The recent Nobel Prize winner, Angus Deaton, in his book, The Great Escape, writes:
The very wealthy have little need for state-provided education or health care; they have every reason to support cuts in Medicare and to fight any increases in taxes. They have even less reason to support health insurance for everyone, or to worry about the low quality of public schools that plagues much of the country. They will oppose any regulation of banks that restricts profits, even if it helps those who cannot cover their mortgages or protects the public against predatory lending, deceptive advertising, or even a repetition of the financial crisis.
I challenged this view here. But even aside from whether he's right factually, would it be bad if the very wealthy did support cuts in Medicare?
Russ: You suggest that a girl today born, I think, you said in the United States, has a 50-50 chance of reaching 100 years old.
Deaton: Yeah. That's a guess but it's not an unreasonable guess. One of the things about projecting mortality like that is that it obviously depends if the girl is born today and she gets sick when she's 50, what sort of medical technology, what sort of things we know then which will help her get through that. And of course we don't know that because it's 50 years down the pike. But there's been a lot of progress over the last 50 years, and if that goes on, that's not an unreasonable supposition.
So . . . what are the implications of that much higher life expectancy for spending on Medicare, a program for which people qualify at age 65? Also, although Deaton did not complain about how he thinks rich people will or will not support Social Security cuts, I would guess he thinks that they would support cuts and I would guess that he thinks that's bad.
So if Deaton is even close to right on life expectancy, we will have even huger Social Security and Medicare spending problems than the federal government now projects. I don't have his confidence that rich people will support Medicare cuts. But if they were to do so, and if they were also to support cuts in Social Security, that strikes me as fiscally responsible and good rather than bad.