Skip to content

How Do You Spell Medicare?

Recently I was leaving a public library in New York City.  An elderly guy, in other words, someone my age, said to his female companion “How Do You Spell Medicare?”  He then supplied the answer; “Lyndon Johnson.”  I had the impression he was praising what he considers a wonderful program.

From his point of view it is wonderful; the average male in his seventh decade receives a subsidy of $285,000. (Source: “Spending Beyond Our Means,” Jagadeesh Gokhale, Table 3, page 11.)*

Has he considered who pays for this subsidy?  Then it might not be so wonderful; we are bankrupting our own children with this program.

The average male in his 30’s will pay $246,000 more into the system than he receives in benefits (same citation as above.) I picked that decade because I have a son-in-law that age.  What this means is people in his decade will pay most of my subsidy and other young people will pick up the rest.

It defies imagination to think that people don’t look beyond their own subsidy to ask ‘who pays for it?’  It just comes from the government, I guess.

I have written on this theme before because I think Medicare and other entitlement programs are the single most dangerous programs we have.  Politicians want to expand these programs when they must be contracted if we are to avoid a financial crisis a couple decades down the road.  (There are always commentators predicting an imminent, Greek-like collapse for us but more considered economists give us more time.)

I’ll be gone by the time this financial collapse takes place, so what do I care?  Well, I have a daughter.

*I picked males because the author breaks down statistics by age and gender.  Women and men have different financial outcomes under Medicare, as do people of different ages.  The consistent theme is that today’s elderly receive a huge subsidy.

Advertisements

Budget Cuts as Covered in the Press

The following is an email I sent to a Washington Post writer about an article she authored that spoke about ‘cuts’ to the Medicaid program proposed by the Trump administration.  Spending would still increase under the proposal but at a slower pace than under current law.

The article concludes that the Trump administration’s statement that spending will still increase is misleading.

At the bottom I wrote about an analogous situation during the Reagan administration.

 

Email to Washington Post writer July 2, 2017

Michelle Lee

I couldn’t figure out how to post a comment so I am writing to you this way.

The article gets to the 8th paragraph before it says this:

Spending still increases, but at a much slower rate than under current law. Based on the way the CBO analyzes legislation, this would be considered a cut in federal spending relative to current projections. 

Therein lies the problem; a slower rate of spending increases means a CUT in spending.  This is part of the distortion that pervades political rhetoric.  Furthermore, this country is in deep financial trouble and needs to drastically curtail spending.  I don’t like cutting programs directed at low-income people but cuts might be needed even there if we are to get out of our long-term fiscal mess.  A mess that will bankrupt our own children.

I believe your article reflects bias in favor of a program that has not been shown to actually better the health of the low-income insured.

Rick Miller

New York City

Press Esc or click anywhere to return to Mail.

Try the new Yahoo Mail

The day after writing this I remembered something similar during the Reagan Administration.  When President Reagan began his administration headlines stated that the administration was cutting $35 billion from the budget.  To put it in context, the total Federal budget was around $700 billion at the time.

Ah, but was there a cut of $35 billion?  No, the administration was cutting $35 billion off the projected increase of $105 billion, leaving a net increase of $70 billion.  Yet the press often portrayed this reduction in the increase as a budget cut of $35 billion.

To frame the context, inflation was very high in those years, sometimes in double digits.  So in real terms it is possible there was a slight decrease in spending as a result of Reagan’s cuts that year.

My point is that the press often reports reductions in spending increases as actual reductions.  I believe this reflects bias.

I have not checked the accuracy of the figures I used for the Reagan administration’s budget.  I am going on memory.

 

Paris Climate Agreement; Trump’s Decision was Right, Not His Reasoning

President Trump removed the U.S. from the recently finalized Paris Climate Agreement.  He was right:

-these agreements are never followed by the signing nations; they might feel good to environmentalist voters but they accomplish little or nothing.

-even the supporters agree that abiding by the terms of the accord would reduce projected global warming over the next decades by 0.17%.  This is trivial and would cost trillions of dollars if nations actually abided by these voluntary targets.

