September 24, 2010
Dean Baker on solving the budget deficit problem
I just returned from a talk by Dean Baker, co-director of the Center for Economic and Policy Research, and he said that there is no crisis in social security and the real crisis is the rapid rise in health care costs that, if unchecked, could raise the budget deficits from their current value of around 10% of GDP to disastrous levels of 30%, 40%, and even 50% in the next few decades. But our policy makers, instead of addressing this issue head-on, are instead deflecting attention to other things.
If our per capita health care costs could be made the same as Canada and the UK, the current budget deficits would become surpluses even if we did absolutely nothing else, such as raising taxes or cutting costs in other areas. It is that simple.
This is pretty much what I have been saying for some time, but Baker has studied this issue in great depth for many years and so has way more facts at his fingertips. He is one of the foremost authorities on social security, Medicare, and the budget. You can follow him on his blog.