The Hoax of 'Entitlement Reform'
Robert B. Reich
It has become accepted economic wisdom that the only way to get control over America's looming budget deficits is to "reform entitlements."
The accepted wisdom is wrong.
Republicans trot out federal budget data showing a 32 percent increase in direct payments to individuals since the start of 2009 -- including food stamps, unemployment insurance, worker's compensation and subsidized housing.
But these expenditures are temporary. They've resulted from the deepest economic downturn since the Great Depression, which forced many families to turn to the government for help.
But this only means the trust fund will be collecting from the rest of the federal government the IOUs on the surpluses it lent to the rest of the government. This still leaves the trust fund with a shortage about two decades from now.
Yet the best way to deal with this isn't to raise the eligibility age for receiving
That leaves two possibilities that "entitlement reformers" rarely, if ever, suggest but are the only fair alternatives: raising the ceiling on income subject to
What's left to reform?
The underlying problem is the soaring cost of health care overall, combined with the aging of the boomer generation.
The solution isn't to reduce
We're already spending nearly 18 percent of our entire economy on health care, compared with an average of 9.6 percent in all other rich countries.
Yet we're no healthier than their citizens are. In fact, our life expectancy at birth (78.2 years) is shorter than theirs (averaging 79.5 years), and our infant mortality (6.5 deaths per 1,000 live births) is higher (theirs is 4.4).
That's because doctors and hospitals in the U.S. have every incentive to spend on unnecessary tests, drugs and procedures.
An estimated 30 percent of all health-care spending in the U.S. is pure waste, according to the
Our balkanized health-care system spends huge sums collecting money from different pieces of itself: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policyholders.
A major occupational category at most hospitals is "billing clerk." A third of nursing hours are devoted to documenting what's happened so insurers have proof.
Cutting or limiting
Taming future deficits requires not only limiting the overall growth of health-care costs. It also necessitates cutting our bloated military, and ending corporate welfare (tax breaks and subsidies targeted to particular firms and industries).
"Entitlement reform" only distracts us from these more important steps.
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The Hoax of 'Entitlement Reform' | Economy
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