Quote from Scataphagos:
Shoot the messenger?
What they say about spending and deficits is true... but nobody wants to listen.
Scat. I have a different take on this. I agree with you that what they said is true, however it is misleading. Simpson-Bowles failed to focus sufficiently on the main sources of our deficits. I don't want to go into a lot of detail here because more numbers are posted elsewhere. But the bottom line is this: there are two areas of major U.S. expenditure that are grossly out of whack with the other industrialized nations. These are, as I'm sure you know, defense and medical care. We in the U.S. spend 2.8 Trillion per year on medical care, while the average per capita expenditure of the other industrialized nations is half ours with a better outcome. We could save 1.4 Trillion a year by doing what other nations do.
We spend nearly as much on defense as all other nations combined. By bringing our defense expenditures down by 50% we would still be spending ten times per capita what most other industrialized nations spend, and save about 425 billion per year.
There is a fundamental problem with our system of private sector insurance for the young and healthy and Medicare for the old and infirm. Medical care, sadly, is not a good fit to the capitalist mold because demand for medical services is quite inelastic. Because of this it's extremely difficult to provide the competitive environment in the medical sector that capitalism needs to function well to everyone's benefit. I'm not saying it's impossible to provide enough competition, but I'm beginning to think perhaps it is.
By bringing the costs mentioned in the first paragraph in line with other advanced nations, which might require that we go to a single-payer medical care system and direct much of the defense industry to other areas, there would be more than enough money to lower our public debt to a very reasonable level in a decade or two and still provide high quality medical care and security from foreign threats. We would probably end up with Medicare for everyone and we wouldn't have to touch Social Security other than to follow the actuaries recommendations.
I am very upbeat on the future of the U.S., because I am convinced there is still, in spite of recent financial calamities, off-shoring, etc, plenty of productivity and resources in our economy to solve our problems. The solutions are right before our eyes, if only we would open them. We will have to adjust both medical and defense spending eventually, we might as well get a start on it now.
We have plenty of money in the public sector, but we are spending it unwisely.
