Medicaid's Soaring Cost: Time to Step on the Brakes

Current trends and policies imply unsustainable growth in federal Medicaid outlays. In the year 2006, federal Medicaid spending was 11.9 percent of federal general revenues and 1.5 percent of GDP. Making conservative assumptions about future growth in Medicaid enrollment and spending per beneficiary, this paper estimates that the present value of federal Medicaid outlays over the next 100 years will take up 24 percent of the present value of federal general revenues and 3.7 percent of the present value of GDP calculated over the same period. By the end of the next 100 years, that is, in the year 2106, Medicaid's share of federal general revenues will be 48 percent -- four times larger than its 11.9 percent share in 2006. In the year 2106, federal Medicaid spending as a share of GDP is estimated to be 7.4 percent -- a fivefold increase from its current share of 1.5 percent. If the federal government continues to match state Medicaid outlays at the current rate, Medicaid's share of GDP in the year 2106 will become 13 percent -- or one-eighth of GDP in 2106. If current policies and trends are maintained, federal Medicaid outlays will take up 36 percent of lifetime federal general revenue taxes for males born in 2025 and 69 percent for females born in that year. For females born after 2050, almost all of their lifetime federal nonpayroll taxes will be consumed by their lifetime Medicaid benefits. Higher tax rates cannot plausibly cover this growing spending commitment. On average, today's 35-year-old males are projected to have 15 percent of their lifetime federal general revenues returned in the form of Medicaid benefits. Maintaining that ratio for today's newborn males would require a 78 percent increase in their lifetime nonpayroll taxes. Limiting Medicaid spending growth is, thus, an essential component of putting the federal budget on a sustainable course without imposing crushing tax burdens on younger and future generations, thereby harming the prospects for future economic growth

The Connection between Wage Growth and Social Security's Financial Condition

The conventional view that faster wage growth would improve Social Security's financial condition rests on several measures of the program's finances that the Social Security trustees emphasize in their annual reports. These measures include annual cash-balance ratios, the 75- year actuarial deficit, the "crossover date," and the "trust fund - exhaustion date." All of these measures show that Social Security's financial condition would improve if future wage growth were faster. This conventional view also suggests that the trustees' relatively conservative assumptions about future wage growth cause the program's financial imbalance to be overstated. Unfortunately, the measures highlighted in the trustees' annual reports have a short-term orientation that biases calculations toward showing an improvement under faster wage growth. The connection between wage growth and Social Security's finances should be evaluated using measures that are free of a short-term bias. This Policy Analysis evaluates the connection under the more comprehensive infinitehorizon "fiscal imbalance" measure. It uses simple cases of the program's operation to explore the impact of the relevant forces -- population aging, wage growth, discount rates, and the projection horizon. It shows that although faster wage growth is desirable in and of itself to increase general prosperity, it would likely worsen Social Security's overall financial condition. By implication, a "do nothing" policy motivated under the conventional view would be diametrically opposed to the correct perspective: Early reforms of Social Security should receive higher priority under faster wage growth

Has someone already spent the future?

A look at how four trends in the U.S. economy -- high taxes, low savings rates, an aging population, and astronomically high health care costs -- could constrain Americans' living standards over the next few decades.Budget deficits ; Saving and investment ; Insurance, Health

The decline in U.S. saving rates: a cause for concern?

An examination of the decline in the net national saving rate since the early 1980s, which identifies an ongoing, fiscally induced wealth redistribution toward older generations and a sizable gain in annuitized forms of saving as underlying reasons.Saving and investment

Generational equity and sustainability in U.S. fiscal policy

If U.S. spending goes as projected, future generations will give up almost half their lifetime labor income to balance the government's books. After showing that current policy is not sustainable, this article reports the size and timing of the changes necessary to make it so.Fiscal policy ; Taxation

Speaking of accounting scandals...

The better stockholders' information about a firm's prospective finances, the better their decisions on investing their money productively. The same is true of lawmakers' decisions on how to allocate public funds. As the Enron-Andersen debacle has made abundantly clear, murky financial reporting can have devastating consequences. Is something similar happening with reporting on government finances-especially with regard to Social Security and Medicare?Social security ; Medicare ; Budget

Demographic change, generational accounts, and national saving in the United States

An investigation of how alternative population projections affect measurement of the intergenerational imbalance in the distribution of resources and an analysis of the impact of demographic change on U.S. national saving.Fiscal policy ; Saving and investment

Exploiting loop level parallelism in nonprocedural dataflow programs

Discussed are how loop level parallelism is detected in a nonprocedural dataflow program, and how a procedural program with concurrent loops is scheduled. Also discussed is a program restructuring technique which may be applied to recursive equations so that concurrent loops may be generated for a seemingly iterative computation. A compiler which generates C code for the language described below has been implemented. The scheduling component of the compiler and the restructuring transformation are described

Evolutionary Multiplayer Games

Evolutionary game theory has become one of the most diverse and far reaching theories in biology. Applications of this theory range from cell dynamics to social evolution. However, many applications make it clear that inherent non-linearities of natural systems need to be taken into account. One way of introducing such non-linearities into evolutionary games is by the inclusion of multiple players. An example is of social dilemmas, where group benefits could e.g.\ increase less than linear with the number of cooperators. Such multiplayer games can be introduced in all the fields where evolutionary game theory is already well established. However, the inclusion of non-linearities can help to advance the analysis of systems which are known to be complex, e.g. in the case of non-Mendelian inheritance. We review the diachronic theory and applications of multiplayer evolutionary games and present the current state of the field. Our aim is a summary of the theoretical results from well-mixed populations in infinite as well as finite populations. We also discuss examples from three fields where the theory has been successfully applied, ecology, social sciences and population genetics. In closing, we probe certain future directions which can be explored using the complexity of multiplayer games while preserving the promise of simplicity of evolutionary games.Comment: 14 pages, 2 figures, review pape

Mutualism and evolutionary multiplayer games: revisiting the Red King

Coevolution of two species is typically thought to favour the evolution of faster evolutionary rates helping a species keep ahead in the Red Queen race, where `it takes all the running you can do to stay where you are'. In contrast, if species are in a mutualistic relationship, it was proposed that the Red King effect may act, where it can be beneficial to evolve slower than the mutualistic species. The Red King hypothesis proposes that the species which evolves slower can gain a larger share of the benefits. However, the interactions between the two species may involve multiple individuals. To analyse such a situation, we resort to evolutionary multiplayer games. Even in situations where evolving slower is beneficial in a two-player setting, faster evolution may be favoured in a multiplayer setting. The underlying features of multiplayer games can be crucial for the distribution of benefits. They also suggest a link between the evolution of the rate of evolution and group size