Just the facts on Social Security and Medical Costs

Responding to the latest lies peddles by New York Times columnist Thomas Friedman, Dean Baker provides a quick summary of the facts regarding Social Security and medical costs on FireDogLake:

. . . The reality of course is that Social Security is fully funded by its own dedicated tax revenue through the year 2036, meaning the program on net imposes no burden on the government.

Under the law, if nothing is done to increase revenues SS will only pay about 80 percent of scheduled benefits in years after 2036. It is prohibited from spending any money beyond what it collects in taxes. The projected shortfall over the program’s 75-year planning period is equal to 0.6 percent of GDP, about one-third of the increase in annual defense spending between 2000 and 2011. It is difficult to see how a program that can only spend what it takes in from taxes could bankrupt the country, but this is Thomas Friedmanland.

There is more of an issue with run-away Medicare costs, but everyone outside of Thomas Friedmanland knows that this is an issue of run-away health care costs. If the United States paid the same amount per person for our health care as people in Canada, Germany, or any other wealthy country we would be looking at huge budget surpluses, not deficits.

This means that if we fix the U.S. health care system, then there will be no Medicare or budget problem. On the other hand, if we fail to fix the system, health care costs will bankrupt the U.S. economy even if we eliminate Medicare and other public health care programs altogether. . .