GAO doom and gloom report

[cannon_fodder]

The GAO released a new document outlining the collapse of the United States under our current fiscal policy:
http://www.gao.gov/new.items/d07983r.pdf

The report is NOT political and not from a 'think tank.'  It is from the arm of the government responsible for managing the budgetary mess than Congress creates.  And recently, they have been getting irate.  This is the clearest declaration of danger yet.

This is not Bush bashing, as the essence of the problem has been known and growing for many years.  Forget immigration, the war on terror, or social security; it is our government unfunded promise of health care and retirement that will spell its demise. Politicians making promises their grandchildren can't pay for.

I will not bore you with the numbers, but in essence, we will have to CUT spending in all other areas by up to 40% and raise taxes up to 50% in an effort to remain solvent if something is not done to remedy the problem.  Without a solution government spending will near 40% of GDP within the next 30 years (double its current level).

NO candidate, Republican nor Democrat, is really addressing this issue.  At this point, any solution is better than ignoring it.  The official governmental stance has always been that Medicaid, Social Security and other such entitlements are not *really* liabilities as they can be cut at any time.  Well, if that is the plan then lets let people know so they can plan ahead.  If that's not the plan, then lets start finding a way to fund all these handouts.

This is why we are supposed to have a government of ENUMERATED powers.  They never should have got in the retirement/health care game to begin with as it is NOT an enumerated power under am honest interpretation of the General Welfare clause.  Too bad every power the government grabs is magically enumerated for the last 65 years.

[tim huntzinger]

Hey, I thought you were of the opinion that our national debt was perfectly OK, hat nonsense spending on things like VOA was guh-reat!  Why the change of heart, Lord?

[cannon_fodder]

Our currently debt load is not a cause for concern.  As I previously stated our national debt load as a % of GDP is in line with historical trends and well within sound economic limits.

As I also have repeatedly held out, our national SPENDING is way out of line and should be drastically cut.  This post is in regard to what will happen if our government choses to ignore its inflated spending patterns and refuse to address future liabilities.  

I have attempted to be VERY clear on these points with you and am somewhat disappointed that you appear to have not grasped my stance on the issue.  I shall reiterate:
1. Current debt load not a cause for concern
2. Current spending way out of line
3. Future obligations not properly accounted for, funded, nor planned for.
4. As a result future debt load AND future spending will be a concern.

These situations should be remedied by reduced spending, an honest assessment of future obligations, and (as a last resort) additional tax revenue.    It ties in to my concept of a tax scheme that enables people to see how much money the Fed really spends and an simple adjustment to pay for additional costs.

[Conan71]

quote:Originally posted by cannon_fodder

The GAO released a new document outlining the collapse of the United States under our current fiscal policy:
http://www.gao.gov/new.items/d07983r.pdf

The report is NOT political and not from a 'think tank.'  It is from the arm of the government responsible for managing the budgetary mess than Congress creates.  And recently, they have been getting irate.  This is the clearest declaration of danger yet.

This is not Bush bashing, as the essence of the problem has been known and growing for many years.  Forget immigration, the war on terror, or social security; it is our government unfunded promise of health care and retirement that will spell its demise. Politicians making promises their grandchildren can't pay for.

I will not bore you with the numbers, but in essence, we will have to CUT spending in all other areas by up to 40% and raise taxes up to 50% in an effort to remain solvent if something is not done to remedy the problem.  Without a solution government spending will near 40% of GDP within the next 30 years (double its current level).

NO candidate, Republican nor Democrat, is really addressing this issue.  At this point, any solution is better than ignoring it.  The official governmental stance has always been that Medicaid, Social Security and other such entitlements are not *really* liabilities as they can be cut at any time.  Well, if that is the plan then lets let people know so they can plan ahead.  If that's not the plan, then lets start finding a way to fund all these handouts.

This is why we are supposed to have a government of ENUMERATED powers.  They never should have got in the retirement/health care game to begin with as it is NOT an enumerated power under am honest interpretation of the General Welfare clause.  Too bad every power the government grabs is magically enumerated for the last 65 years.

Just a few observations.  Keep in mind, I'm not as astute on many economic principles as you are.

The GAO does say on page two this is a simulation and not a prediction, just a "what-if".  All that aside, it does raise the concerns it is designed to.

Wasn't social security originally proposed by FDR as being a temporary program during the Great Depression to help poverty-stricken retirees who had lost their retirement savings?

Seems to me that there are a lot of baby-boomers who have been in the workforce since the mid-1960's who will have good pensions and/or personal investments and savings which will carry them well into their golden years.  

Is there not some way for the gov't. to determine who really needs SSI as a retirement benefit and who does not and use a sliding scale to provide income for the neediest of retirees and exclude those with huge nest eggs?

Of course, we are also seeing that generous pension plans are stretching large employers to the limits (i.e. General Motors).

What is a viable solution, barring reining in spending in all other areas?  What would be logical changes to our retirement system?

[Chicken Little]

No, it wasn't intended to be temporary.  It was gov't pension that was designed to keep old and disabled people from starving...social insurance.

