A Problem Even Worse Than the Budget Deficit

Moneybox
A blog about business and economics.
Feb. 3 2013 10:09 AM

A Problem Even Worse Than the Budget Deficit

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A girl and her grandfather

Photo by Goh Chai Hin/AFP/Getty Images

Listening to folks in the national press, it's often hard to believe that anything could be more alarming than the long-term fiscal sustainability of America's retirement programs. But it turns out that some things are even worse than the budget deficit. Catherine Rampell discovers, for example, that sometimes people get laid off and even get sick and die:

New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.
“If I break my wrist, I lose my house,” said Susan Zimmerman, 62, a freelance writer in Cleveland, of the distress that a medical emergency would wreak upon her finances and her quality of life. None of the three part-time jobs she has cobbled together pay benefits, and she says she is counting the days until she becomes eligible for Medicare.
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It really can't be emphasized enough that this is the precise inverse of the entitlements problem. Failure to provide adequate social services to unemployed 61-year-olds not only saves money because you don't need to pay for the benefits, it saves even more money when it leads to that guy dying at 71 rather than 74. To some, those are three extra years to spend with your grandkids. But to the Congressional Budget Office, that's just more Social Security checks and more Medicare bills.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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