Posted on 03/17/2008 10:56:14 AM PDT by InvisibleChurch
Ask Alan Greenspan what he considers the greatest threat to the U.S. economy, and he will answer immediately with a single word: Medicare. Sometime in the next President's first term, Medicare Part A will go cash-flow-negative, and it's all downhill from there, says Fortune magazine.
Medicare provides a wide range of services and subsidies to more than 40 million old and disabled Americans. As the country ages, Medicare and Medicaid (for those of any age with low incomes) will devour growing chunks of U.S. economic output. So will Social Security, but its cut of gross domestic product (GDP) should stop increasing around 2030, says Fortune:
The federal budget has averaged about 18 percent of gross domestic product (GDP) over the past several decades. If that average holds and if the rules of our social insurance programs don't change, then by 2070, when today's kids are retiring, Medicare, Medicaid, and Social Security will consume the entire federal budget, with Medicare taking by far the largest share. But wait -- the situation is actually much worse, says Fortune:
Those estimates, reported in the latest Financial Report of the U.S. Government, assume that Medicare payments to doctors will be slashed drastically, by some 41 percent over the next nine years, as required by current law. It won't happen, says Colvin. Every year for the past five years, Congress has overridden the mandatory cuts. As for future cuts, the Financial Report says, reductions of this magnitude are not feasible and are very unlikely to occur fully in practice. So in reality, Medicare will go into the hole even faster than official projections reflect. If Medicare had to be accounted for like a company pension fund, it would be underfunded by $34 trillion. Obviously those long-term scenarios won't happen, because they can't happen -- we won't be shutting down the Army, Navy and so on. But it's easy to see why the candidates don't want to discuss it, says Fortune.
Source: Geoff Colvin, "The $34 Trillion Problem," Fortune, March 4, 2008.
For text:
http://money.cnn.com/2008/03/03/news/economy/104239768.fortune/index.htm?postversion=2008030405
For more on Federal Spending & Budget Issues:
http://www.ncpa.org/sub/dpd/index.php?Article_Category=25
Medicare and SS will not blow up in a traditional sense. No politician can vote against these programs especially with the baby boom generation beginning retirement. Boomers have paid enormous sums to fund these programs for their parents and grandparents. It is the arrogance, ignorance, and entitlement mentality of the elderly who have demanded these programs without regard to consequences to the next generation. The boomer generation has been foolish and naive not to demand substantial changes to these programs.
We are seeing in a small way the possible future of these programs. Devaluation of the dollar, inflation, and slow economic growth. With the coming orgy of new domestic spending and much higher taxation, we may see economic upheavals.
The way that Medicare may be curbed is through a complete single payer system similar to Canada’s. A single payer system means central budgeting for health care costs. Health care will be rationed and the elderly will bear the brunt of the rationing. If I were a senior now, I would dread socialized medicine. It is a sure recipe to cut health spending on the elderly.
Nope. Can't do that. Wouldn't be prudent.
The Dims & RINO's will keep giving away your tax dollars in those ponzi schemes until war is declared, by the young, against the elders.
One thing is quite certain ... Congress needs to be ridden out of town on a rail, followed closely by the inhabitants of the WhiteHouse, and some of those will require tarring with a feather applique.
Memo to those who hate Boomers (largely those who hate their parents):
We've been f****d for decades. No one noticed until the gorilla in the room got older.
The geezers before us set this s**t up. We paid for it, NOW suddenly we're the problem now that there is not 12 workers for every beneficiary.
I don't want SS OR Medicare. Can someone tell me how I can get my money back from the last 35 years of work? Better yet, can someone please tell me how I won't have to pay 12.6% for the next 20 years?
Muslim Andre Carson just won the special election for US House of Representatives here in Indiana.
The thrust of his campaign was “saving Social Security and Medicare for seniors”
What a crock of schnitzel.
Yep. I will start increasing soon, possibly to 20% by 2020!
