Life Extension and the Budget
By Arnold Kling
Life expectancy for Americans by 2050 will surpass government projections by as much as eight additional years for women and five for men,
This is good news. The trend is not just for death to be pushed back, but for the infirmities of old age to be pushed back. The additional years are likely to be quality years, rather than additional years in the old age home.
Of course, it has horrid implications for Social Security, with its fixed retirement age. People will be collecting benefits much longer.
There are two reforms that must take place in order to fix the long-term U.S. Budget outlook.
1. Social Security benefits have to be indexed to longevity. That is, the age of eligibility should rise about 3 months per year, which is the average rate of increase in longevity. It needs to be increased faster if we get better at extending life.
2. Medicare needs to be converted to a voucher, rather than a reimbursement system. That way, the growth in spending becomes controllable and finite, rather than the opposite.
Relative to these two ideas, every other fiscal reform I have seen discussed falls far short of solving the problem.