Max S. writes >> Post-1986, US borrowing is financing tax revenue erosion and increases in health care (Medicare and Medicaid). ... Presently, public borrowing in the U.S. ... is making possible an intergenerational redistribution (e.g., borrowing finances health and nursing home care for the elderly now, future taxes service the resulting debt). << I would amend the above: 1) It's not "health care" that is increasing. It's _spending_ on health care. The phenomenon of health cost inflation is well known. That is, the actual use-value received from Medicare/Medicaid spending has increased much much less (per person) in recent years than the price of the use-value. In yet other terms, it's the medical and insurance industries that have benefitted much more that the Medicare/Medicaid recipients. 2) "Intergenerational redistribution" seems a very narrow way of looking at this issue. The US social security system is a inadequate way of handling the problem of the systematic insecurity that prevents workers from engaging in suffient life-cycle saving (and the capitalist system's systematic destruction of previous systems of community self-support for the aged). (The system is also running a surplus, helping to cover up a big chunk of the government deficit.) BTW, is government spending on elementary schools to be seen as "intergenerational redistribution"? After all, kids don't produce anything and don't pay any taxes. (Parasites all! Let them eat ketchup!) In the future, when the ratio of old geezers to paid workers rises, we will also see a fall in the ratio of kids to paid workers. So the geezers can be paid using the funds freed up by the declining importance of kids. I thought that it had been pretty well settled (on pen-l at least) that the problem with social security was not with the ratio of oldsters to youngsters but the slowdown in labor productivity growth (which may have in fact have been reversed). It should be stressed that the Trustees of the SS system assume that labor productivity growth and thus wages are going be growing much more slowly than suggested by the historical record. So the predictions of the SS system going deficit in the future are pretty pessimistic, too pessimistic given the evidence at hand. There was a pretty good article by Richard Leone (of the 20th Century Fund) on the op-ed page of the April 4, 1997 issue of the LA TIMES, page B9. He points out, among other things, that the ratio of nonworkers (and nonpaid workers) to paid workers was significantly higher in 1964 than currently or in the projections for 2030 when the "boomers" become oldsters. 1964 was not a period of excessive burden for the paid workers. BTW, Doug: who are the Trustees of the SS system? May I guess that many of them are Reagan-era appointees? in pen-l solidarity, Jim Devine [EMAIL PROTECTED] [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ. 7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA 310/338-2948 (daytime, during workweek); FAX: 310/338-1950 "It takes a busload of faith to get by." -- Lou Reed.
