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Private Health Care Costs Driving Force Behind Debt Burden

Washington – While there is much talk of intergenerational debt among DC political insiders, few people have an understanding of the debt figures discussed in current policy debates.

Washington While there is much talk of intergenerational debt among DC political insiders, few people have an understanding of the debt figures discussed in current policy debates. A new study from the Center for Economic and Policy Research (CEPR) shows that the $62 trillion figure most often discussed is actually due almost entirely to spiraling private-sector health care costs.

“It would be dishonest to portray projected debt levels as an issue of intergenerational equity,” said Dean Baker, an author of the report and Co- Director of the Center for Economic and Policy Research. “The problem is a broken healthcare system.”

The report, “Taming the Deficit: Saving our Children from Themselves,” shows that the projected debt burden is not a matter of money transferred from younger generations to older generations. Rather, this figure is a measure of debt that is largely costs that young people are expected to run up. The authors of the study point out that projections of private-sector health care costs are likely to grow considerably larger in the near future. These costs will become unsustainable if they continue to rise at the rates we see under the current structure of existing programs.

Net Lifetime Federal Benefits https://www.cepr.net/index.php/publications/reports/taming-the-deficit/

The study analyzes projected lifetime benefits for eight age cohorts from those aged 55-64 through those born in the years between 2013-22. The findings show that each cohort is projected to receive benefits that far more than its tax burden. In other words, the main reason future benefits are projected to exceed the taxes paid by today’s young and those yet-to-be-born is that private health care costs in the U.S. are projected to vastly outpace the rate of income growth.

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