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Politics : Formerly About Advanced Micro Devices

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To: RetiredNow who wrote (321587)	1/18/2007 5:13:09 PM
From: TimF	Read Replies (1) of 1576612

The current deficits or even the current debt level, doesn't really arise to a problem of a major intergernerational mess unless growth stagnates. But then if you anticipate a protracted recession after 2010 then I can see why you are concerned. A bigger mess is entitlements. I do think the current promises are too expensive, but its politically very difficult to cut back on them. Health care costs are escalating for a lot of complex reasons, one of them simply being that we are wealthier then we used to be, so we have more demand, without the supply being able to increase as fast. And the demand also rises because of new drugs and health care technology and techniques. Since we can do more we have more that we want. Another reason is that for the most part people don't pay directly for their own health, and so have less or sometimes no incentive to push hard for cost reductions. Another (related to the "we're getting wealthier issue", perhaps just a specific version of it) is that productivity in health care hasn't climbed as fast as productivity in other areas. We've grown scores of times richer then we used to be ( upload.wikimedia.org ) but a doctor can't treat scores of times as many patients. A lot of these factors will continue in to the future, so health care costs (even as a % of the economy) will probably grow, OTOH health care becoming unaffordable will provide a braking effect on the trend. If prices rise demand drops, even for health care. Health care demand may be more inelastic then many other things (people don't want to die or be horribly sick, and will make strong efforts to get treatment when they need it) but its still not immune to market forces. Higher prices reduce demand which puts downward pressure on prices. Overall I disagree with your looming disaster scenario. Foreseeable problems? Yes, perhaps even serious problems. Big disaster? I disagree.

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