Maintaining Optimism in the Face of Reality. Occasional observations on the state of the world, society, business and politics. Usually anchored by facts, always augmented by opinion.

Thinking About Social Security & Medicare  | e-mail post

Normally, despite my love for information graphics, I am the first person to mock USA Today for the little pieces of infoporn they scatter through the magazine. I guess it's because I go more for the triple-X hardcore variety of infoporn rather than the Maxim-grade infoporn typically produced by USA Today.

However, they do have an interesting Flash-based tool on their site this week that helps illustrate the looming financial impact of social security and medicare. It's tied in to a broader piece on the debt crisis of unfunded entitlement programs. The handy part is that it lets you calculate an estimate of what the predicted lifetime benefit you would recieve in Social Security and Medicare payments.

The model was developed by Eugene Steuerle and Adam Carasso of the Urban Institute, and at their site, they actually provide all the methodology about the calculator you would want, including the Excel worksheet that underlies the calculations. This is the kind of detail and transparency I appreciate from the best think tanks and research organizations like UI.

Now, the model is not perfectly accurate to the extent that it really doesn't take into account a lot of factors (increased health care costs and decreased life expectancy of smokers, for example) but it is pretty good, and more detail than I typically see in the standard press.

A couple of things worth noting. First, if you put yourself into the calculator, I bet you will see that you're predicted to get a rather large net benefit from the government. Think about where that money is supposed to come from, and it's not John Kerry's magic wand, or the money tree. Second, I thought this paragraph in the article accompanying the calculator was very interesting:
The USA now spends about 15% of its income on health care — about half paid by the government, the rest by private insurers and patients or their families. Other industrialized countries spend an average of 8.5% of national income on medical care — about 75% paid by the government.
Although they don't extend out the math, the net is that the US government spends 7.5% of the GDP on health care for its residents while the governments of other industrialized countries spend only 6.375%. Seems strange since we're supposed to be the ones without socialized medicine.

Of course it makes sense when you consider that we have access to the superior healthcare you expect to come from a market economy, but we force the government to pay for market-leading healthcare even for those individuals who could not afford it on a market-basis. America long ago linguistically corrupted the idea of "fairness" into something more like "equality," and this is the price we pay.

e-mail post | Link Cosmos | [Permalink]  |  | Tuesday, October 05, 2004
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