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A big part of our problems are the calculations that were used to justify Social Security and Medicare (over half our budget). Neither program was built to last

A big part of our problems are the calculations that were used to justify Social Security and Medicare (over half our budget). Neither program was built to last more than two generations. The politicians that created them didn't care about that (FDR and LBJ), in typical intentional short-sightedness. Both programs were designed to be flush early so they could be plundered. Instead of having trillions sitting in a sovereign fund earning interest, we have a blackhole of entitlement liabilities. In other words, the biggest problem with our social systems is theft. The money was used over two generations to buy votes. edit: it's interesting to try to calculate it roughly, but, it seems fair to estimate that the politicians have spent an inflation adjusted $30+ trillion beyond their means over the last 70 years ($16 trillion public debt, plus the money that should have been put aside and earning interest from SS and Medicare etc).

parasubvert 14y ago
That's just not true with regards to Social Security. 100 years of projected life before dragging on other Federal finances and one major reform so far (another will be needed) is usually the sign of a successful government program. It's not in dire crisis: we will start to see it drag on other government finances in 20 years, as FICA will only fund about 75% of payouts once the trust fund is exhausted. Medicare on the other hand is a different story. Costs are growing too high to make it sustainable. But that doesn't have to do with the efficiency of the program itself vs. other insurance companies - it's actually quite a bit efficient than private insurers. The problem seems to be the broader U.S. system of health cost/benefits compared to other countries. We spend more and get less.
- anamax 14y ago
  > It's not in dire crisis: we will start to see it drag on other government finances in 20 years, It's actually a drag now, as it has been paying more in benefits than it receives for the past few years. Yes, I know about the bonds. Paying them back is a drag because they weren't used to create profitable assets.
  - _delirium 14y ago
    That seems like a problem for the regular budget to sort out: Soc. Sec. basically has the money it needs for some decades, but the rest of the budget either needs significant cuts or tax hikes so that it can pay back Soc. Sec. what it owes it. I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along, contrary to Reagan's assurances in 1983 that he wasn't making a regressive change to the tax code, because of the bonds. If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security.
    - anamax 14y ago
      > I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., I didn't suggest that. I'm just pointing out that the "drag" has already started. > and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along It's not a regressive tax because of the payout is capped too. In fact, it's actually a progressive tax because of the way that payout works. The ROI for folks who pay the minimum is pretty good. The ROI for folks who hit the cap is horrible. That said, some subgroups do worse/better than others. The worst is probably black men. They don't live long enough to get the payouts. I think that white women are the big winners. > If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security. Actually, the designers of SS put in the cap because they thought that it was the best way to protect SS from political fights. Are you planning to remove the benefits cap as well? If not, it's just another tax and rich people are going to care. SS's designers wanted rich people to ignore SS. If you do remove the benefits cap, then you get to explain why Ross Perot gets $400k/year in benefits. I think that SS's designers got that part correct. The payout formula needs some tweaking.
    - anamax 14y ago
      > That seems like a problem for the regular budget to sort out I agree. My point is that the problem exists now. > I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., I didn't suggest default. I'm just pointing out that the "drag" has already started. > and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along It's not a regressive tax because of the payout is capped too. In fact, it's actually a progressive tax because of the way that payout works. The ROI for folks who pay the minimum is pretty good. The ROI for folks who hit the cap is horrible. That said, some subgroups do worse/better than others. The worst is probably black men. They don't live long enough to get the payouts. I think that white women are the big winners. > If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security. Actually, the designers of SS put in the cap because they thought that it was the best way to protect SS from political fights. Are you planning to remove the benefits cap as well? If not, it's just another tax and rich people are going to care. SS's designers wanted rich people to ignore SS. If you do remove the benefits cap, then you get to explain why Ross Perot gets $400k/year in benefits. I think that SS's designers got that part correct. The payout formula needs some tweaking.
njharman 14y ago
> over half our budget 32.9 != over half. Including Medicaid gets 43, still not over half. Not likely to give much credence to rest of your claims.
- adventureful 14y ago
  Ah yes, only 43%. Sorry I missed by so much when I was generalizing. =)
_delirium 14y ago
That's the funding side, but what I'm wondering is why we don't get more for the money we do spend. Norway and Canada spend about the same amount on state-funded medical care as we do, but they manage to provide universal coverage, whereas in the U.S. we spend all that money but I still have to buy private health insurance! Instead it goes into this patchwork of uncoordinated programs: Medicare, Medicaid, VA hospitals, reimbursements for unpaid ER visits, etc.
- knz 14y ago
  Don't forget administrative costs. An interaction with a medical professional in the US can involve multiple billing departments (the clinic, the lab, the actual doctor in some cases), your insurance company, any medical reimbursement schemes you may be involved with (HSA, VEBA etc), and your own time dealing with this mess. http://www.nejm.org/doi/full/10.1056/NEJMsa022033 http://www.nejm.org/doi/full/10.1056/NEJMsa022033 "The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system" This probably doesn't even include the added cost to businesses of having to employee additional HR staff to coordinate the insurance and reimbursement accounts. Every politician interested in job creation should be pro universal/single payer/socialised healthcare. The financial burden of administering and paying for private insurance has to be a significant burden for both small and large businesses.

