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Will Social Security and Medicare be all right after all?

Published: Monday, June 3 2013 12:35 p.m. MDT

American economy Nobel Prize laureate Paul Krugman talks to journalists during a news conference before being awarded an Honoris Causa degree by Lisbon University, Lisbon Technical University and Lisbon Nova University Monday, Feb. 27, 2012 in Lisbon.

Francisco Seco, Associated Press

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The Congressional Budget Office released their projections of debt and deficits last month, and according to Paul Krugman at the New York Times, the only thing they seem to project is that everything will be reasonably alright.

Krugman uses the information given in the release to show how both Social Security and Medicare are likely going to continue just fine, despite calls to the contrary. “Start with Social Security. The retirement program’s trustees do foresee rising spending as the population ages, with total payments rising from 5.1 percent of G.D.P. now to 6.2 percent in 2035, at which point they stabilize. This means, by the way, that all the talk of Social Security going 'bankrupt' is nonsense; even if nothing at all is done, the system will be able to pay most of its scheduled benefits as far as the eye can see.”

Even Medicare, while expected to rise around 3 percent of the nations GDP over the next few decades, is still a smaller increase than previously expected. “The answer is that the long-term upward trend in health care costs — a trend that has affected private insurance as well as Medicare — seems to have flattened out significantly over the past few years. Nobody is quite sure why, but there are indications that some of the cost-reducing measures contained in the Affordable Care Act, aka Obamacare, are actually starting to 'bend the curve,' just as they were supposed to. And because there are a number of cost-reducing measures in the law that have not yet kicked in, there’s every reason to believe that this favorable trend will continue.”

Freeman Stevenson is a Snow College grad and is the DeseretNews.com opinion intern. Reach me at fstevenson@deseretdigital or @freemandesnews

Read more about Medicare and Social Security's future on New York Times.

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