How to Control Runaway Entitlement Spending
At the Becker-Posner blog, Richard Posner offers some ideas for amending the entitlements programs that are “threatening the long-term solvency of the federal government”:
Which leads me to the first of the only two practical ideas that occur to me for slowing the increase in entitlement expenditures relative to the size of the economy: a shift in emphasis in medical research from length of life to ability to live independently. Independent living means living without home care (whether by relatives, thus taking time from them that they could use more productively in other activities, including paid employment, or by paid care—paid by the government in many cases) and being able—and wanting—to work. Independent living can be fostered by focusing medical research on problems of vision, musculoskeletal problems (which impair mobility), obesity, and dementia, in preference to research on curing and preventing cancer, heart disease, and stroke.
My second proposal is to means-test social security and Medicare. About 7 percent of American households have incomes above $150,000. Most of these people are not wealthy (even people with incomes of $250,000, which places them in the top 1.5 percent of the household income distribution, are not wealthy by modern standards), but they are comfortable. They can afford to finance their retirement through savings, and to buy decent health insurance. In my opinion they should not be eligible to receive either social security or Medicare benefits. Taking them off the social security and Medicare rolls would produce an immediate substantial savings in federal entitlements expenditures.
Becker’s ideas for the same problem are a bit less radical.