United States. That means that the U.S. Government has promised, at some time in the future, to pay out $45 Trillion that it will not have the money to pay out. That is $45,000,000,000,000. That's approximately $155,000 for every man, woman, and child in the United States today. In other words, the U.S. Government plans to add $45 Trillion to the $7 Trillion or so it already owes. About $30 Trillion of that is in the Medicare account alone. That number will only rise as new benefits (like the recently added prescription drug benefit) are added. And it is almost guaranteed that such benefits will increase in the next twenty years, since the 60+ crowd makes up the largest portion of the electorate already, and the number of people in that group is set to rapidly expand as the baby-boomers continue to age. They will vote themselves increasing amounts of money from the pockets of the decreasing pool of working-age citizens, and so the unfunded liabilities account is likely to skyrocket. This can be stopped, however. If Congress acts now to cut the annual increases in medicare benefits by only half, we can shave off $15 Trillion from that sum. That is not a cut in benefits, it is only slowing the increase in individuals' benefits. Failing to take action now will lead to dire economic consequences in the future.