proposals for fixing ss and medicare

[Beryl]

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Originally Posted by chinaco Well... I did not say that taxes alone would do it. But, taxes do not even seem to be in the (official) cards.... other than by default... the sunset of the Bush tax cut... which, you are correct... that will not do it. I am still looking for some of that shared pain they have been talking about. What it is looking like to me is mainly Middle Class Pain!

Agreed but the sad part as many who support continuing to hit the middle class are lower class citizens! For the life of me, I can figure out why they'd rather cause themselves more pain than to allow those tax cuts to expire on the rich.

[palomalou]

Okay, I'll ask another closely related question: if Medicare is already more financially efficient than private insurance companies which are in business to make a profit, why would privatizing Medicare as proposed for those under 55 be anything except a further subsidy to big business? This is important to me because although I am over 55, my spouse is 53.

[Beryl]

Quote:

Originally Posted by palomalou Okay, I'll ask another closely related question: if Medicare is already more financially efficient than private insurance companies which are in business to make a profit, why would privatizing Medicare as proposed for those under 55 be anything except a further subsidy to big business? This is important to me because although I am over 55, my spouse is 53.

It wouldn't. Privatizing Medicare is as bad as privatizing firefighting and police. Some things should not have a profit component.

[Packman]

Can anyone rationally explain why on earth our wonderful politicians cut the SS tax by 2% this year when the system is on track to default. Holy cow, throw that drowning man a brick!

[Midpack]

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Originally Posted by Packman Can anyone rationally explain why on earth our wonderful politicians cut the SS tax by 2% this year when the system is on track to default. Holy cow, throw that drowning man a brick!

So you'd get a raise from the government, 'bribing you with your own money,' that's what politicians do for a living. You're right it doesn't make any sense in the long run, but have you seen anyone complain or object at any time this year? We get what we deserve...

[FinanceDude]

Quote:

Originally Posted by palomalou Okay, I'll ask another closely related question: if Medicare is already more financially efficient than private insurance companies which are in business to make a profit, why would privatizing Medicare as proposed for those under 55 be anything except a further subsidy to big business? This is important to me because although I am over 55, my spouse is 53.

Anyone really believe Medicare is more efficient that the private insurance companies? Because I have YET TO SEE ANY govt program that is efficient............

[Midpack]

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Originally Posted by palomalou if Medicare is already more financially efficient than private insurance companies

That's news to me! Where did you hear that?

[Texas Proud]

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Originally Posted by MasterBlaster Chinico, Taxes alone won't do it. It is inevitable that those entitlement programs will become less generous. One way or another it is going to happen. Oh taxes will go up, you can count on that. But no matter what rate they set it won't collect enough to cover entitlements Midpack's chart shows the trend. Beyond 2011 things just keep getting worse quickly. By the way, this isn't new. people have known about it for decades.

It has been known that the money would have to be paid back.... but they probably thought that it could just be borrowed in the private sector and things would keep going....

But then Bush and Obama racheted up spending and unfunded obligations at a rate never seen before... and there went the ability for us to borrow our way out of the problem....

[Tadpole]

Quote:

Originally Posted by Packman Can anyone rationally explain why on earth our wonderful politicians cut the SS tax by 2% this year when the system is on track to default. Holy cow, throw that drowning man a brick!

They presumably paid the 2% from the general fund. But it will be interesting if they can expire this reduction.

I think that Obama probably wanted to have another round of stimulus at the bottom but couldn't get any more stimulus through Congress so he reduced the payroll tax to advantage the bottom more than the top.

[chinaco]

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Originally Posted by samclem While federal taxes as a percent of GDP are close to the postwar average now, total taxes (local, state, federal, see chart below) are already programmed to be at very high levels. Every new increment is going to reduce economic growth by taking investment money out of the private sector. And economic growth is the only way out of our mess.

I agree with most of your statement except the bolded part. I will also point out that I am not an economist... are you a professional economist?

I will explain my position... I think it is pretty sound.

By law... there are specific monies collected to pay for SS and Medicare. Dedicated money for that specific purpose!

In the case of SS and Medicare the money is collected and distributed (immediately). Then it is spent immediately by most of the recipients. When that money is spent, that puts the money in circulation buying goods and services which creates business opportunity.

In the case of SS and Medicare most people jump on it because they say it is a redistribution of wealth.

But for you and I... the middle class... it is more of a pay as you go system. You paid for your parents. Your kids pay for you.... and so on.

We are not the recipients of a transfer of wealth. If anything we have transferred our wealth to the less fortunate.... with those bend points in the payout structure!


I am sure you know my position on the FICA money that was spent in lieu of collecting taxes the last 30 years. That money was transferred to mainly wealthy people (not you or me).... but we will repay it through general taxes to service and pay back the debt. Plus, we will take a benefit haircut! The poor will not! The wealthy (not talking middle class)... while they get something... the amount means little to nothing to them.

When the 3 card monte shuffle ends... you and I (the middle class) will be the losers.

[MasterBlaster]

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Originally Posted by Texas Proud It has been known that the money would have to be paid back.... but they probably thought that it could just be borrowed in the private sector and things would keep going.... But then Bush and Obama racheted up spending and unfunded obligations at a rate never seen before... and there went the ability for us to borrow our way out of the problem....

Perhaps for SS your point may be valid.

For Medicare, it's a lost cause and there just never was or never will be enough to support it like it has been.

[palomalou]

Midpack, I had to do a bit of research because I had heard it on NPR several times, not read it. Here is a source:
www.cahi.org/cahi_contents/resources/.../CAHIMedicareTechnicalPaper.pd...or here:
Medicare versus insurers - NYTimes.com
or here:
Medicare vs. Non-Government (Private) Health Insurance - Health Care Reform - ProCon.org
For a contrarian view:
RealClearPolitics - Busting the Adminstrative Cost Benefit Myth
which I would refute because OF COURSE health care costs will be much higher in a solely elderly population than in the privately-covered, younger population.

