The world's largest banks responsible for the 2008 financial meltdown led to a massive increase of government debt after they were bailed out, and now Medicare faces mounting pressures due to the fiscal irresponsibility of those banks, according to an article in the New York Times Economix blog.
Simon Johnson, PhD, professor of entrepreneurship at the Massachusetts Institute of Technology, wrote that in January 2008, before the financial collapse actually occurred, the Congressional Budget Office expected government debt would be around 20 percent of gross domestic product by 2018. In August 2009, the CBO updated that figure to 70 percent of GDP by 2018.
Dr. Johnson said a potential Medicare issue was looming at that time anyway, due to the baby boomer generation, increase in life expectancy and inability to control healthcare costs. However, the banks and subsequent crisis blew up the government debt and indirectly imperiled public programs like Medicare.
He wrote that although the financial crisis of 2008 seems to be far behind us now, the adverse consequences of a shrunken Medicare program could be a lingering byproduct for many years. "The worst is yet to come," Dr. Johnson said. "When you are 85 and cannot afford decent healthcare, think about the banks."
Simon Johnson, PhD, professor of entrepreneurship at the Massachusetts Institute of Technology, wrote that in January 2008, before the financial collapse actually occurred, the Congressional Budget Office expected government debt would be around 20 percent of gross domestic product by 2018. In August 2009, the CBO updated that figure to 70 percent of GDP by 2018.
Dr. Johnson said a potential Medicare issue was looming at that time anyway, due to the baby boomer generation, increase in life expectancy and inability to control healthcare costs. However, the banks and subsequent crisis blew up the government debt and indirectly imperiled public programs like Medicare.
He wrote that although the financial crisis of 2008 seems to be far behind us now, the adverse consequences of a shrunken Medicare program could be a lingering byproduct for many years. "The worst is yet to come," Dr. Johnson said. "When you are 85 and cannot afford decent healthcare, think about the banks."
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