Means testing is one way to keep it solvent, but right now it's an earned right.  Take it away and it will lose popular support.  The most likely outcome is that congress will do basically nothing.  The baby boomers will hit the system very hard, and us folks behind them (a smaller bunch of voters) will simply have to survive on 3/4 the benefits that the baby boomers will enjoy.  Once they're dead, things might stabilize again at that lower rate, some say around 2050.  If your head isn't grey already, start saving.  If it is, then live it up...your kids'll pick up the tab for you.

[Conan71]

CL- I didn't hear your comment real well, did you say social insurance, or voter's insurance? []

[cannon_fodder]

Per the report, social security is not the real problem.  Medical entitlements are.  

At the current pace, the country will be ruined (financially, socially, militarily) by 2050.  We simply can not afford the "do nothing" solution that lazy politicians now enjoy.

[Chicken Little]

quote:Originally posted by Conan71

CL- I didn't hear your comment real well, did you say social insurance, or voter's insurance? []

Yeah, that third rail puts out a lot of noise and sparks when you touch it.  This is probably one subject where I'm fairly conservative, but not for ideological reasons.  

There's no reason to raise taxes to fund social security, because at this point it'll just be placing an additional burden on the children of the boomers.  You could do means testing, but that would likely lead to the demise of the program (conservatives may want that, but I don't).  So the fair option, IMO, would be to cut bennys and raise retirement ages a little on boomers now, so that thier kids won't have to take the hit.  That'll never happen.

I guess I'm already resigned to my fate.  I've had my retirement age raised to 67 and I fully expect it to go to 70 before too long...and their ain't much I can do about it.  It's just the luck of the draw being born behind the boomers: they make more, they work less, they'll retire earlier and better, and they'll be able to outvote me for the next 30 years.  I'm saving money, not because I believe in "privatization", but because it doesn't take an actuary to tell you that we're skee-rewed.

[Conan71]

quote:Originally posted by cannon_fodder

Per the report, social security is not the real problem.  Medical entitlements are.  

At the current pace, the country will be ruined (financially, socially, militarily) by 2050.  We simply can not afford the "do nothing" solution that lazy politicians now enjoy.

How do you feel about Universal Health Care?

Edwards and Obama were saying the cost would be a minimum of what... $50 to $100 bil p/y.  Considering it's an election promise, at least double the final cost.

[USRufnex]

Universal healthcare is do-able and  achievable.  Medical entitlements?... you mean being able to go to the doctor when you're sick?  You betcha I'm entitled... when I have a good job and when I've had a bad job... when my neighbor has a good job and when my neighbor has no job...

We spend more per capita on healthcare than any other country in the industrialized world...

stats from 1998 during the Clinton years...

http://www.nationmaster.com/graph/hea_spe_per_per-health-spending-per-person

#1   United States: 4,271    
#2   Switzerland: 3,857    
#3   Norway: 3,182    
#4   Denmark: 2,785    
#5   Luxembourg: 2,731    
#6   Iceland: 2,701    
#7   Germany: 2,697    
#8   France: 2,288    
#9   Japan: 2,243    
#10   Netherlands: 2,173    
#11   Sweden: 2,145    
#12   Belgium: 2,137    
#13   Austria: 2,121    
#14   Canada: 1,939    
#15   Australia: 1,714  

The list in 2003...
http://www.kff.org/insurance/snapshot/chcm010307oth.cfm

#1   United States: 5,711    
#2   Luxembourg:  4,611
#3   Switzerland: 3,857    
#4   Norway: 3,769    
#5   Iceland:  3,159    
#6   France:  3,048
#7   Belgium:  3,044  
#8   Canada:  2,998    
#9   Germany:  2,983
#10  Austria:  2,958
#11  Netherlands:  2,909  
#12  Australia:  2,886  
#13  Sweden:  2,745  
#14  Denmark:  2,743    
#15  Ireland:  2,455  

And there is NOTHING more fun than being in between jobs and getting the dreaded COBRA letter...

But of course, the medical capitalists out there will tell us the quality is MUCH better in our medical system... not according to this...

http://www.sciam.com/article.cfm?alias=us-healthcare-expensive-i&chanId=sa003&modsrc=reuters

quote:"The U.S. health care system ranks last compared with five other nations on measures of quality, access, efficiency, equity, and outcomes," the non-profit group which studies health care issues said in a statement.

Canada rates second worst out of the five overall. Germany scored highest, followed by Britain, Australia and New Zealand.

"The United States is not getting value for the money that is spent on health care," Commonwealth Fund president Karen Davis said in a telephone interview.

The group has consistently found that the United States, the only one of the six nations that does not provide universal health care, scores more poorly than the others on many measures of health care.

quote:Per capita health spending in the United States in 2004 was $6,102, twice that of Germany, which spent $3,005. Canada spent $3,165, New Zealand $2,083 and Australia $2,876, while Britain spent $2,546 per person.

quote:
According to the report, 61 percent of U.S. patients said it was somewhat or very difficult to get care on nights or weekends, compared with 25 percent to 59 percent in other countries.

"The area where the U.S. health care system performs best is preventive care, an area that has been monitored closely for over a decade by managed care plans," the report reads.

The United States had the fewest patients -- 84 percent -- reporting that they have a regular doctor.

And U.S. doctors are the least wired, with the lowest percentage using electronic medical records or receiving electronic updates on recommended treatments.

Doing nothing would be the most disastrous policy option of all.

[Conan71]

I'm still somewhat ambivalent on UHC.  I'd be interested in looking deeper into it and hearing other's comments.  I started a thread a few months ago on it and Swake was the only other person who cared to weigh in.

There are some good models out there, including Mass.

The point where I cast doubt on it is where there will be "parity" in health care.  I don't think it will improve the quality of healthcare for those already on medicaid or medicare.  The government already has great bargaining power with HCP's considering they dictate what they will pay for each procedure and for hospitalization.

Still people with the most money will always be able to pay for better care than those who rely on the gov't for it.  The only way there will be parity in level of care is if care becomes worse for the more affluent.

The other hesitation I have is that small proprietorships and corps. could be hit hard financially by compulsory participation in the program.

UHC

[cannon_fodder]

I am reserved on Universal Health Care.  

I believe that a well managed collective national health care program could lead to better health and well being as well as save money.  I also believe that most governments are incapable of managing a health care system well.  Our government has managed to squander a standard retirement account and loses billions of dollars a year to black holes (see pallets of cash in Iraq), I do not think they can do the job.

Add to the ineptness of the government the lack of motivation in the market.  If the profits and potential of the industry is limited, so too will be the investment in both capital, time, and as a career choice.  When the motivation of profit falls off, companies tend to get lazy; their work product falls and their efficiency declines.  They have no motivation to be responsive to customer demands (see monopolistic utilities or any government agency). Americans spend more on health care than any other nation because we demand the best.  

We will not wait the 6+ months Canadians do for CT Scans, or the years it takes a Swede to see a specialist.  We refuse to use the last model of imaging device and want the latest and greatest pictures of our insides.  Those things cost money, usually a unjustifiable expense medically - but services we demand and are (apparently) willing to pay for.

I am skeptical of turning over my major life decisions to anyone but my family and closet friends.  Certainly I do not want a bureaucratic  set of laws nor an administrator dictating to my doctor how he shall treat me.  Sure my insurance policy does that now to some degree, but most people hate it and have the option of changing or paying for it themselves.

Speaking of paying for it themselves...  American's, of all people, need some incentive to keep themselves in shape.  Currently, there is SOME financial motivation involved.  If the government will pay for your lipo, your throat cancer,  emphysema, or heart disease that motivation is lost.  I like to see good decisions rewarded in some way (like non-smokers paying less for health insurance and good drivers less for car insurance...).   I'm not sure how big of a factor this is, but it exists.

On top of all of that, I do not want to give the government any more power than they already have.  The larger the government, the more capable it is of wasting money and repressing its people.  If you don't agree with that, I don't think you have been paying attention the last 7 years as the budget explodes, the government accumulates more power, and personal freedoms are corroded.

So how do I feel about Universal Health Care?  I think it could help, but I do not think our government could pull it off in any way that would result in a positive change.

[bokworker]

In my mind the key to this issue is the level of health care afforded to everyone. Genral care, doctor visits, and most drug treatments are not the issue... they are affordable adn should be made available. The issue comes when extraordinary events occur.... bypass surgery, organ transplants, expensive drug therapy's, etc. In those cases should ALL citizens have access to these treatments? Full access to the very best and latest treatments are what will bankrupt the system. Then of course the issue becomes, who makes the decisions on how this health care is allocated and at what point do you have to look at someone and say, "I am sorry but without the personal means to access this treatment, you are going to die". And beyond that, is that really the wrong thing to say?

[tim huntzinger]

My opinion is and always has been that the national debt of $7 TRILLION is an issue TODAY, only to get worse.  Some here argued passionately that this is not an issue.  My opinion is that the VOA is a waste of funding, some here have argued passionately for increased funding.

The fact is we have civil 'servants' who will spend more time drawing a retirement check than they did on the job.  Fact is we are spending more (hat-tip, rufnex) and getting less for our money.

[Conan71]

quote:Originally posted by tim huntzinger

My opinion is and always has been that the national debt of $7 TRILLION is an issue TODAY, only to get worse.  Some here argued passionately that this is not an issue.  My opinion is that the VOA is a waste of funding, some here have argued passionately for increased funding.

The fact is we have civil 'servants' who will spend more time drawing a retirement check than they did on the job.  Fact is we are spending more (hat-tip, rufnex) and getting less for our money.

Everything seems like a pass-through issue anymore- "Let someone else deal with it later, we are too busy trying to be popular than to risk losing votes and our jobs if we piss the wrong people off".  

How many administrations have ignored overhaul of SSI, immigration, national debt, healthcare, etc. ad nauseum?