This chart illustrates one of the nation’s biggest fiscal challenges. It is based on the Congressional Budget Office’s long-term spending projections. Colored segments represent the relative contributions of Medicare and Medicaid, Social Security, and other spending to the overall composition of long-term federal outlays. According to these data, entitlement spending over the next 50 years will grow at 1.4 percent annually, twice the historical rate of growth in government spending. As you can see in the chart, Medicare and Medicaid are on track to grow so fast that they will soon squeeze most other spending out.
What this chart tells us is that, no matter who’s elected today, it is vital that programs like Social Security, Medicare, and Medicaid be reformed Medicare and Social Security. If they aren’t, we will witness a massive transfer of wealth from the relatively young and poor in the country to the relatively old and wealthy. Here are some ideas about how to reform Medicare and Social Security — I would favor a more radical approach to reforming these programs, but I am be happy to concede that reforming the programs today beats doing nothing.
Medicaid must be reformed too. The program has become one of the biggest budget items in most states and its size continues to grow; it encourages bad decision-making from state lawmakers and is riddled with inefficiency, waste, and abuses without delivery a proper service to the truly poor in America. Here are some ideas about how to save Medicaid.