In The Baseline Scenario today, James Kwak runs a chart from Rep. Paul Ryan‘s proposal to diminish Medicare:
“Here’s how to read that chart,” writes Kwak. “In 2030, under current law, a 65-year-old Medicare beneficiary’s health care will cost $60. (Obviously, this is using an index, not real dollars.) Medicare will pay $35 and the beneficiary will pay $25 in Part B premiums and cost sharing. Under the CBO’s more likely “alternative fiscal scenario,” her health care will cost $71, of which Medicare will pay $41. Under the Ryan plan, the same health care purchased in the private market will cost $100; “Medicare” will give her a $32 voucher, and she’ll pay the last $68 on her own. The bottom line is that the Ryan Plan increases beneficiary costs more than it reduces government costs. In a weird sense, it’s a bizarrely pro-government plan: it helps the government’s bottom line at the expense of ordinary people.”
I’m happy to see that President Obama got off the sidelines yesterday and proposed a deficit reduction plan that would cut federal budget deficits by a cumulative $4 trillion over 12 years (compared with a deficit reduction of $4.4 trillion over 10 years in the Republican plan), but that would reject the big changes to Medicare and Medicaid proposed by Republicans, and that would raise taxes on affluent Americans. Obama attacked the Ryan plan: “These are the kind of cuts that tells us we can’t afford the America that I believe in,” he said. “I believe it paints a vision of our future that’s deeply pessimistic.” Later, he said “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”
Here is the fight as I see it: some of the country’s wealth is individually held, and some is held in concert. The right to medical care in one’s old age is a common good; indeed, a health society is something that benefits everyone, even if you happen to be a rich, healthy, self-sustaining hermit. Right now, one percent of the population owns 25% of teh country’s wealth, and we should take some of their money to make sure this happens.