-the spending that would be necessary to meet the goals can be much better spent on such projects as clean water for those without access and reducing the incidence of malaria.  Leaving more money in the private sector instead of spending it on politically-favored “green” companies would help too.  The private sector has come up with many things that benefit the environment even though the motivation was profit.  The surge in natural gas production is the most recent example; gas has supplanted coal, resulting in less pollution.

Trump’s reasoning is the problem.  He says global warming is a Chinese plot to tie up U.S. manufacturing in environmental restrictions.  Global warming is not a scam, although many environmentalists accept the most extreme interpretations of the threat.

Rick Miller

Vote for Hillary?

I have heard several people, including libertarians, say they will vote for Hillary because Trump is worse.  I hate to admit it, but if a gun were put to my head and I had to vote for one of the two I would vote for Hillary, despite some perverse thoughts of wanting to poke the noses of some arrogant liberals by voting for Trump.  Our country does not yet force us to make such choices.  So I won’t vote for Hillary or Trump.

 

Here’s a partial list of reasons to not vote for Hillary:

 

-She is so clearly tied to special interest groups and policies that are damaging to low-income people.  Examples include milk price supports, agricultural subsidies and ethanol production.  All these things increase the price of food, which hits all of us, especially those with low incomes.  For example, demand for corn has increased because of its use in making ethanol and that means, under that ever-wise law of supply and demand, that corn prices are much higher.  These policies are also bad for the environment.  Environmentalists used to promote ethanol but now admit it was a mistake; the subsidies remain.

 

-Hillary is truthiness challenged.  She has provided many explanations of her private email system, some of which have been proven to be untrue.  Even if you choose to excuse her, her decision to have a private email server in the bathroom of her home doesn’t speak well of the decision-making ability of someone who would be President.  Furthermore, it is very likely she lied about Benghazi as evidenced by the fact she told her daughter shortly after the attack that it was a terrorist attack.  To the public she said over and over it was the result of an anti-Muslim video posted by an American.  Evidently the Obama administration didn’t want to admit how active terrorists still were so it blamed the attack upon a distasteful video.

 

-She not only defends entitlement programs, she wants to expand them.  This might be the single most important problem facing the United States, (and Western Europe and Japan), more important than our rivalries with Russia and China.  I don’t understand how young people can support anyone who defends entitlement programs; the programs must be curtailed if our children are to live in a country not weighed down by debt to the point of bankruptcy.  I receive benefits from those programs (Social Security and Medicare) and at the same time feel guilty and fear for my daughter’s future.

 

-She supports all of the Obama administration’s interventions; Iraq, Syria, Libya, Yemen and elsewhere.  Drone attacks, more surveillance too.  Some refer to her, appropriately, as Hawkish Hillary.

 

These kinds of policies date from the Bush administration and before, and have continued (expanded in some cases) under the Obama administration.  For some strange reason, most liberals object to these policies only during Republican administrations and most conservatives object to them only during Democratic administrations.

 

Reason Magazine’s Nick Gillespie had one of the best comments about voting for Hillary; voting for the lesser of two evils is still voting for evil. (“Libertarians: Just Say No to Hillary Clinton and Donald Trump.”)

 

Rick Miller

SNAP Lies

I saw an advertisement on a bus stand recently.  There was a picture of an elderly man and it read “I earned Social Security and Medicare, and when I couldn’t afford healthy food, SNAP HELPED.”

You might think I’m going to attack the SNAP program (which replaced what used to be called food stamps) but that’s not my priority.  The lies are about Social Security and Medicare.

Today’s elderly, including myself, are receiving vast subsidies under Medicare, regardless of need.  One economist’s study broke down winners and losers by age and gender.  Men my age, in their 70’s, will receive, on average, a subsidy of $285,000.  My son-in-law, in his 30’s, will receive $246,000 less than what he pays in taxes into the program.  So that means he will pay most of my subsidy and some other age groups will pay the balance. (Source: “Spending Beyond Our Means,” Jagadeesh Gokhale, Table 3, page 11.)

