If you think the U.S. faces fiscal challenges now, just wait until the bulk of the Baby Boomers start retiring and, worse, begin to suffer from chronic diseases like Alzheimer's and diabetes at record levels, as well as start dying in intensive care units.
It's hard to overstate the magnitude of expense coming as the health of the largest generation in history begins to seriously deteriorate. There are now about 49 million on Medicare. By 2035, that program will be covering the health costs of 85 million people.
This explains why, during this same period, according to the CBO, spending on government healthcare programs is projected to double -- from 4 percent of GDP to 8 percent.
Interest payments on the national debt will also double by 2038, approaching $1 trillion a year. As I have noted here, CBO projections show that spending on entitlement programs for seniors and interest payments will consume 22 percent of GDP in 2038 -- the same share of national wealth that the federal government currently spends on all functions.
These long-term projections involve a lot of guesswork, and things could turn out a lot better if the economy surges and the U.S. embraces liberal immigration policies. But things could also go worse, with the scariest variable being a big spike in federal borrowing costs.
All of which is to say that Washington's fiscal hawks are, at core, not crying wolf, even if they warp many of the details. The fiscal challenge is real and accelerating. This challenge has little to do with Social Security, which can be fixed with nips and tucks. It has little to do with taxes, which can and should be raised substantially, but even then would only make a dent in the challenge. Long term, it has little to do with growth, since massive fiscal gaps loom even under the kind of rosy scenarios that could be possible with big new public investments in human and physical capital.
It's all about healthcare for the Boomers.
And that's why only progressives can tackle our long-term fiscal problems. Providing healthcare for an additional 35 million old people who are declining and dying without going broke as a nation will require a radical remaking of America's healthcare system -- and medicine itself -- to both radically increase efficiency and fundamentally change cultural norms about how hard our society should fight death.
Incrementalism in the form of Obamacare isn't going to cut it. And while conservatives claim that huge new doses of competition can lower costs, there is little evidence to this effect and the competition solution remains largely a libertarian theory.
There is only one way proven way to really stretch healthcare resources, and that is government dominance of the healtchare sector. All other wealthy countries spend far less of their gross domestic product on healthcare -- between 8 and 11 percent, compared to 16 percent in the United States. Likewise, in all these countries, government dominates the healthcare market, accounting for the vast majority of healthcare expenses.
Of course, though, only progressives will ever support government dominance of healthcare, which is why only progressives can truly tackle our fiscal challenges.
What's scary, though, is that even ushering in a single-payer system would not fully solve the problem. Because every other advanced country has also experienced substantial increases in healthcare costs as a share of GDP over the past few decades, and those increases will continue as populations age everywhere.
So ultimately, the culture around medicine must also change, with American doctors backing away from their reflex to fight death and aging at any cost. Progressives, with their focus on the common good, are more likely to push the medical establishment in that direction than conservatives, with their focus on individual choice and letting the market sort things out.
The fiscal issue is now largely owned by the right, which routinely misdiagnoses the problem and proposes solutions that entail short-term pain for vulnerable populations that won't actually address the long-term challenges.
Progressives need to take this debate back at some point, and begin pushing the only solution that actually will work.