But in politics, change is less certain though no less necessary. Under present policies, CBO projects that to rise to 13 percent of GDP by 2020, a 63 percent increase. Social Security hits 6 percent of GDP, Medicare 5 percent and Medicaid 2 percent. In practice, we may do all four. We need to redraft the generational compact.
Workers support retirees.
To pay future benefits entirely by taxes would mean huge increases for workers. This is neither defensible nor desirable. Two arguments are standard. Second, the old could not plan for their retirements because they did not know how long they would live. A prudent person now plans for a long retirement.