6 ms·

Agreed, anyone who just glanced at federal budget would know, it's Social Security/Medicare/Medicaid/Defense. Touching anything else is just tinkering at edges.

phantasmish 11mo ago
Social Security comes from its own budget paid by a separate tax. When its savings (accrued by that same dedicated tax) runs dry it has to cut spending. It will not, under current law, deficit spend. The only problem to solve there is whether we want to adjust its funding so benefit levels don’t drop in the nearish future. People bringing it up in discussions of the general budget usually either don’t understand how it’s funded, or are presenting it inaccurately because they want to end it.
- biophysboy 11mo ago
  This is part of what I meant by "political problem". People see the mainline deficit number without thinking about the underlying stocks/flows of the system. There are feedback loops embedded in this that are unavoidably political (nobody wants to take grandma's retirement money). There's no "founder's mentality" that can avoid this basic fact.
  - wolfcola 11mo ago
    Except you blamed “entitlement spending” for the deficit, which the comment above clearly disproves.
    - biophysboy 11mo ago
      I “blame” it only in the sense that it’s part of the negative cash flow, even if it has its own dedicated pool of cash. I don’t use the term “entitlement” pejoratively. But I am not a “panic about the deficit” guy. There’s a lot of trivial things we could do: rethink fee for service, negotiate more w/ providers, raise taxes, etc
amatwl 11mo ago
The United States government is an insurance company with an army.
pabs3 11mo ago
> Defense American soldiers I've met overseas seemed to think the defense department is mainly a social healthcare/education/jobs program. Perhaps these need to be split from the defense budget, and applied to the entire population.
throw0101a 11mo ago
> Agreed, anyone who just glanced at federal budget would know, it's Social Security/Medicare/Medicaid/Defense. It's almost a trope/meme to label the US government as "an insurance company with an army": > Think of the federal government as a gigantic insurance company (with a sideline business in national defense and homeland security), which does its accounting on a cash basis, only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting . . . is an accident waiting to happen. * Peter Fisher, 2003, Bust Treasury official; https://nsjonline.com/article/2017/08/hill-the-insurance-company-with-an-army/ https://nsjonline.com/article/2017/08/hill-the-insurance-com...
- robocat 11mo ago
  I struggle to understand the metaphor. From link: The U.S. federal budget is now 50 percent consumed by spending for Social Security, a social insurance program; Medicare and Medicaid, two of the largest health insurance programs in the country; and various other social safety net programs which act as insurance plans as well. Except for one thing. None of these federal insurance programs operate as licensed sanctioned insurance plans as we see in the private sector where money is collected from the individual and invested or managed in a fiduciary manner to build assets to pay for claims in the future. Voters think they've saved: "I paid my taxes all my life". But what would it mean for a government to save money over decades? How else can a government run except on a cash basis? Aside: I belong to a non-profit health insurance co-op and a non-profit car insurance - they run by matching payouts to premiums and limiting what they cover (e.g. Southern Cross Healthcare is extra healthcare on top of what the NZ government provides). Edit: ooops, I've just noticed my car insurer AMI Insurance which was a mutual insurance company before the Canterbury earthquakes went bust and the government sold it (now part of IAG).
  - throw0101a 11mo ago
    > But what would it mean for a government to save money over decades? * https://en.wikipedia.org/wiki/Social_Security_Trust_Fund https://en.wikipedia.org/wiki/Social_Security_Trust_Fund The SSA had actually been collecting 'extra' money (from Baby Boomers) for awhile now and putting off to the side, but that extra income stopped a while ago, and the trust fund where it was stored was being tapped to keep benefits up. The "shortage" in Social Security that is sometimes in the US news is the estimated time when the 'extra' funds run out, and benefits will only be covered in cashflows. And this is not sudden thing: many government pension systems in the world are facing similar situations. The politicians in the US have not done anything about (for decades), whereas Canada did decide to change their system: * https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_reforms https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_refor... Other countries are facing debates (France, Denmark, etc).

