Posted on 01/17/2004 5:13:52 PM PST by qam1
The implementation of a prescription drug program for Medicare is the capping of years of selfishness on the part of elderly Americans -- and their baby boomer enablers -- who seem intent on bankrupting the government and padding their retirement pockets despite the fiscal and social cost to young Americans. Congress intended Medicare and Social Security to be the equivalent of Linus's security blanket, something to help the poor and middle class when they stopped working to ensure they lived decently and had access to healthcare.
It was not intended to pay all their bills.
American's elderly now demand that the U.S. government give them what amount to handouts, the Medicare program expansion being a prime example of the efforts by politicians to feed the retired voter beast.
After all, it won't matter to them given that most of the currently retired will be dead by the time the costs become too hard to manage.
Why does this matter? The answer lies in the ever-burgeoning federal budget deficit and fiscally unsound Medicare and Social Security programs.
In 2004, the federal government is expected to spend more than $500 million than it raises in revenue, the highest level ever.
Estimates based on reasonable assumptions project the deficit to widen to $700 billion a year by 2014 and continue upward as the baby boomers retire and take an ever-increasing portion of the federal budget pie in the form of entitlement payments from Medicare and Social Security.
This is important because federal spending and taxation have a large impact on the economy and more indirectly on the lives of U.S. citizens.
Federal spending on Medicare and Social Security -- the two main federal entitlement programs for the elderly -- currently account for more than 35 percent of all federal spending with some estimates placing such spending at more than 70 percent of the budget by 2060.
This is a mind-boggling amount given the relatively meager intent of these two programs at their inception.
When Social Security was implemented in 1935, few even lived to collect the program's payout for very long. But thanks to medical and other advancements, life expectancy in the United States now averages more than 77 years.
The Congressional Budget Office has projected that even if medical care costs -- a major driver of federal expenses in these areas -- rise 1 percent faster than per capita gross domestic product, federal expenditures under Social Security, Medicare, and Medicaid would rise from 9.0 percent of GDP in 2010 to 14.3 percent in 2030 and to 17.7 percent in 2050.
Medical costs are on an upward spiral, rising faster than GDP each year since 1970, making the 1 percent estimate likely very low.
Who will pay for these increases? The answer is workers too young to retire and at unfathomable tax rates that are not sustainable.
Payroll taxes will have to more than double by 2040 to provide all the current obligations under social security.
Medicare is expected to be an even greater fiscal burden over time.
While Social Security benefit qualification has been raised to 67, it remains 65 for Medicare.
David M. Walker, comptroller general of the United States, told a congressional committee in 2001 that restoring the solvency of the Medicare program for the next 75 years would require a 37 percent cut in benefits, tax increases of 60 percent or a combination of the two.
Waiting to fix the problem just increases the costs.
Walker noted then that postponing action until 2029 -- current estimates place the pending insolvency of the program at 2026 -- would require payroll taxes to double or a reduction of benefited by more than half.
Those numbers do not even incorporate the increased costs associated with the prescription drug benefit program, which are expected to balloon from the initial $400 million over the first 10 years to an estimated $2 trillion in the second decade.
All of these costs will serve only to increase the deficit, which is already higher than lawmakers and the Bush administration like to let on, because part of it is paid down from the surpluses created from taxing workers to fund Social Security.
Removing that spending from the 2004 budget would make the deficit higher than the $500 billion mark commonly cited.
But as the population ages and the baby boom generation retires there will be less and less people paying for retirement age programs, reducing the available Social Security surplus and eventually resulting in a tax structure unable to fully fund the program.
Starting in 2012, Social Security will start to pay out more in benefits than it collects in revenues, making the deficit skyrocket without major cuts in spending.
While there has long been a contingent in Washington that argues for a so-called Social Security "lock box" to keep those funds from being used on other forms of federal spending, the idea of saving the funds to deal with future shortfalls in the program has never caught fire legislatively.
Since Bush took office in 2001, the president and the U.S. Congress have used around $160 billion a year in surplus Social Security taxes to fund the government. Bush White House budget plans show that the use of these funds increasing in coming years.
The idea is that this money should be used on current needs. But this concept has problems because such decisions are not being accompanied by other hard-to-make decisions impacting the future of the program.
There is also the issue of funding the federal government with more regressive payroll taxes -- which impact all workers the same way -- while decreasing income taxes, which disproportionately helps the rich.
This point aside, the tactic cannot last.
Not only is it intellectually dishonest to keep the federal fiscal process on a illogical plane that lawmakers exploit for their political advantage, it is not possible to continue as the surplus will dry up.
While politicians like to conjure the image of poor seniors eating cat food to survive and not receiving basic medical care, this is just not the case overall.
Since 1974, the poverty rate among seniors has been lower than the population as a whole.
Some cuts were made in Social Security to stave off impeding doom in the 1980s, but in the case of Medicare, benefits continue to expand.