parasubvert 14y ago

That's just not true with regards to Social Security. 100 years of projected life before dragging on other Federal finances and one major reform so far (another will be needed) is usually the sign of a successful government program. It's not in dire crisis: we will start to see it drag on other government finances in 20 years, as FICA will only fund about 75% of payouts once the trust fund is exhausted. Medicare on the other hand is a different story. Costs are growing too high to make it sustainable. But that doesn't have to do with the efficiency of the program itself vs. other insurance companies - it's actually quite a bit efficient than private insurers. The problem seems to be the broader U.S. system of health cost/benefits compared to other countries. We spend more and get less.

anamax 14y ago
> It's not in dire crisis: we will start to see it drag on other government finances in 20 years, It's actually a drag now, as it has been paying more in benefits than it receives for the past few years. Yes, I know about the bonds. Paying them back is a drag because they weren't used to create profitable assets.
- _delirium 14y ago
  That seems like a problem for the regular budget to sort out: Soc. Sec. basically has the money it needs for some decades, but the rest of the budget either needs significant cuts or tax hikes so that it can pay back Soc. Sec. what it owes it. I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along, contrary to Reagan's assurances in 1983 that he wasn't making a regressive change to the tax code, because of the bonds. If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security.
  - anamax 14y ago
    > I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., I didn't suggest that. I'm just pointing out that the "drag" has already started. > and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along It's not a regressive tax because of the payout is capped too. In fact, it's actually a progressive tax because of the way that payout works. The ROI for folks who pay the minimum is pretty good. The ROI for folks who hit the cap is horrible. That said, some subgroups do worse/better than others. The worst is probably black men. They don't live long enough to get the payouts. I think that white women are the big winners. > If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security. Actually, the designers of SS put in the cap because they thought that it was the best way to protect SS from political fights. Are you planning to remove the benefits cap as well? If not, it's just another tax and rich people are going to care. SS's designers wanted rich people to ignore SS. If you do remove the benefits cap, then you get to explain why Ross Perot gets $400k/year in benefits. I think that SS's designers got that part correct. The payout formula needs some tweaking.
  - anamax 14y ago
    > That seems like a problem for the regular budget to sort out I agree. My point is that the problem exists now. > I don't think it's an acceptable option to retroactively say that some of the Soc. Sec. taxes won't be paid back to Soc. Sec., I didn't suggest default. I'm just pointing out that the "drag" has already started. > and just kept for the general fund. If that happened, then it's basically been a regressive income tax all along It's not a regressive tax because of the payout is capped too. In fact, it's actually a progressive tax because of the way that payout works. The ROI for folks who pay the minimum is pretty good. The ROI for folks who hit the cap is horrible. That said, some subgroups do worse/better than others. The worst is probably black men. They don't live long enough to get the payouts. I think that white women are the big winners. > If that is likely to happen, then at least the regressiveness should be fixed ASAP by removing the $110k cap, because the only justification for the cap is that the money is earmarked for Social Security. Actually, the designers of SS put in the cap because they thought that it was the best way to protect SS from political fights. Are you planning to remove the benefits cap as well? If not, it's just another tax and rich people are going to care. SS's designers wanted rich people to ignore SS. If you do remove the benefits cap, then you get to explain why Ross Perot gets $400k/year in benefits. I think that SS's designers got that part correct. The payout formula needs some tweaking.

njharman 14y ago

> over half our budget 32.9 != over half. Including Medicaid gets 43, still not over half. Not likely to give much credence to rest of your claims.

adventureful 14y ago
Ah yes, only 43%. Sorry I missed by so much when I was generalizing. =)

_delirium 14y ago

That's the funding side, but what I'm wondering is why we don't get more for the money we do spend. Norway and Canada spend about the same amount on state-funded medical care as we do, but they manage to provide universal coverage, whereas in the U.S. we spend all that money but I still have to buy private health insurance! Instead it goes into this patchwork of uncoordinated programs: Medicare, Medicaid, VA hospitals, reimbursements for unpaid ER visits, etc.

knz 14y ago
Don't forget administrative costs. An interaction with a medical professional in the US can involve multiple billing departments (the clinic, the lab, the actual doctor in some cases), your insurance company, any medical reimbursement schemes you may be involved with (HSA, VEBA etc), and your own time dealing with this mess. http://www.nejm.org/doi/full/10.1056/NEJMsa022033 http://www.nejm.org/doi/full/10.1056/NEJMsa022033 "The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system" This probably doesn't even include the added cost to businesses of having to employee additional HR staff to coordinate the insurance and reimbursement accounts. Every politician interested in job creation should be pro universal/single payer/socialised healthcare. The financial burden of administering and paying for private insurance has to be a significant burden for both small and large businesses.