A Problem with Medicare

In “Let's Begin Obama's 'Conversation' on Entitlements,” the Wall Street Journal identifies a major problem with Medicare.

According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.

And don't let that figure get your hopes up, because even that $109,000 is not available today. That money was spent long ago. The government's trust funds are a fraud. Indeed, by some large amount, society missed out over many decades on domestic savings and investment that would have taken place had workers not been relying on unfunded government promises to support them in retirement.

There are only four solutions: raise taxes, cut benefits, reform Medicare, or some combination of the other three.