Congress can just take out an IOU from Social Security
(you never have to pay it back, no interest), problem solved, as they raise SS taxes from employer/employee.
I had to sign on to S/S in the 1950's. It was a contract we couldn't avoid, and I damn well want those political government hacks to honor it.
I don't care what old geezers want. They are like kids ... give me more ... more ... more.
We (this country) needs some stand up men that will do what is right, and make the necessary changes needed to get us back on track.
Kind of like the "watering of the tree of Liberty" changes.
ΜΟΛΩΝ ΛΑΒE
Medicare: Another Federally-authorized Ponzi Scheme (along with Social Security), for which Judgement Day is approaching.
Not being able to get a reservation at your favorite restaurant on your anniversary is a problem. Medicare is a disaster that could and probably will doom this country.
There are always possibilities. But the obvious one is that the era of profligate government spending is drawing to a close.
In the time of the Great Depression, it wasn’t the massive spending by the “Old Frank” administration that dug the US out of its hole, mortgaging the future to pay for the present. All it accomplished was to keep those devastated by the depression from starving, though that wasn’t bad.
However, by doing so it kept the economy depressed perhaps twice as long as it would have been otherwise. And set the nation into a spiraling economic disaster for the future to solve.
And the future is now.
The old philosophy, of profligate spending, can no longer work at all, because there is no more solid economy it can pawn to pay for itself. It is the pauper who has written a million dollars in bad checks.
Perhaps the only possible solution is threefold. First, for the US to abrogate its foreign debt, ending for a century the willingness of foreigners to invest in America. Second is to change the US Constitution, with an airtight amendment that balances the budget.
And third, and most important. The US government must renege on its unlawful promises to the people. Social Security will revert to its original purpose—a retirement only for those minimum wage workers with no other retirement. Medicare will be returned to the States for private charity hospitals.
Much of the government bureaucracy will cease to exist, eliminated because it has no Constitutional framework. The federal government of the US will spend its money on the national defense and federal police, and only how much or how little it takes in as taxes.
The impetus for this will be an international depression of an extraordinary degree. By abrogating its foreign debt, the US will insulate itself from the melee, and be able to direct the international recovery.
In exchange for its foreign debt, the US will export grain to feed much of the world. We no longer owe them money, but they do not starve, a fair exchange during the crisis.
Most world trade will be for barter, but the vast amount will stop altogether.
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations 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 and previous articles.
solution has to come from restriction of the large variety of treatments and drugs covered....
my mil is a perfect example....is off and on new meds all the time...seems special drs for her arthritis even though she has had muliple surgeries that haven't really helped...goes to see drs for little things....
restrict the number of medicines that are paid for by medicare...restrict visits to drs unless emergencies to 2 a yr...we probably going to have to index some people with high incomes.
Yeah but when we decide we are not longer going to pay the tab then what are they going to do?
A fairly simple solutions that would have worked if implemented years ago: index to life expectancy. The medical community has done a good of a job in lengthening life which has caused Medicare to pay a much larger percentage of peoples lifetime health cost.
Are you being serious here? If you think that's possible why haven't you decided NOT to pay the tab yet? To put it simply, you don't have the votes. Remember what happened when a Republican president wanted to make small changes to social security with a Republican House and a Republican Senate? Bush didn't have a friend in the world. Sorry, there's no escape. ;-)
And as there are lots (relatively) of baby boomers compared to older folks, so the economic burden has not been too hard.
The real questions is: Will you demand that your kids pay 25% payroll taxes to fund your SS and Medicare?
I think not. Get used to the fact that you will have FAR less retirement $$/lower lifestyle and much less access to medical care than your parents.
It is just the way it is.
schu
There is one escape. A depression similar to the Great Depression. The money simply WILL NOT be there. People will die in the street. It will be a biblical purge. THIS is what liberalism has wrought. Hopefully we will never forget the lesson afterwards.
Agreed. I’d expect to see that happening in Europe first though.
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