The tallest female econ blogger (and smart and charming in person) Megan McArdle is appalled about Medicare spending.

Our nation's lack of action on Social Security is appalling. Not because it is going to bust the budget--it is going to become a very large, but still supportable, drain on resources. No, the reason it is appalling is that the structural incentives built into Social Security substantially depress labor force participation in a way that makes it harder to pay for Social Security, and especially health care.

But if Social Security appalls, Medicare quite stops the heart. We've seen this moment coming for twenty years and done nothing. Now it's here, folks: Medicare goes into deficit this year. For the first time, the general fund will be sending money to the entitlement programs, not the other way around. And that deficit will keep growing, and growing, and growing . . .

Megan is upset that George W. Bush has done so little about the approaching financial catastrophe. But if we'd had a Democrat in the White House the last 7 years I doubt the outcome would have been any better. The Democrats don't want to admit to the size of the problem because to do so brings up the possibility of scaling back the entitlements commitment. Well, the Democratic Party defines itself as the defender of necessary and justified and just totally beneficial entitlements spending. Megan acknowledges the assortment of forces that come together to cause this clusterfrack. Click thru and read about it.

The fact of the matter is that the currently old oppose reforms because they don't want to see their benefits cut or taxes raised. They figure they can get what they want and leave the bill for latter generations. Their voting power has been strong enough for enough years to assure that they get to shift huge costs onto later generations.

But I think the outlook for the entitlements programs is worse than most of the serious analysts believe. Rising energy costs could hold back economic growth for much of the next 10-15 years. The entitlements costs will then become a larger percentage of the overall pie as the absolute pie slices for Social Security and Medicare grow while the pie size stays the same.