Healthcare costs are ballooning more and more every day. Social Security payments seem to be getting smaller and smaller. Over the next decade, spending for both of these is going to double from what is already being spent. This would bring the spending to $3.2 trillion per year over the next decade. This would severely increase the national debt unless something is done to slow the spending down.
The Congressional Budget Office (CBO) warned that unless cuts in spending were made elsewhere to alleviate the extra spending on these two topics, the national debt would sharply increase after 2023. This may seem like a long time from now, but the effects would be extremely damaging to the economy.
The CBO says that if the government and President Obama can come up with a plan and outline the plan now, it will give businesses time to look over their business models and be prepared for what is to come. This may help to cushion the blow should it hurt the economy. At least people could be prepared for what is to come.
Healthcare spending in 2012 alone was $885 billion, while Social Security and Medicare/Medicaid was $1.6 trillion. The changes in the Medicaid program and the expansion of healthcare reform are expected to reach 38 million people when they are implemented in January of 2014. The cost is expected to be $1.3 trillion over the next ten years.
Medicare is expected to cost $1.1 trillion over the next ten years. They are also predicting that there will be healthier and younger people enrolling in Medicare in the coming years, so the spending may not be as high as it currently is. Although spending for Medicare and Medicaid is expected to jump, the growth of the programs is going to slow over the next decade.
All of this spending and increase in the national debt could affect the economy very negatively, especially for future generations.