Word: kotlikoff
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When the first baby boomer filed for Social Security in mid-October, chills must have coursed along Laurence Kotlikoff's spine. For years the Boston University economist, among others, has been warning of our pending financial crisis--the burden of Social Security and health care for our largest generation on the shoulders of a diminishing proportion of workers. "We're creating our own fiscal catastrophe," Kotlikoff said in 2004. At the same time, businesses have been desperate to contain rising health-care premiums. Three years later, Kotlikoff is still determinedly on message--and offers his own radical cure...
With the earnest tone of a teacher aching for his students to understand, Kotlikoff creates a stark picture of our looming financial straits. The "fiscal gap," or difference between what social programs cost and the money the government is bringing in to pay for them, is now about $230,000 per citizen...
...Kotlikoff's most interesting discussion is that there's no point debating the merits of socialized medicine, the one-payer system used in the U.K. It's already here, he says. It's just hugely inefficient, exemplified by many of the 47 million uninsured turning to emergency rooms for care. The other piece of it, Medicare and Medicaid, is going broke as the ratio of retirees to wage earners rises dramatically with the aging of 77 million baby boomers...
...Kotlikoff acknowledges his detractors, who argue that his plan for a complete overhaul, although market-based, is politically nonviable. Unlike the plans in Massachusetts and California that are buttressed by existing programs, his wouldn't be the sort of incremental change Americans have come to expect...
...perhaps that is Kotlikoff's crucial point and one that our presidential candidates should bear in mind. If our health-care woes are reaching critical mass, perhaps drastic measures are the only way to effect real change...