We hear politicians and so many senior citizens say “we paid for Medicare.”  This is factually incorrect; we are being heavily subsidized.  This cannot go on forever, which is the very nature of a Ponzi scheme.  Eventually Medicare will become a bad deal for people because of all the taxes they will pay and the inevitable healthcare rationing that will result from government trying to restrain the cost.  Actually, there already is rationing in Medicare, although it is not yet severe.

Social Security was a huge windfall for early recipients and then became a bad deal for seniors because Social Security taxes were raised again and again over the years.  That will happen with Medicare but it is a program 30 years younger than Social Security so it is still a windfall for seniors.  The windfall is so large that it overpowers the mediocre return today’s retiring seniors get on their Social Security taxes; around 2% after inflation.

I do not understand why people my age don’t get this.  We are bankrupting our children because of our denial.  I do not understand why most young people don’t get it.  Although the government tries to conceal what is happening by telling us we paid for it, the truth is available.

I do have criticisms of the SNAP program even though I am not opposed to it in the abstract.  (I wouldn’t oppose a program that was limited to the needy if the program actually helped them.)  Successive administrations, Republican and Democratic, have expanded SNAP so much that it is close to becoming another middle class entitlement.

Lawrence Reed and Marc Hyden wrote about a similar phenomenon that occurred during the Roman Empire; Emperors began giving away free food to citizens and successive Emperors expanded the program well beyond the needy (“The Slow- Motion Financial Suicide of the Roman Empire.”)  The food program became Rome’s second largest budget item, behind only the military.

I hope I haven’t clouded my main point with my comments about SNAP.  My main point is Medicare is a huge subsidy for people such as myself and government promotes the lie that we earned it.

Rick Miller

July, 2016

Guns and Surveillance; Lessons from France

Liberals and conservatives both resort to big government solutions when they are beset by the “We Must Do Something NOW” syndrome.

………………………………………………………………………………

 

I watched a John Stossel program recently and it focused my attention on the big government ways of liberals and conservatives.  This similarity shows up vividly when they become subject to the “We Must Do Something NOW” mentality.

Rand Paul pointed out bulk surveillance of phone records by NSA has not stopped a single terrorist attack.  There have been some restrictions placed on these programs by Congress through the efforts Senator Paul and others.  The other Republican Presidential candidates argue that these restrictions reduce our ability to stop terrorism.

France has more extensive surveillance of its citizens than we do, Stossel pointed out, and that didn’t stop the attacks in Paris where 130 were killed.

That reminded me of the parallel with liberal calls for gun control in the wake of terrorist attacks in Europe and the recent attack in San Bernardino.  France and Belgium (Belgium being the home ground of some of the terrorists involved in the Paris attacks) have much stricter gun control laws than we have in the United States.  Those controls didn’t stop the recent Paris attacks or the earlier Charlie Hebdo attack.

When the “We Must Do Something NOW” mentality takes hold, liberals and conservatives each go for their big government solutions.  That’s how we got the Patriot Act, shortly after the 9/11 attacks in the U.S.  That’s how we might get extensive gun control in the U.S. this time around.  Neither the liberal nor the conservative solution will make us safe.

I do not want to own a gun.  It’s just that we ought to have more evidence before we resort to giving the government more control over our lives.

 

Out of the Country

I am leaving for a trip out of the U.S. I had thought of writing a sarcastic piece asking the President to refrain from attacking me while overseas. This is too serious a matter for sarcasm. President Obama has authorized the killing of at least two overseas American citizens he deemed terrorists. Bush claimed the same authority. I don’t pretend to be important enough to attract such attention from the Administration, but it is disturbing nonetheless.

When I return President Obama has the authority to indefinitely detain me under the National Defense Authorization Act of 2012, which he signed on the last day of 2011. It is arguable this was the day the U.S. became an unfree country. The Bush administration claimed authority under prior law to take this action as well, so I’m not saying it is all Obama; it is the power grabbing nature of government, which we ignore at our peril.

Rick Miller

I posted this piece on the Manhattan Libertarian site in January, 2014