phantasmish 11mo ago

Social Security comes from its own budget paid by a separate tax. When its savings (accrued by that same dedicated tax) runs dry it has to cut spending. It will not, under current law, deficit spend. The only problem to solve there is whether we want to adjust its funding so benefit levels don’t drop in the nearish future. People bringing it up in discussions of the general budget usually either don’t understand how it’s funded, or are presenting it inaccurately because they want to end it.

biophysboy 11mo ago
This is part of what I meant by "political problem". People see the mainline deficit number without thinking about the underlying stocks/flows of the system. There are feedback loops embedded in this that are unavoidably political (nobody wants to take grandma's retirement money). There's no "founder's mentality" that can avoid this basic fact.
- wolfcola 11mo ago
  Except you blamed “entitlement spending” for the deficit, which the comment above clearly disproves.
  - biophysboy 11mo ago
    I “blame” it only in the sense that it’s part of the negative cash flow, even if it has its own dedicated pool of cash. I don’t use the term “entitlement” pejoratively. But I am not a “panic about the deficit” guy. There’s a lot of trivial things we could do: rethink fee for service, negotiate more w/ providers, raise taxes, etc

amatwl 11mo ago

The United States government is an insurance company with an army.

pabs3 11mo ago

> Defense American soldiers I've met overseas seemed to think the defense department is mainly a social healthcare/education/jobs program. Perhaps these need to be split from the defense budget, and applied to the entire population.

throw0101a 11mo ago

> Agreed, anyone who just glanced at federal budget would know, it's Social Security/Medicare/Medicaid/Defense. It's almost a trope/meme to label the US government as "an insurance company with an army": > Think of the federal government as a gigantic insurance company (with a sideline business in national defense and homeland security), which does its accounting on a cash basis, only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting . . . is an accident waiting to happen. * Peter Fisher, 2003, Bust Treasury official; https://nsjonline.com/article/2017/08/hill-the-insurance-company-with-an-army/ https://nsjonline.com/article/2017/08/hill-the-insurance-com...

robocat 11mo ago
I struggle to understand the metaphor. From link: The U.S. federal budget is now 50 percent consumed by spending for Social Security, a social insurance program; Medicare and Medicaid, two of the largest health insurance programs in the country; and various other social safety net programs which act as insurance plans as well. Except for one thing. None of these federal insurance programs operate as licensed sanctioned insurance plans as we see in the private sector where money is collected from the individual and invested or managed in a fiduciary manner to build assets to pay for claims in the future. Voters think they've saved: "I paid my taxes all my life". But what would it mean for a government to save money over decades? How else can a government run except on a cash basis? Aside: I belong to a non-profit health insurance co-op and a non-profit car insurance - they run by matching payouts to premiums and limiting what they cover (e.g. Southern Cross Healthcare is extra healthcare on top of what the NZ government provides). Edit: ooops, I've just noticed my car insurer AMI Insurance which was a mutual insurance company before the Canterbury earthquakes went bust and the government sold it (now part of IAG).
- throw0101a 11mo ago
  > But what would it mean for a government to save money over decades? * https://en.wikipedia.org/wiki/Social_Security_Trust_Fund https://en.wikipedia.org/wiki/Social_Security_Trust_Fund The SSA had actually been collecting 'extra' money (from Baby Boomers) for awhile now and putting off to the side, but that extra income stopped a while ago, and the trust fund where it was stored was being tapped to keep benefits up. The "shortage" in Social Security that is sometimes in the US news is the estimated time when the 'extra' funds run out, and benefits will only be covered in cashflows. And this is not sudden thing: many government pension systems in the world are facing similar situations. The politicians in the US have not done anything about (for decades), whereas Canada did decide to change their system: * https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_reforms https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_refor... Other countries are facing debates (France, Denmark, etc).