Tag: Medicare

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national politics & policies too much government

716 Billion Lies

As the campaign for the presidency heats up, we’re going to hear the words “taxes” and “deficit” and “spending” repeated ad nauseam. And this number: $716,000,000,000.

That’s the amount of future Medicare spending that President Obama and the Democrats in Congress (exclusively, without a single Republican vote) cut, slashed, ripped, hacked out of the hands of elderly Americans over the next ten years.

And I thought Democrats loved Medicare, believed in it, wanted to keep it like it is against the bitter schemes of GOP Scrooges!

Now, as Republicans attack the Democrats’ attack on Medicare, Dems have counter-​attacked by charging that in his plan GOP VP nominee Paul Ryan cuts Medicare this exact same $716 billion. Ryan explains that his approach simply took the status quo as the baseline, and, sadly, tragically, that includes Obamacare’s nearly trillion dollar malpractice in gutting Medicare funds.

With older citizens constituting a huge voting block, this fall’s election may hinge on this $716 billion being taken from Medicare. Funny thing is, the number is a mirage. Meaningless. Not real. Medicare will not be cut $716 billion. Not really. Instead, it will grow in leaps and bounds over the next decade.

Nothing in Obamacare stops Congress from spending that $716 billion and more in coming years. In fact, they already plan for Medicare spending to grow by far more.

That’s the problem more broadly with the cuts Democrats offer in exchange for higher taxes. The cuts are illusory because the spending continues to grow. Therefore, any tax increases to plug deficit spending would be pouring water into a bucket full of holes.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies

Waste, Fraud and Abuse

There are few things less inspiring than listening to Republican and Democratic Party candidates and their flunkies discuss entitlement reform.

Last weekend, the Romney camp defended its newly acquired reform high-​ground from assaults by the current administration. Rep. Paul Ryan had famously charged that the Democrats’ health care reform package of 2010 had “raided” nearly three-​quarters of a trillion dollars to help extend Medicare-​like benefits to younger populations. The Obama camp swears on a stack of, uh, Bibles, that all it did was cut waste and fraud and, yes, expanded services to seniors in the process and . . .

I don’t have the heart, or stomach, or liver (which organ is it that deals with bile?) to diagnose all this with scientific scrutiny, but I will say, off-​hand, both sides look pathetic.

Who can believe that politicians and their hangers-​on in the bureaucracies have actually honed in on — much less will actually cut —nearly a trillion dollars of waste, fraud and abuse?

Not that they aren’t there. It’s just that waste and fraud seem awfully stubborn, given that even those spending a lifetime in politics have made no progress against them.

Except during campaign speeches,

Washington politicians seem much friendlier to the wasters, fraudsters and abusers than to taxpayers. And the former are better organized, too.

It’s all preposterous.

And the supposed Republican reformers? They are “defending Medicare” so that older people don’t have to lose anything. But if the system is falling apart, it may be that the only fair thing is for every current recipient to lose something, so as not to lose everything.

The unmentionable truth? Waste is part of the system, and the programs are themselves fraudulent and abusive.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Fiddling in the Flames?

The president and congressional leaders came to some sort of an agreement last night. It sounded a tad vague to me. Apparently, politicians still fear taking pride in identifying actual cuts.

Harvard economist Jeffrey Miron, writing last week, argues that the deals then on the table amounted to “fiddling while Rome burned.”

The only thing surprising about the above sentence, to savvy readers, might be the suggestion that “Harvard economist” is not a contradiction in terms. But hey: Judge for yourself.

“The problem with the Democratic position is that it regards redistribution, rather than economic productivity, as the prime goal of government policy,” Miron reasonably asserts. The problem with the Republicans? A “refusal to distinguish between the tax revenue that comes from higher rates and that which comes from fixing tax loopholes that inappropriately privilege certain consumption or production.”

Higher tax rates won’t work, because “the available revenue from the wealthy is far too small. And higher taxes discourage economic growth, making deficits worse.”

