Friday, February 03, 2006

With senescence comes budget growth

In the 2006 State of the Union speech, President Bush lauded budget cuts and reductions in funding for porcine programs:

My budget substantially reduces or eliminates more than 150 government programs that are not getting results, or duplicate current efforts, or do not fulfill essential priorities. The principle here is clear: Taxpayer dollars must be spent wisely, or not at all.
A cynic might snipe at the $500 billion that will have been spent on Iraq by the end of 2007. And certainly the budget cuts are diminutive in comparison to, well, much of anything. The $14 billion Bush has cut from the 2006 budget amounts to .005% (.00005 of the total budget mind you!).

Fundamental change has to occur for the lilliputian cuts to do anything more than score hollow ideological points. A staggering 47% ($1.32 trillion) of the 2006 federal budget will go to Social Security, Medicare, and Medicaid. Formulas for use of these programs are set by law--Bush cannot arbitrarily make cuts to them--the law must be changed. Demographic shifts make that increasingly unlikely, however, as some eighty million or so baby boomers will begin to become eligible for Social Security early retirement benefits. By early next decade, the diluge will be upon us. By 2040 it's estimated that every two workers will be funding the Social Security and Medicare costs of one retiree. With healthcare costs growing at three times the rate of inflation, that's going to be beyond untenable without huge cuts in benefits or devastating tax increases.

Medicare and Medicaid currently cost slightly more than Social Security, but they will extend their lead considerably in the coming years. By 2026 M&M will represent 22% of the US GDP (currently it's only 4.5%). Social Security's growth is flatter (4.2% of GDP today, projected to be 6.4% by 2050). The ominous portent referenced above is put into sharp contrast by these figures. Currently, the federal government's entire revenues amount to only 18% of GDP. In other words, if we were to be taxed at the same rates as we are today in 2050, we wouldn't even give up enough to pay for Medicare and Medicaid, let alone Social Security, interest on the public debt ($217 billion a year and growing), defense and education spending, and so forth.

Cutting benefits drastically, while infinitely appealing to my young mind, is becoming progressively less realistic as America ages. The political clout of groups like the AARP are going to increase, not decrease. The median age is already over 36, and it's becoming more grey by the day. Support for the Administration's Social Security partial privatization was strong among youths and eroded steadily as age increased (an aside: The puerile standing ovation the Democrats gave themselves when Bush mentioned his failed attempt at reform in the State of the Union address reminded me why, as disenfranchised as I feel by the Republican Party, my decision at the polls is always between Republican and third party).

Raising tax rates would obviously cause economic stagnation or even recession (estimates show that rates would have to rise above 50%). And increased tax rates are by no means directly equatable with higher government revenues. Slowed growth leads to less economic expansion, lower incomes, higher unemployment, and ultimately less money to tax.

Does a third option exist? SENS research theoretically could be an azoth, but beyond basic conceptuality it's too far over my head to comment on (if you're looking for a new destination for your charity dollars, this might be a cause to consider).

Another potentiality that is possible with current technology is the utilization of euthanasia for humans. The healthcare cost across the life an individual is a crescendo, increasing substantally as one enters the last years of life. The top 1% of people to whom health care expenditures are directed make up 12.8% of the total cost. The top 10% comprise over half. As people's bodies break down, they have to spend evermore on medicines and doctor's visits. The last few days can cost in the tens of thousands in some cases. Letting people go out on their own accord would lessen not only the financial burden of fighting a losing battle against undefeated death but also save the suffering of friends and family members who must witness the sad deterioration of one with Alzheimer's or terminal cancer. Further, it would alleviate pain by allowing one to drift comfortably to sleep instead of agonizing terribly and then dropping off.

Currently Oregon is the only state in the US with restricted voluntary euthanasia. There needs to be restrictions. For example, adolescents should be barred from it unless terminally ill and with the consent of parents. People deemed mentally unstable should similarly be restrained. But for those faced with a preciptous decline in health and quality of life should have the option to go out with dignity for the betterment of those they are leaving behind.


Constantine said...

Mandatory euthanasia at seventy. Five years of retirement is enough!

crush41 said...

Heh, while I've jokingly suggested the same before in conversation, that suggestion falls under the impotence of a host of possible reforms aimed at limiting benefits (this one being the most extreme, taking life rather than just refusing resources!) due to the greying of America. Simply put, there are too many old people that will vote against anything that restricts their benefits. That's democracy.

And of course there are plenty of archaic beings who are anything but vegetables. Sam Huntington wrote "Who are We?" at seventy-seven. The retiring Alan Greenspan is seventy-nine.