President Bush is not “cutting” Medicare spending—all the media hype notwithstanding… the President has not been suddenly seized by fiscal conservatism fever and did not, in fact, propose any spending cuts. Under the President’s proposal, federal spending on Medicare and Medicaid is set to increase by $84 billion from 2006 to 2008. That spending increase is certainly not a cut—even when including inflation, it represents a generous increase in entitlement spending. Newsweek confused cutting the rate of spending growth with cutting spending itself. The President’s proposals reveal an interesting picture: instead of growing at a 6.5% rate, the President would have Medicare grow at a 5.6% rate. Medicaid was set to grow at 7.3%; the President has proposed a 7.1% rate of growth. …It’s useful to place this spending restraint in perspective: entitlements face a looming $43 trillion shortage over the next 60 years, and unless entitlement spending is curbed, those programs are headed straight for bankruptcy. What’s fascinating is that if the President’s modest Medicare plans were realized, $8 trillion dollars would already be shaved off of Medicare’s future liability. It’s a hopeful reminder that moderate fiscal restraint can, over time, accomplish a great deal of good.
Featuring Dan Ikenson, Director, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute; Simon Lester, Policy Analyst, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute; Daniel Pearson, Senior Fellow, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute; and Bill Watson, Policy Analyst, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute.
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In this issue of the Cato Journal, economists Geoffrey Black, D. Allen Dalton, Samia Islam, and Aaron Batteen offer one prominent example of allowing the market to work. Also in this issue, economists Jason E. Taylor and Jerry L. Taylor reexamine the relationship between marginal tax rates and U.S. growth, and Robert Krol looks at bias in CBO and OMB economic forecasts.
The 2008-2009 financial crisis and Great Recession have vastly increased the power and scope of the Federal Reserve, and radically changed the financial landscape. This new ebook examines those changes and considers how the links between money, markets, and government may evolve in the future.