As an FYI, as you read my analysis of the misuse of numbers, keep in mind that I have a masters degree in statistics and for most of my life have been involved in analyzing numbers and stats. Politicians misuse of numbers and statistics is taken as a personal and professional affront to me and my profession.
1) We have often discussed the serious and dire straits that Social Security and Medicare are in. The numbers are not good as more and more Americans retire and burden the systems with fewer and fewer workers to finance the needs of Baby Boomers' income and retirement needs. And as always, American politicians have neither the brains, will power or courage to fix what ails both systems.
A recent article in USA Today highlighted how bad the numbers are:
- The Social Security Trust fund will go broke in 2034 and Medicare’s trust fund will go broke in 2026, eight short years from now.
- But we know from previous discussion that this is fake news since the trust fund really does not exist as anything but a cruel accounting trick, Social Security has been in a negative cash flow situation for years.
- Former head of the Federal Reserve Board, Ben Bernanke, warned Congress of this situation in 2011: "The unsustainable trajectories of deficits and debt [under current policies] cannot actually happen, because creditors would never be willing to lend to a government whose debt, relative to national income, is rising without limit." [Side note: maybe he should pass along this insight along to the Chicago politicians who want to issue another $10 billion in debt to help fund a $28 billion debt liability shortfall, i.e. “creditors will never be willing …”]
- The numbers spelling out the crisis is pretty simple: Social Security and Medicare have unfunded liabilities over the next 30 years of of a whopping $82 trillion because 74 million Baby Boomers will be entering both systems over that time period.
- To fund this shortfall without changing benefits or the parameters of the program, taxes would have to be raised over $2.7 TRILLION a year for 30 years.
- This would raise the annual Federal budget by over 60%.
- It also means that on average, every American family would have to pay an additional $22,000 a year in extra taxes to cover the shortfall.
- And taxing the rich, the inane all-purpose solutions from Democrats does not work since even if you doubled the existing top two tax brackets to 70% and 74%, that would only close 20% of the deficit.
- And it probably would not even do that since who would work hard and long to earn a lot of money just to give over 70% of it up to inept government bureaucrats , thus, making the shortfall covered less than 20%.
- And what if you did not tax the rich more but somehow could confiscate all of their money and liquidate it, something that would be impossible to do but what if: if you took the wealth of the ten richest people in the county and somehow used it to fund the $82 TRILLION shortfall you would cover about….1.4% of the $82 TRILLION.
- If you took the the wealth of the next 10 richest Americans you would not come close to that 1.4% of the first ten since those top ten folks are truly head and shoulders above even the 11th to 20th richest Americans.
- So “taxing the rich” is stupid if you think that it will close the $82 TRILLION gap, the numbers do not lie.
- Totally eliminating the defense budget for 30 years, which will never happen, would cover less than 25% of the $82 TRILLION.
- Eliminating all anti- Federal government spending for 30 years, which will never happen, would not do much better.
So don’t worry about whether the Russians colluded with Trump or Hillary. Don’t worry about who wins the midterm elections. Don’t worry about climate change. Because within the next ten years, a whopping and growing $21 TRILLION national debt and an $82 TRILLION Social Security and Medicare shortfall will crush any petty concerns you have today. The numbers do not lie.
2) So Medicare is racing towards financial insolvency and yet, stupid politicians in D.C. want to go to a single payer health insurance program for all Americans, the so-called “Medicare for all.” This means that the government would take over all aspects of every American’s health insurance and medical care needs under the Medicare umbrella even though it cannot fund its current needs and never mind adding hundreds of million Americans onto the program.
And as we have pointed out any number of times, such a government take over of a country’s health care industry has been a financial and quality disaster. From Canada to England, wait times for medical care goes up and the quality of that care goes in the dumper. Never mind the cost of this inane “Medicare for all” nonsense:
- According to an analysis by the Mercatus Center at George Mason University, The “Medicare for all” program would increase government healthcare spending by a whopping $32 TRILLION over just the next ten years.
- Thus, given the $21 TRILLION national debt and the $83 TRILLION shortfall in the current form of Medicare and Social Security, this program would bring total Federal government debt in these areas to an unfathomable $136 TRILLION.
- This would put the per household debt burden on average to over $1,000,000 each.
- Obviously, the whole system collapses long before we actually get to this $1,000,000 level.
- At $32 TRILLION in the first ten years, the average increased government spending on healthcare would be about $3.2 TRILLION a year.
- This would mean that the Federal government spending, and increased taxes, would have to go up by over 70% a year.
- And as we discussed above, raising taxes on the rich to pay for this is still a stupid idea since confiscating the entire wealth of the ten richest Americans would cover about 3% of this increased government tax need.
- If you only took 10% of their wealth you would cover only .3% of the program’s cost and raising taxes on only their income would be too small to measure.
- And since the current Medicare program loses tens of billions of dollars every year from criminal fraud, imagine how many hundreds of billions of dollars would be lost annually to criminal fraud in a “Medicare for all” program.
- Doctors getting less compensation are less likely to stay in the profession, making the current doctor shortage even worse, greatly expanding the time it takes to see the remaining doctors, and increasing costs since the supply would go down without a corresponding decrease in demand.
- Future doctors are less likely to enter the profession since their earnings would be greatly reduced and they would spent so much more of their time dealing with likely inefficient and ineffective government bureaucracies than actually caring for people.
- And the Mercatus study showed that reducing hospital payouts by 40% would result in about 80% of those hospitals to be in an unprofitable mode almost overnight.
Thus, the numbers show that “Medicare for all” would result in longer wait times, lower quality, fewer doctors, financially at risk hospitals, more bureaucracy, more fraud, and unbearable Federal government debt. The numbers do not lie.
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