Preserving Medicare As We Know It Is An Option

I don't think that preserving Medicare exactly as currently structured is a good idea. To me, simply allowing current CBO projections of Medicare spending to take place would represent an inefficient use of social resources. That's why it's a good thing that the Affordable Care Act contained a large number of small changes to Medicare, small changes that will hopefully provide a basis for further reforms. But to write, as The Washington Post editorial page does, that "simply preserving Medicare as we know it is not an option" is false.

Here's the scary CBO chart:

Scary! But we could do this. We could, for example, reduce military spending from its current 4.7 percent of GDP down to the UK's level of 2.7 percent of GDP. Conceivably, we could go even lower. Canada spends 1.5 percent of GDP and Mexico spends just 0.5 percent of GDP, and since the US has a much larger GDP than Canada's we could presumably go all the way down to Canadian levels without opening ourselves up to the risk of foreign conquest. Still, that wouldn't get us all the way to where we need to be. Fortunately, American taxes are low by international standards:

Now to be clear again, I don't think it would be a good idea to adopt Dutch-levels of taxation in order to preserve the exact current structure of Medicare. One of the reasons why the Netherlands is such a nice country is precisely that those high taxes aren't just all sucked up by senior citizens' health care, and instead go to fund a much broader array of social services. But there are a wide array of possibilities here. One possibility, backed by House Republicans, is to stick with America's customary level of taxation, and stick with its hegemonistic military aspirations, and make that work (in part) by completely abandoning our traditional commitment to Medicare. But doing the reverse and sticking with our traditional commitment to Medicare by abandoning our tradition of very low taxes is equally possible. Pretending that it's not is a way of loading the dice in favor of one approach.