A new study from the Center for Economic and Policy Research reveals that the $62 trillion 'intergenerational debt' figure most often discussed in policy debates is due almost entirely to spiraling private-sector healthcare 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," claims that the projected debt burden is not a matter of money transferred from younger generations to older generations. Instead, it says 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 healthcare 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, they say.
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 exceed its tax burden.
In other words, the authors note, 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 healthcare costs in the U.S. are projected to vastly outpace the rate of income growth.
CEPR conducts both professional research and public education. The organization's research is oriented towards filling gaps in the understanding of particular economic and social problems, or the impact of specific policies.
CEPR was co-founded by economists Dean Baker and Mark Weisbrot. The group's Advisory Board includes Nobel Laureate economists Robert Solow and Joseph Stiglitz.