We need deep and fundamental cuts in federal spending, which means, above all, Medicare and Social Security, because that’s where the money is. The whole concept of an “entitlement” was a mistake–really, a disaster–that must be repudiated. But for the foreseeable future, there will be no political will to make such changes. So we’re going to see a race between political will and economic collapse. It’s hard to be optimistic about the outcome unless a drastic change in our political culture takes place, soon.
It’s hard to disagree with this assessment, but don’t panic. While we may see economic collapse, it will happen in fits and starts – government bankruptcies, bank closures, tight credit. And there are self-healing factors to consider: Medicare spending will stop growing as more doctors and hospitals stop or limit accepting Medicare patients. It’s already happening. It’s happening even faster with Medicaid. The slide into true reform and renewal will be gradual, not cataclysmic. It will nevertheless be painful, especially for those who put their faith in fanciful promises from politicians.