EVERYONE SHOULD READ THIS ARTICLE BY KD, and the other ones he has about this debacle that is bankrupting us.
The entire problem with our budget lies in Medicare and Medicaid. The reason is multi-fold but is focused in the following places:
The Medicare tax rate is 2.9%, (1.45% each for employer and employee), or less than one quarter of that for Social Security. Yet last fiscal year Social Security spent $1.03 trillion while Medicare and Medicaid spent $1.46 trillion with approximately $1.15 trillion being Medicare. In other words Medicare assesses taxes at less than 1/4 the rate of Social Security yet pays out more money.
Medical spending as a percentage of the national economy has increased by a factor of five since Medicare was put into place. Medical spending was approximately 4% of GDP in the 1960s; at 4% of GDP Medicare was sustainable indefinitely as its tax receipt projections were approximately correct in covering expected expenditures. Medical spending is almost 20% of GDP today, or five times as high in percentage terms. Yet the Medicare tax rate has not advanced at all. It would have to be five times what it is today, and advance at the rate of medical spending generally indefinitely into the future, to be solvent.
If is not possible to “catch up” now even if you immediately made the Medicare tax 15%, which would be higher than Social Security, because those who are retired now didn’t pay the higher rate and the bonds were not bought with their funds. As such it is flatly impossible to fix this on a prospective basis through higher taxes. IT CANNOT BE DONE BECAUSE TOO MUCH TIME HAS PASSED WITHOUT DOING IT OVER THE LAST 30 YEARS.
Medicaid is even worse because there no tax assessed to cover it. That is, Medicaid is a “pure” entitlement and last year spent approximately $400 billion. You get it because you’re low-income, not because you paid into it while working and now need it. For this reason you cannot fix Medicaid with any sort of targeted, employment-based tax because there isn’t one and the regressive nature of such taxes means people will leave the workforce to avoid paying same and then collect it. In fact that has happened now and continues to this day.
https://market-ticker.org/akcs-www?post=234584
How about we simply start with throwing all the ILLEGALS off of Medicare and Medicaid??