Some Democrats are already vowing to increase the prescription drug program, which they feel is too limited in its scope.
Unless substantial cuts are made in social programs, homeland security, and on international operations like the U.S. occupation of Iraq, cuts will have to be made in Social Security and Medicare or taxes raised to meet the fiscal demands.
This is the reality, but given the political danger associated with these solutions, don't expect them to be enacted anytime soon.
The kinds of market-based and industry-friendly proposals favored by the Bush administration and Republican leadership in Congress -- such as the use of Medical Savings Account and imposing caps on medical malpractice lawsuit payments -- are problematic.
For example, a new CBO analysis found that limiting physicians' malpractice liability would do little to hold down healthcare spending.
At the same time the chance of Democrats leading a great reforms of the programs from within seems unlikely, even if they manage to recapture the White House and both houses of Congress in the not-to-distant future.
That is too bad because expanding Medicare and Social Security costs will only contribute to the size of the federal deficit, hurting everyday Americans.
While there is disagreement as to specifics, the conventional wisdom among economists is that good government spending choices often strengthen the economy while bad ones weaken it.
The largest federal deficit in history, no matter through what ideological lenses one looks at it through, will cause nothing but problems in the end by weakening the overall economy and slowing economic growth.
A recent report by the non-profit, non-partisan think tank Brookings Institution estimates that by 2014, the average family income will be $1,800 lower because of slowed economic growth resulting from the current deficit.
The reasoning is that increased federal borrowing from foreign lenders and the government's competing with the private sector for a limited pool of savings will serve to drive down the economy.
In addition, persistent high deficits can lead to higher interest rates that increase borrowing costs for individuals and decrease the value of the dollar.
This makes imported goods more expensive and can decrease direct foreign investment in U.S. markets.
If the Bush administration is really interested in helping all Americans, it should address the funding problems of retirement programs now and not place them on the shoulders of the nation's youth and future presidents
Ping list for the discussion of the politics and social aspects that directly effects Generation-X (Those born from 1965-1982) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details.
In a very few years,the "Baby Boomers"-who screamed and railed about social security,etc.,etc.,will be singing a brand new tune : "Where's my check ? " - as will,in all probability,the writer of the quoted article.
Assuming the writer is from Gen-X or Y I don't think so because SS will be long since bankrupt when she retires.
But that's why Hillary Clinton's health care failed, It was too early all the baby boomers were employed so they rejected it but just wait in a few more years when the Baby boomers who haven't saved or prepared retire then they will be demanding it
Yeah we are in trouble. One thing also to watch is spending on education. It's already happening now but when the baby boomers retire there is going to be a big demand to shift more and more of the burden of funding to the state level. Which since a lot of states get their money via income tax it would mean they being retired would pay less and less for eductaion since they are no longer working.
In a very few years,the "Baby Boomers"-who screamed and railed about social security,etc.,etc.,will be singing a brand new tune : "Where's my check ? " - as will,in all probability,the writer of the quoted article.
Exactly; and who can blame us. I've been FORCED to pay into the bullshit SS system since I was in my late teens and I want my F'n money. They can give it all to me (plus interest)in one lump sum and I will find my own health care!
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years."
Alexander Frasier Tytler, The Decline and Fall of the Athenian Republic," 1776.
The framers of the US Constitution, the greatest group of men since the twelve apostles, repeatedly warned against democracy. They knew their history and understood human nature and realized that a democracy will inevitably self-destruct. A democracy will destroy itself not just economically, but morally degenerate into anarchy -- read the Greek philosopher Plato's description of a democracy in The Republic written in the 4th century BC. You would think he was describing the culture of the contemporary West.
Yes, the problem with predicting gloom and doom is that the circumstances are constantly changing.
True, my father will receive more in SS dollars than he contributed. But I have not started receiving and I have contributed the max each year of my employment for 36 years. But clearly the system will change to avoid bankruptcy as my generation retires and reaches SS collection age, so the threat of the elderly voting themselves the treasury of the United States is just a news worthy headline.
How these government subsidized programs are fixed depends on who is in power when the time to fix them arrives. I hope it is some form of capitalism that survives.
Many people having been saying that for years -- every good reason for abortion is an equally good reason for euthanasia. Now, in this country at least, euthanasia may never been legal, but even now, and more so in the future, huge numbers of elderly people will no one able or willing to take of them. They can be quietly gotten rid of one way or another, either through active or passive euthanasia, and who would care?
What goes around comes around.
The anti's are ALWAYS telling us that smoking KILLS. So........how is anyone who smokes going to be a burden on ANYONE? eh!
no. surge of newly legalized and therefore social-security-supporting immingrants will be footing the bill.
Yeah. They're eating up the Fruit Cups, devouring In The Heat of the Night reruns, I tell ya we're gonna all end up broke!
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