Thursday, February 18, 2010

The Unsustainable Truth-6

The next big programs that we have to fund are Medicaid and Medicare. These are huge entitlements and will be becoming bigger and bigger every year due to the advances in technology and the fact that people are living longer. Another factor contributing in the increase in health cost is the debt that the young doctors accumulate by the time they graduate from Medical school. How to contain this cost has been a dilemma for every administration. Politicians don’t want to touch this entitlement since most of the senior citizens vote and they don’t seem to look kindly to people who touch their most cherished entitlement (toy, prize, and right, whatever you want to call it).

Although the United States population is increasing (due to immigration) but still our young generation which is already burden with debt (student loans, credit card debt, etc) will not be able to sustain the aging population unless we either drastically reduce the benefits or increase the taxes. Both of these solutions have its own opponents like the reduction of benefits will be opposed by the elderly and the increase in taxes by the young. I fear that there will be clash generations as we approach how to keep both of these factors in balance. But there is no escaping the fact that all the countries which have embraced this welfare model of government will in future see their economies suffers due to these entitlements. Unless somebody tell the public the true picture of the finances I guess that it will be business as usual in all these places until the day of reckoning.

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