But Obama’s idea of closing some loopholes is not a horrible idea, Miron argues. These so-​called loopholes are bad policy to begin with, integral, as they are, to bipartisan folly, favoring some folk at the expense of the rest. Picking winners — what some tart up as “industrial policy,” but most of us identify as “buying votes.”

Miron says that Medicare, though, is the biggest ongoing fiscal destabilizer. Cuts must be made there.

Those will likely be the hardest to secure.

This is Common SEnse. I’m Paul Jacob.

Categories
national politics & policies too much government

Beggar-​All Promises

The essence of politics-​as-​usual is to promise the moon and bury any mention of costs. 

This beggar-​all promising has calcified into government policy. And we all get trapped in the web of promises that become law and then bureaucracy with “benefits” … as folks come to rely on those benefits. Damn the costs.

Example? Medicare.

It’s politically untouchable. Though deeply insolvent, politicians and partisan activists of both parties whip voters into a frenzy each time the program gets targeted for the slightest cost-​constraining reform.

How out of control is it?

According to a report by David Naither, for The Center for Public Integrity, “Medicare is a significant part of the reason the national debt is soaring.…” Millions rely on it as a “safety net” that protects them “from bankrupting medical bills. But since it’s an open-​ended program — with no upper limit — the nation has no similar protection to keep Medicare from bankrupting the country.”

Naither is not just fear-​mongering. The trends are clear. The program itself raises medical costs, Naither notes, and, as the Baby Boomers retire, it will have “more seniors to cover.” No wonder the program now outpaces Social Security growth; it could very well bulge past Social Security within 25 years.

If the country survives the added burden, that is.

There are reasons we need to reform the structure of politics. For politics-​as-​usual is throwing us into a deep, downward spiral.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability government transparency too much government

The Liability Behind the Curtain

Do not look at the liability behind that curtain! Or: Do not mention that we don’t know what the liabilities are.

Some things are too painful to report.

Apparently.

The folks who audit the Social Security Administration are late on a set of reports. The reports in question account for the financial and actuarial (un)soundness of Social Security, specifically on the (un)funded liabilities of the pension system and Medicare.

Unlike corporations, which are required to report to the IRS on March 15 each year, and individuals, who must report on April 15, there’s no set date for the trustees of our federal government’s biggest program to make its report. But in recent years the reports have been published early enough to allow summary by May. The last report summary we have is for 2009.

Why so late?

Could it be that things have gotten so bad that it’s difficult to figure out — and embarrassing to sign one’s name to — the actual financial situation? After all, this year Social Security ran out of money to write checks for its promised (and quite immediate) pay-outs.

Sheila Weinberg, CEO of the Institute for Truth in Accounting, writes that she heard the reports were late because “trustees wanted to include the effect the health care bill had on these liabilities.” Ms. Weinberg not unreasonably challenges this rationale. Wouldn’t Social Security’s liabilities have been worth knowing before Congress committed to more entitlement spending?

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Sometimes a Great Prediction

Five years ago, I compared Social Security to the Titanic. Insolvency played the part of fatal iceberg. On Monday I noted that the first stage of insolvency —  projected back then to take place in 2017 — has been refigured to arrive early. This year.

So much for our leaders’ plan of “not putting off till tomorrow what can be put off a decade.” Decades sure aren’t what they used to be.

Neither are the budget numbers politicians throw around. Take the Democrats’ just-​passed medical reform package. Do you really believe it will save us money?

Who’s right depends on the reliability of the reform package’s cost projections. And, from what I can tell, those projections are filled with trickery. 

A typical sleight of hand is to project ten years in advance, and extoll how that decade’s first years don’t add much burden to the taxpayer. But that’s only because chunks of the programs stagger into effect over the first half of the decade.

But before you go poring over the bill’s two thousand and more pages, checking the  numbers, ask yourself: When have government economists correctly predicted costs of a major new entitlement? 

Never.

Take Medicare. Initial projections for catastrophic coverage were half of the real amount; Medicare as a whole grew nine times over its promised size; and the costs of Medicare’s Disproportionate Share Hospital Adjustment program proved 17 times higher than originally predicted.

Congress is in the business of making bad law, not good prophecy.

This is Common Sense. I’m Paul Jacob.