The Value of Government Projections for Entitlements
The problem with the CBO Baseline is that the projection is based upon an assumption that has no historical basis. The assumption is that the growth in health care spending will decline to a growth rate that is 1% greater than GDP growth. In fact, the historical increase in Medicare and Medicaid spending has averaged 2.5 percentage points greater than the growth of GDP over the past 40 years. Using the historical rate of increase, Medicare and Medicaid alone would consume all tax collections by 2044 if the tax rate remained at the 2007 level of GDP (18.8%).
Well, the solution is simple. Raise taxes, of course! Jeez, Owen, you need to be more progressive. </snark>
Posted by Mike Gallo on August 22, 2008 at 1658 hrs
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