Ezra Klein uses this chart from the CBO to illustrate the point that "Medicare and Medicaid aren't in any unique distress -- that their cost problems are a function of health inflation across the whole economy, not just in government programs, and that to get their growth under control will require wholesale reform." To play devil's advocate for a bit, though, one can imagine a scenario in which the economy grows fast enough between 2007 and 2082 for the non-health care sector of the economy to grow notwithstanding the vast growth in the share of the economy going to health care. Indeed, if we keep up a two percent annual growth rate (which would be on the slow side), the size of our economy will double in just 35 years. So there's plenty of room for health spending to escalate enormously as a share over the next 75 years without that actually reducing people to penury.
When it comes to public sector programs, by contrast, there's an argument that if the share of GDP that's going to taxes goes that high, it'll destroy the economy. Incentives, deadweight loss, etc. I don't know that I really think that's the case, but that's the argument you would hear for why runaway Medicare and Medicaid growth is a special kind of horribleness.
Now for my view, there's little evidence that health care spending really helps people, so it really would be a shame -- albeit a survivable one -- for health spending to grow on this trajectory. On top of that, there's good reason to believe that the most effective method of radically restraining health care spending is through full-bore socialized medicine as in the UK's National Health Services. UK health care is slightly worse than what you can get elsewhere, but it's way cheaper and UK health outcomes aren't wildly worse than outcomes anywhere else. Save money by providing universal mediocre health care, à la NHS, leave some of the savings in people's pockets and spend the rest on subsidizing mass transit and bike paths. Or to look at it another way, if Hillary Clinton's entire agenda were enacted, her climate change proposals would wind up doing more to improve public health than would her health care proposals.
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