Last week, Paul Krugman wrote about Medicare saving money, specifically critiquing Sen. Lieberman’s proposal to “save Medicare”.
Two days later, Senator Lieberman responded in a letter to the editor:
In his June 13 column, “Medicare Saves Money,” Paul Krugman criticizes my proposals for bringing Medicare back to fiscal balance based on the argument that Medicare costs less than private insurance. That’s like boasting how good a deal you got on your car as you drive it off a cliff. The point is that Medicare will soon be insolvent — in 2024, if not sooner — and the government can’t afford to bail it out, no matter how relatively cost-efficient it is.
When Medicare began in 1965, the average lifespan in America was 70. Today it is 78. According to the Congressional Budget Office, phasing in an increase in the eligibility from 65 to 67, as I proposed, saves the government $125 billion over 10 years and reduces Medicare spending by 7 percent by 2035.
Unfortunately, there are some serious holes in Senator Lieberman’s arguments. They just happen to be the topic of my latest piece at CNN.com. Go read it!
Update: They really shrunk my chart. Here it is, if you can’t see it well there: