US Repubs budget plan: slash and privatize Social Security and Medicare

[bascule]

http://tpmdc.talkingpointsmemo.com/2010/02/one-gopers-budget-vision-social-security-and-medicare-benefit-cuts.php

 

I'm no fan of Social Security and I'm not exactly eligable for Medicare so I don't really have a vested personal interest in either program. However I do enjoy myself some schadenfreude and this seems like the Republicans reaching out and grabbing on firmly to the proverbial firm rail.

 

This is what they have to offer in lieu of Obama's bipartisan deficit task force? Oh really... I'm sure their base of old people receiving social security and drugs from the government loves it.

[Mr Skeptic]

I wonder what Democrats can do to make this stay on people's radar (short of having anything to do with it of course).

[Pangloss]

Why?

[SH3RL0CK]

Well its quite obvious that unless the demographics drastically change, at some point, social security and medicare won't be helping anyone. One root of the problem is the demographic shifts of people living 20 years longer than they used to while at the same time having 2 children rather than six reduces the relative number of workers. Another root of the problem is that both Democrats and Republicans have been stealing from the surplus funds for pet projects and otherwise mismanaging these programs over the past three or four generations.

 

Separating it from the federal government would allow these to eventually default, probably in a large crash, without shutting down the federal government (which involves too many important functions to be considered) since there would be a very clear separation. This is what I think is the real plan of the republicans.

 

The democrats plan, on the other hand, seems to be to allow these continously collect more and more taxes from the public while paying out less and less. A default by a million cuts rather than one large crash, in other words.

 

So which is better, being shot or strangled? I find neither option appealing, but either way I'm not expecting these to be around when I need them.

[jackson33]

bascule; The Federal Government is not capable of sustaining it's obligations, made through any of the welfare programs, it's as simple as that. Any postponing of the total collapse, will be at the other cost, which all lead back to an inevitable collapse of the nation itself. Pick your own source for CURRENT obligations based on longevity and over -X- number of years, you can pick from figures 50T$ to well over 100T$, currently obligated for, with no means to cover.

 

With nearing 310 Million, people in the US, around 100 million already receiving some assistance, with less and less wealth to draw income from, can not be configured into a positive scenario.

 

Privatizing Medicare, SS, possibly even throwing in the unemployment/disability or other State/Federal obligations into the mix, under the private sector, at least would give a shot to long range benefits for those under 50 today. Government, not only the Federal is in serious need of assistance itself.

 

"Obama's bipartisan deficit task force"; This is pure political rhetoric, a campaign style argument and of no value to any potential solution. The TASK force already exist, in possibly 20 different committees in both the House and Senate, already, all have both parties represented, already being paid and have the AUTHORITY to enact change. It's Obamas job, to enforce any actions by Congress, not mandate those actions.

[npts2020]

Jackson33; I don't see how you can say that privatizing Medicare and Social Security will make anything better. Our health care system is mostly privatized as it is and provides some of the worst care at by far the most cost. Lack of ability to deal with "legacy" i.e. retirement costs is supposedly one of the biggest reasons GM and other companies are having financial woes. How has the private sector done any better job than the government in dealing with either one of these things?

[Pangloss]

Some of the worst care?

[jackson33]

Jackson33; I don't see how you can say that privatizing Medicare and Social Security will make anything better. Our health care system is mostly privatized as it is and provides some of the worst care at by far the most cost. Lack of ability to deal with "legacy" i.e. retirement costs is supposedly one of the biggest reasons GM and other companies are having financial woes. How has the private sector done any better job than the government in dealing with either one of these things? [/Quote]

 

 

npts; The private sector, has a back up, programmed into the system. You mentioned GM and other Companies, but may not realize, hundreds, even thousands over years, have gone out of business. Each had it's own assets and liabilities, which were assumed by others in the private sector or lost by them. If GM, had been left alone to file bankruptcy, the Company in all likelihood would have been better off today after a "Court" reorganization, which Ford did on its own. Selling losing segments of the business, reducing cost and so on....I could add in these business, also have heavy overseas operations, which lately have supported their American Operations.

 

 

Look at the Banking industry in the US today. Think about 125 Banks, many large, were forced out of business by regulations in 2009, requiring banks to hold more assets than debt. Each one had its assets/liabilities transferred to another bank, while to the consumer noticed only a change in their banks name. Since FDIC guaranteed account balances up to 250K$ (2009), it was pre-agreed to by the Banks (private sector) this would be policy. Insurance Companies, operate today under the private sector very much the same way. Many have gone under, but the assets are taken over by another and liabilities assumed in different ways, by court action in bankruptcy by the sales of the company.

 

I don't like bringing Fanny Mae into this, I don't believe done correctly, but it was a Federal Government agency at one time, very much like SS or Medicare is today. In fact it was privatized to reduce the liabilities, then on the Federal Books, which today in SS/MC are trillions of dollars. Freddy Mac, was introduced as a private Company and between them today hold over 5T$ in home mortgages. Point; It's not a new concept.

 

 

Although 1968 privatization legislation made Fannie Mae a shareholder-owned company traded on the New York Stock Exchange, it retained its exemption from state and local taxes (except property taxes). The GSE also retained conditional access to a line of credit from the U.S. Treasury Department. (The Federal Home Loan Mortgage Corporation, known as Freddie Mac, is a similar private company, federally chartered in 1970, which can purchase mortgages and related securities, and then issue securities and bonds in financial markets backed by those mortgages in secondary markets.)[/Quote]

 

http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1270

[npts2020]

Pangloss; We do great at taking care of things that have become acute problems but rather poorly at preventing them to begin with. This is reflected in the relatively low levels of longevity and healthy life expectancy and high levels of infant, childhood, and maternal mortality. I suppose you can say "worst" is just my opinion but it is because I put more weight on the latter than the former.

 

Jackson33; What happens when the privatized social security and medicare go out of business? Do we just tell all those people, tough luck you should have invested your retirement in a more robust corporation? If not, the government will be paying for it anyway so why allow someone to skim money off the top when those costs could be put toward keeping the cost of health care down? As it stands now we pay nearly twice as much for our mostly privatized health care as the most expensive government run system in the world. Is our health care twice as good?

[jackson33]

Do we just tell all those people, tough luck you should have invested your retirement in a more robust corporation? [/Quote]

 

npts; The United Health Group (UNH NYSE) is one of the largest Insurers in the US, insuring about 60 million individuals and 75,000 employees. While all 1300+ insurers have been hurt, with all this anti-insurance rhetoric, there current market cap is over 38B$, with virtually no debt, and has been valued at over 70B$. There sales over the past 12 months has been 87B$, with a profit of 4B$, most of which came from investments. Now, there is an estimated wealth of Americans and investors around the world willing to invest in the American 'Free Market Capitalist System' well over 20T$, where even today trillions of dollars, trade hands weekly.

 

Income going to the US Federal Government, around 2.5T$ 2011 FY, is spent (most before received), not invested and this year alone will spend an additional 1.6-1.8T$, over it's income. All expenses, for SS and Medical services, administrative to payments, for the Federal is around 1.6T$ (far over income from Payroll taxes). Keep in mind, if SS and Health care were privatized, there would be no need for either at the Federal Level.

 

Which scenario suggest an eventual failure, more importantly a reduction of service or quality?

 

If not, the government will be paying for it anyway so why allow someone to skim money off the top when those costs could be put toward keeping the cost of health care down? [/Quote]

 

Even more important, is food/shelter, which the Federal has not YET invaded, with the private sector doing a pretty good job. Yes, the profits, if any, do go back to the investor, who by the way eat and need shelter...

 

As it stands now we pay nearly twice as much for our mostly privatized health care as the most expensive government run system in the world. Is our health care twice as good? [/Quote]

 

Why are we paying more? In the US we pay 1/3rd or less for Gasoline/Diesel, per car around 4500$, while if in Europe, they drove our miles (US pretty big country) would be paying 9000US$ or more. Would you like some figures on food, shelter, clothing or other said necessities. By the way, you can visit any third world country and get your tonsils removed for about 20.00, or a tooth pulled by the local barber and you might be surprised what it will cost you as an American, in those places with NHC. Our lowest rated medical facilities have the latest best diagnostic equipment in the world, the highest educated and qualified medical personnel (a whole lot more than the Physicians themselves).

[bascule]

bascule; The Federal Government is not capable of sustaining it's obligations, made through any of the welfare programs, it's as simple as that. Any postponing of the total collapse...

 

The government is certainly capable of doing so, certainly much more than a country like Greece who's actually defaulting on debts. The real issue is we're running deep in the red and will continue to need to raise the ceiling on the national debt unless drastic action is taken.

 

However, we are not in danger of "total collapse."

 

With nearing 310 Million, people in the US, around 100 million already receiving some assistance, with less and less wealth to draw income from, can not be configured into a positive scenario.

 

Yes, that's kind of how it works: these social relief programs kick in when the economy is bad. That means more spending and less revenue. The goal of these programs, however, is economic recovery, so we shouldn't necessarily look at that as a bad thing.

 

Privatizing Medicare, SS, possibly even throwing in the unemployment/disability or other State/Federal obligations into the mix, under the private sector, at least would give a shot to long range benefits for those under 50 today.

 

I really don't think there's anything that can be done for me to receive social security payments. The program is already broke. Privatizing it only offers the potential for the program to literally go bankrupt. The only sensible option would be political suicide: declare that people under age X will not receive benefits but will be expected to pay into the program, and cap the losses that way.

 

"Obama's bipartisan deficit task force"; This is pure political rhetoric, a campaign style argument and of no value to any potential solution. The TASK force already exist, in possibly 20 different committees in both the House and Senate, already, all have both parties represented, already being paid and have the AUTHORITY to enact change. It's Obamas job, to enforce any actions by Congress, not mandate those actions.

 

So you're saying the issue of the deficit is already well in hand and no additional work on it is needed?

 

Don't you think it's the President's job to write the budget and approve the finalized budget?

[Pangloss]

We do great at taking care of things that have become acute problems but rather poorly at preventing them to begin with.

 

I agree with that, as a general statement. But I'm still curious if you can authenticate the bold section of this statement:

 

Our health care system is mostly privatized as it is and provides some of the worst care[/b'] at by far the most cost.

 

 

 

The government is certainly capable of doing so' date=' certainly much more than a country like Greece who's actually defaulting on debts. The real issue is we're running deep in the red and will continue to need to raise the ceiling on the national debt unless drastic action is taken.

 

However, we are not in danger of "total collapse."[/quote']

 

No, you're right. What we are in long-term danger of is, like a bankrupt company, a forced restructuring of our debts that will include the elimination of massive welfare benefits. We'll have to quit those programs cold turkey, at the expense of human lives, because we're unable to gradually ween ourselves from them during a time when we can afford safety nets to catch those most affected by their loss.

 

Given the current (no longer future) onset of retiring baby-boomers, this should be seen as a mandate. Instead we're ignoring the problem and spending money on stimulus and jobs programs because our fearless leaders know full well that jobs will get them re-elected, but cutting benefits will get them fired.

[bascule]

Instead we're ignoring the problem and spending money on stimulus and jobs programs because our fearless leaders know full well that jobs will get them re-elected, but cutting benefits will get them fired.

 

If the stimulus does achieve its intended goal of stimulating the economy, then we should see increases in tax revenue. Decreases in tax revenue following the financial crisis are certainly one of the main reasons why the deficit is so high right now.

 

And, of course, we can do both...

[SH3RL0CK]

However, we are not in danger of "total collapse."

Agree completely. This danger is still well off in the future. But if our politicians don't change, it will probably someday come. At least when hyperinflation hits, the Chinese will stop pegging their currency artificially low to our dollar.

I really don't think there's anything that can be done for me to receive social security payments. The program is already broke. Privatizing it only offers the potential for the program to literally go bankrupt. The only sensible option would be political suicide: declare that people under age X will not receive benefits but will be expected to pay into the program, and cap the losses that way.

 

Not sure I completely agree with you. First, if the Democrats have their way, we will get something. We will be able to buy a (small) coffee once a month with our SS check. That will be useful while we figure out which real bills we are going to decide not to pay this month.

 

Secondly, privatization (the Republican plan) is not necessarily a guarantee of default the idea being that a private investment group will be able to grow the fund faster than can the government. That will be true as the politicans will then be less able to raid these funds. But you are probably right, the growth that will be necessary for a meaningful improvement would require risky investments...and I think our luck here will run out leading to default before we would be in the clear.

 

The choice is bad either way. But it is still a long time before the consequences really hit, IMO.

[jackson33]

The government is certainly capable of doing so, certainly much more than a country like Greece who's actually defaulting on debts. The real issue is we're running deep in the red and will continue to need to raise the ceiling on the national debt unless drastic action is taken.

 

However, we are not in danger of "total collapse." [/Quote]

 

AND

 

If the stimulus does achieve its intended goal of stimulating the economy, then we should see increases in tax revenue. Decreases in tax revenue following the financial crisis are certainly one of the main reasons why the deficit is so high right now.[/Quote]

 

Projection for the 2012 Fiscal Year GDP is around 15T$ and no one expects the GDP, to keep up with National Debt percentage wise, which will be over 100%, probably in early 2011. At this point, interest on any International Sale of Treasury Bond (T-Bills) will increase dramatically, if there is any person, group or country, willing to invest in them.

 

My concerns for the future economic picture, have as much to do with State problems, as the Federal, which most are not considering. Many of these current programs (increased welfare, increased medicaid programs, increased unemployment benefits or any other Federal Mandated item, all are States/Federal Obligations, dragging both down. Texas and North Dakota, can't support the 48 States with current deficits in there current budgets.

NO STIMULUS has ever worked in my opinion, even the little bitty ones (by comparison to last years) as amounted to beans for the economy. I don't care if they gave 1000.00 to everyone breathing in the US, maybe even some not, will create one long term job. I'll repeat it again, only the confidence of the investment community to chance additional employment, remodeling current facilities, building new ones or starting a business will, leading to the chain reaction, current government believes will happen from the consumer.

 

No Greece has not defaulted, at least to as of this moment, the Euro has stabilized on the hopes France/Germany will bail out Greece, then possibly Spain.

 

You can raise the Debt ceiling, but short of printing money (inflation) or some source to barrow those increases (interest) it means nothing. We're at that point NOW.

 

I really don't think there's anything that can be done for me to receive social security payments. The program is already broke. Privatizing it only offers the potential for the program to literally go bankrupt. The only sensible option would be political suicide: declare that people under age X will not receive benefits but will be expected to pay into the program, and cap the losses that way.[/Quote]

 

What your concerned with is the transition from Government to Public, which I could address, but would take a week. A hint; You or you and an employer send the Federal near 15.4% of every dollar earned in payroll taxes (currently up to 100k$ SS, no limit on medicare)), in your lifetime, or increase that if your spouse works. Since SS is basically a mathematical income/outflow of money, it might be good idea for insurers to also be involved with that distribution, that is the obligations SS are already set, while income from Medicare verses expense can fluctuate, then as suggested other programs would also have to be assumed. Remember, most people, like myself pay back from our SS Benefit, on average 12-1400$/year for medicare.

 

So you're saying the issue of the deficit is already well in hand and no additional work on it is needed?[/Quote]

 

No, I'm saying the Committee already exist, in Congress. The executive is simply trying to get two outside people (unelected) into the decision making.

 

Don't you think it's the President's job to write the budget and approve the finalized budget? [/Quote]

 

The Executive, can make any suggestions he want's, to Congress and anything relating to the cost of operating the Executive can be and is, a request. However Congress is NOT obligated to accepting anything and if as was with Bush, can operate with out a signed budget. If Congress chooses not to finance anything, like the Vietnam War, Gitmo Transfer of prisoners to US or anything else, the issue is closed. Presidents, normally will sign whatever is presented by Congress, simply to get along with them. By the way, Congress can also refuse emergency funding (with out a signed budget) shutting down portions of Government.

[bascule]

I think the real issue here is Republicans are broaching these issues now that the Democrats are firmly in power. Bush certainly broached the issue of Social Security privatization while in office, but it quickly died in Congress. Now that there's no chance of them actually getting enacted, Republican leaders step up and propose a solution that I don't think they'd actually advocate if it had a chance of getting enacted.

[jackson33]

bascule; As I mentioned earlier to another younger fellow (another thread), it's fast becoming an either/or situation. Obama himself has addressed the need for reform, all but saying sustaining the Federal obligations are unsustainable and yes Bush DID infer much the same. While I think this came from other than him, probably Emanuel or Axelrod, that is true, but you can't feed the hand that's pulling you down.

 

I'll agree, republicans seem to be living a dream world, feeling if taxes were reduced alone we would go back to the 'good old days' when GDP was increasing with both debt and obligation of the Federal. Factually in my opinion, those days passed by as a result of both TARP and this administration, with results that went worldwide. I'll go further and say McCain, would have made little difference to the potential end result and bringing in Palin or God himself, could no longer prevent a restructuring of many of today's world powers.

 

In summery; I don't care if it's Obama, if some one steps up to the plate, says OK, I'll be a one termer, all Government Agencies will cut back 20%, doing it yesterday, then follow up and no more money is going to be spent from TARP or the outmoded 2009 Stimulus, in fact we're going to cut payroll taxes in half for two years (for everybody, no more selected few), place GM, GMAC or any other hurting financial on 'your on your own' status , along with the Unions and their problems and maintain those nasty Bush Tax cuts for at least two additional years, the results would be instantaneous. Markets would go wild, (I'm talking 15000 in a year), thousand of start ups and buy outs, merger would take place, investment in new equipment, improvements and new products would rattle your mind, along with taking of property gains of investment around the world. Tax receipts would increase 20-30%, the first year, not ten years down the road and the most important thing, the consumer would return in force. None of this will happen under Obama, or probably any current political figure, but if it did.......IMO.

[Pangloss]

I think the real issue here is Republicans are broaching these issues now that the Democrats are firmly in power. Bush certainly broached the issue of Social Security privatization while in office, but it quickly died in Congress. Now that there's no chance of them actually getting enacted, Republican leaders step up and propose a solution that I don't think they'd actually advocate if it had a chance of getting enacted.

 

I agree.

 

I've never quite understood why politicians never quite seem to grasp the fact that people remember the things that they say.

[npts2020]

Pangloss; Google national health care rankings. It doesn't matter who's figures you use but you will find the U.S. at or near the bottom of the industrialized world in the following; infant mortality, childhood mortality, maternal mortality, longevity, healthy life expectancy, mortality from preventable diseases. As I stated previously, I think these things are far more important than how fast my knee gets operated on after tearing a ligament.

 

Jackson33; You can assert all you like that the private sector can make health care universal and for a lower cost than the government but I do not have such faith in the capitalist tendencies of the "free market". It is totally your right to believe that people are not entitled to any health care whatsoever if they can't afford it but that is not my view and we will just have to disagree on that point. Even if the government completely took over the health care system, people would still be able to buy insurance or purchase services in the open market on their own if they felt the coverage was inadequate.

[Pangloss]

You didn't mention these new qualifications of "the industrialized world" or any specific diseases in your statement before, so that's a different statement now.

 

With that amendment, can you provide a link showing the US to be "at or near the bottom of the industrialized world in the following; infant mortality, childhood mortality, maternal mortality, longevity, healthy life expectancy, mortality from preventable diseases"?

 

If I have to link my factual statements, so do you. Make the extra effort, or state it as an opinion. Thanks.

[npts2020]

Pangloss; Try here, here, here, here, here, here or here

Edited February 10, 2010 by npts2020

[Mr Skeptic]

Pangloss; Try here, here, here, here, here, here or here

 

Or to put it in more legible terms for the lazy,

46th of 224 for lowest infant mortality,

116th of 135 for highest maternal death,

38th of 195 for longest life expectancy,

worst out of 19 industrialized, for preventable deaths,

etc...

 

Factor in the absurd amounts we pay for this, and perhaps you can see why people feel just a little short-changed.

[Pangloss]

The first link shows the US 33rd out of 195 on infant mortality. This does not support the statement "the worst health care".

 

The second link shows the US 18th out of 135 on maternal mortality. This does not support the statement "the worst health care".

 

The third link shows the US 38th out of 135 on life expectancy. This does not support the statement "the worst health care".

 

The fifth link shows the US at 24th out of 191. This does not support the statement "the worst health care".

 

The sixth link was a PDF that my computer seemed to have trouble with. Perhaps someone can fill me in. I don't know what it is that the fourth or seventh links are supposed to show. They aren't data, they're articles that were not quoted by the poster.

 

If I have to link my factual statements, so do you. Being politically correct or stating a popular opinion does not excuse you from this responsibility. Make the extra effort, or state it as an opinion. Thanks.

Edited February 10, 2010 by Pangloss

[jackson33]

Jackson33; You can assert all you like that the private sector can make health care universal and for a lower cost than the government but I do not have such faith in the capitalist tendencies of the "free market". [/Quote]

 

npts; If you would like me to demonstrate 'US Government Efficiency' and that of the 'Private Sector', please let me know. There is truly no comparison, in my mind.

 

It is totally your right to believe that people are not entitled to any health care whatsoever if they can't afford it but that is not my view and we will just have to disagree on that point. [/Quote]

 

To the best of my knowledge, every person has the right to insure themselves. Health Care is provided to every person and should be responsible for that cost. Where I can draw an argument. Incentive to do right, what's best for him/herself, or the family, has got to start being addressed. We're getting a little carried away with this notion that all essentials for a good long life are the responsibility of others, the usual proverbial phrase "The Rich". Add to this the mentality of UHC from the start..."it's free", if Government provides it, is past the point of insanity, yet believed by many favoring UHC.

 

Even if the government completely took over the health care system, people would still be able to buy insurance or purchase services in the open market on their own if they felt the coverage was inadequate.[/Quote]

 

I'm sorry this doesn't add up; If the Government "completely" takes over something, what's left? What your trying to say, is that even with the 'Government Option', individuals could choose between that option or one of the insurers. One of the 50 problems here, is that most people now are employor insured, to some extent by their contribution. Any group policy is based on what is acceptable to a particular group (location/demographics) and prices vary. Since government can regulate, they can mandate, no option can contain less than the Federal. That is people in Montana/Wyoming or middle America in general will be required insuring themselves against things, not likely to ever be a medical problem.

 

Google national health care rankings. It doesn't matter who's figures you use but you will find the U.S. at or near the bottom of the industrialized world in the following; infant mortality, childhood mortality, maternal mortality, longevity, healthy life expectancy, mortality from preventable diseases. As I stated previously, I think these things are far more important than how fast my knee gets operated on after tearing a ligament. [/Quote]

 

With out getting involved in your discussion with Pangloss or his style for making an argument, these statistics are commonly used to justify UHC. I'll address any one statistic at a time, if you wish to continue, but keep something in mind; No other Country, bar none, keeps records like those in the US, has 310 Million People, the demographics, the life styles, or the most important thing, an cumulative accounting from 54 different sources (50 States, DC and three rather primitive territories). I'll also ask you one question in advance. How many people do you know that have died from old age? In the US today, it's none. Even a 108 year old falls under some other than old age cause, lately having smoked cigarettes in the 1940's and died of respiratory problems smoking created.

[Skye]

This is a diagram of health care spending vs life expectancy for some nations.

 

http://blogs.ngm.com/blog_central/2009/12/the-cost-of-care.html

 

The US is at the bottom end of the developed nations for life expectancy, but it isn't separate from them. I don't think it's reasonable to say that the US necessarily has the worst care based on this outcome, there's a fair amount of variability in the outcomes for other developed nations and the US could simply be the victim of poor social factors. On the other hand US spending is completely distinct from other developed nations. They range between US$2500 and $4500 a person a year, the US spends over $7000.

 

This isn't necessarily a bad thing, health care is arguably one of the better services to spend your money on. Yet given that the US spends so much more and doesn't seem to have so much better, perhaps even worse, outcomes than developing nations, it makes you wonder where the money is going and whether it could be better spent.