[Texas Proud]

Quote:

Originally Posted by MasterBlaster Perhaps for SS your point may be valid. For Medicare, it's a lost cause and there just never was or never will be enough to support it like it has been.

Yes, I was talking about SS...

The problem with medicare is the cost are going up a lot faster than planned... and they can not do much about that... IOW, they can not borrow their way out of the problem...

[donheff]

[QUOTE=Tadpole

I think that Obama probably wanted to have another round of stimulus at the bottom but couldn't get any more stimulus through Congress so he reduced the payroll tax to advantage the bottom more than the top.[/QUOTE]Do you think he somehow did it by himself? It was part of the deal to extend the Bush tax cuts for the rich. The payroll tax holiday is gonna get extended for another year.

[chinaco]

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Originally Posted by Texas Proud Yes, I was talking about SS... The problem with medicare is the cost are going up a lot faster than planned... and they can not do much about that... IOW, they can not borrow their way out of the problem...

The medicare situation reflect the general health care problem in the US.

While I suppose some politicians might hope to single it out.... the real issue is much deeper and broader than Medicare.

The cost of health care in this country is probably one of the singular problems that could drive us into financial ruin (as a country).

It is a real problem for companies too... and will be more and more for people that get health care from their company.

[samclem]

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Originally Posted by chinaco I will also point out that I am not an economist... are you a professional economist?

No, but since one can find a "professional economist" willing to back almost any fantastic assertion, I don't think this counts much against us.

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Originally Posted by chinaco In the case of SS and Medicare the money is collected and distributed (immediately). Then it is spent immediately by most of the recipients. When that money is spent, that puts the money in circulation buying goods and services which creates business opportunity.

Ahh . . . but not all expenditures produce equal "good" in the economy. When dollars are in the hands of a consumer, that individual spends them on whatever will bring him the most benefit (food, clothing, shelter, medical care, a car, a boat, etc). He will also shop around for that particular item to find the seller who gives him best value for the dollar. From these millions of possible choices, the individual will choose one, and both the seller and the buyer are winners at the end of the transaction. This competition for business consistently improves the quality of goods and services and lowers prices.

When the government takes money from the public to spend for the health care for others, there's no reason to believe that this is the best use for the money--the people who the money belonged to initially certainly didn't make the choice to spend it on health care (it got taken from them in taxes). The people who receive the health care didn't choose the sellers (in some cases) and didn't/couldn't shop for a good price (hey, it was Uncle Sam paying the bill).

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Originally Posted by chinaco But for you and I... the middle class... it is more of a pay as you go system. You paid for your parents. Your kids pay for you.... and so on.

True, except for all the "extra" money collected from me for the last 30 years--the money that went into the "trust fund". That money didn't go to any oldsters at the time, it went immediately to be spent on whatever the government bought: Tanks, welfare payments, food stamps, aid to cities, space exploration, studies on the sex life of frogs. That money is gone and the taxpayers in general don't have money to pay the "trust fund" back. Surprise! No, not really. So, lets stop the charade and make SS a true pay-as-you-go affair that balances out every year. Make the payouts match the SS taxes, or make the taxes match the payouts, but no more shifting around of money. That game is over.

[samclem]

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Originally Posted by palomalou Midpack, I had to do a bit of research because I had heard it on NPR several times, not read it. Here is a source: www.cahi.org/cahi_contents/resources/.../CAHIMedicareTechnicalPaper.pd...or here: Medicare versus insurers - NYTimes.com or here: Medicare vs. Non-Government (Private) Health Insurance - Health Care Reform - ProCon.org For a contrarian view: RealClearPolitics - Busting the Adminstrative Cost Benefit Myth which I would refute because OF COURSE health care costs will be much higher in a solely elderly population than in the privately-covered, younger population.

The low Medicare admin cost "fact" is not settled. It, in effect, counts only the admin costs Medicare incurs for cutting the checks to providers. Guess who those providers are? Mostly private companies. Guess what is included in their bills? All their admin costs, including the very big back-office costs of dealing with the Medicare bureaucracy. Still, the studies generally count the total amount of the checks sent by Medicare to providers as "direct cost of medical care" while, with private insurers (including Medicare Advantage) all medical back office costs are counted as "administration." See the problem? Here's a thread where this Medicare admin cost issue was discussed.

No sane person would defend our present medical care "system" as being the best approach. It's a mess. But there are good alternatives that don't involve handing everything over to a government proven to be inept at both managing money and providing services.

[obgyn65]

I agree with chinaco on this.

Quote:

Originally Posted by chinaco I am sure you know my position on the FICA money that was spent in lieu of collecting taxes the last 30 years. That money was transferred to mainly wealthy people (not you or me).... but we will repay it through general taxes to service and pay back the debt. Plus, we will take a benefit haircut! The poor will not! The wealthy (not talking middle class)... while they get something... the amount means little to nothing to them. When the 3 card monte shuffle ends... you and I (the middle class) will be the losers.

[Ronstar]

I agree as well. The poor get checks and do not pay in. The rich don't pay on income over 102k? So a middle class family earning 100k pays as much FICA as a billionaire. The middle class is getting ripped big time.

[Tadpole]

Ronstar: "The poor get checks and do not pay in."

The poor pay the same percent of their income as the middle class up to the cap. No one gets SS if they didn't pay in at least 40 quarters. 35 years of payments are factored into the algorithm. So, it's the over the cap that get the tax break but they get the same as someone on the cap while working.