Hypothetical Mean

Commentary from an Actuarial and Economic Perspective

Do I want a fiscally responsible President?

with one comment

I think so.  But this article gives me pause.  It quotes Obama:

“Social Security, we can solve,” he said, waving his left hand. “The big problem is Medicare, which is unsustainable. . . . We can’t solve Medicare in isolation from the broader problems of the health-care system.”

I suspect this quote reveals that he and I view these programs from fundamentally opposite perspectives.  I see Medicare causing broader problems in the healthcare system and rarely suffering from them.  The fundamental Social Security problem is how to maintain the program’s popularity with ever-declining benefit-to-contribution ratios.  Both contibute to the overarching problem of how to manage the overall impact of these programs on the general finances of the US government.

I am not particularly concerned, per se, about the long-term projected deficit in Medicare, and am only moderately more concerned about Social Security’s actuarial deficit.  I fear “solutions” to these problems that emphasize policy options that exploit weaknesses in the assumptions and calculations rather than focusing on the fundamental issues.  Saying we can “solve” Social Security suggests to me a very narrow version of what that “problem” really is.  Saying that we must reform the private healthcare market to reform Medicare is tantamount to avoiding the tough healthcare financing issues facing that program.

I’m not unhappy yet.  He vagueness leaves much to the imagination.  But I am becoming concerned.  Tyler Cowen is much happier.

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Written by Victor

January 16, 2009 at 6:09 pm

One Response

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  1. At least Obama let’s us know our debt will grow astronomically.
    http://www.smellytourist.wordpress.com

    smellytourist

    January 16, 2009 at 6:14 pm


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