1. In Chapter 5, Miller introduces the components of spending by our government.
The four major components are Medicare, Health, Social Security and National Defense.
a. Of the four listed above, which components are likely to increase/decrease.
Distinguish between a change in dollar terms versus a change in its contribution to overall spending. For example spending on Health might decline in dollar terms however, if all other categories also decline in dollar terms, Health's contribution to the overall spending as a percentage might remain the same.
b. Choose one of the components and explain the underlying economics and/or demographics that would lead to its becoming a larger (smaller) percentage of the budget over the next decade or so. Explain your answer and document with support from at least one outside source other than the text book.
2. New York Times, October 10, 2014, "Heavier Babies Do Better in School".
Students as a follow up to our discussion on government expenditures, this article quotes some interesting statistics on health care costs.
Armed with reams of evidence, the reformers began pushing hospitals and insurers, including Medicare, to change. In the private market, among other things, insurers have excluded some high-cost doctors from their networks. For all the problems and waste that still exist, the effort has had an effect: Health costs have slowed sharply in the last several years, surprising nearly every expert. Remarkably, per-person spending in Medicare is on a pace to be about 6 percent lower this year than it was three years ago.
It’s impossible to know whether the trend will last. But Obamacare, while not the main reason for the slowdown, may be sustaining it. Even as the law has added people to the health-insurance rolls, which increases costs, it has also targeted unnecessary, expensive care.
Whether the slowdown will continue is among today’s biggest economic questions.
Yet the economic implications aren’t even the most important ones. The health implications are. The idea that we can be healthier with less health care is no longer just wishful thinking; it’s a serious theory, with growing evidence.
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1. Components of Government Spending:
a) The main components of spending by the federal government in 2012 were National defense that accounted for 19%, social security that accounted for 22%, Healthcare (which included Medicare and Medicaid) was at 24% of the government spending; the net interest on loan payments was 6% and all other spending was at 29%. (Report, 2012). However some components of this has increased in 2014 while others have decreased. The National Defense spending has decreased to 18%, while the social security has increased to 24% (this might be due to baby boomers); the Health care has remained constant at 24% and the interest on debt has increased from 6% to 7%....
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