SOURCE: Milken Institute

April 24, 2008 09:00 ET

Medicare and Social Security Costs Threaten Living Standards of Working Americans, Warns Sylvester Schieber in the Latest Milken Institute Review

LOS ANGELES, CA--(Marketwire - April 24, 2008) - Medicare and Social Security have long been viewed as the third rail of American politics. But Sylvester Schieber, chairman of the Social Security Advisory Commission, argues that neglecting reform of these huge and rapidly growing "entitlements" is setting the stage for intergenerational warfare.

"Tinkering at the margins or appointing yet another blue ribbon commission isn't going to get us out of this mess."

Also in this issue, Eswar Prasad of Cornell explores the paradox of poor countries financing Americans' habit of shopping 'til they drop.

"Rather than asking whether 'uphill' capital flows reflect irrational behavior, it would be useful to ask what these seemingly perverse international financial flows are signaling about more basic problems in the institutions buttressing the world economy."

Other highlights from the new Review: Diana Farrell and Susan Lund of the McKinsey Global Institute preview the financial tsunami now building in the Persian/Arabian Gulf.

Steve Cecchetti at Brandeis University's International Business School tackles the question of how the Federal Reserve should react to real estate and stock market bubbles.

Larry White at New York University's Stern School of Business assays the newly visible role of Fannie Mae and Freddie Mac, the giants astride the mortgage market.

G. Pascal Zachary, a former foreign correspondent for The Wall Street Journal, turns a skeptical eye toward crash efforts to provide universal primary education in Africa.

Jim Barth, Tong Li, Triphon Phumiwasana and Glenn Yago of the Milken Institute put the subprime market meltdown in perspective.

This issue's book excerpt is from David Dranove's "Code Red," an economist's look at how to reform health care in the United States without destroying it.

The Milken Institute Review is sent quarterly to the world's leading business and financial executives, senior policy-makers and journalists. Its editor is Peter Passell, former economics columnist for The New York Times.

About the Milken Institute: The Milken Institute is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. It is based in Santa Monica, CA. (

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