Category Archives: Medicare

Social Security Projections

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The U.S. deficit continues to grow out of control, and there should have been actions taken to address the problem long before now. However, President Obama’s comments that the deficit is not a short term problem indicates to me we won’t do anything about the deficit for the next four years. Much of the problem is caused by “entitlement” commitments, and President Obama said in his inaugural address that he has no intention of doing anything about those either.

I’m baffled how the American people and the media are going along with the “don’t worry, be happy” approach. Looking at Social Security alone is frightening. A recent article by Chuck Saletta on the Motley Fool points out that each new analysis finds that the program will reach “financial unsustainability” sooner than the previous analyses. The Social Security Trustees reported in 2008 that problems would not be encountered until 2041. The date has now changed to 2033, and that is going to continue to move closer.

Money taken from employees and employers is invested in bonds, and bonds that mature must be replaced with new ones. The older bonds were yielding much more in interest than the ones currently available. The program is projected to earn $5.4 billion less in bond interest in 2012. The fact the Federal Reserve has recently said they are going to artificially keep interest rates low until the unemployment rate begins to drop means the revenue is not going to improve. Continue reading →

Romney Pick of Paul Ryan

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I have seen news reports of hecklers shouting at Paul Ryan in some of his first campaign speeches with accusing words such as “Why do you want to destroy Medicare?” I suppose the origin of that question is from a Democratic ad on the Internet that accuses, “Paul Ryan’s plan would end Medicare as we know it.” The anti-Ryan ads are playing frequently in places such as Florida where the votes of older residents are crucial. I wonder how long it will be before they resurrect the ad that portrays a Ryan look-alike dumping an elderly woman out of a wheelchair over a cliff.

Both ads bring to mind the observation that it is easier to tell a lie than to explain the truth. Mr. Ryan’s proposals are intended to improve the fiscal strength of Medicare. There would be no changes at all for the older people the ads are intended to scare.  People under 55 would have the option enrolling in Medicare or being given a voucher to enroll in a private insurance policy.

So let’s get this straight. The Ryan proposal would not change anything for anyone over 55 and it would give people 55 and under the option to stay on the program or shop for health care coverage. The proposal is in response to the fact that Medicare’s Hospital Insurance Trust Fund will have insufficient funds to maintain benefits in twelve years. Apparently ending Medicare as we know it means that bankruptcy is preferable to fixing the program. My suspicion is that some politicians can’t accept the idea that people might chose to manage their own affairs instead of depending on government.

I want Mr. Ryan to respond to the hecklers “I want to save Medicare!” Politicians who refuse to do anything to fix broken entitlement programs remind me of the meek townspeople in the old Western movies who hide and watch while the hero takes his six shooters out to the street to defend the town. We need fewer politicians who hide and watch while criticizing those who take the risk of proposing changes. The Congressional Budget Office has warned Medicare will go bankrupt without changes. Is proposing changes to make the program better than hiding and watching while it goes bankrupt? I vote yes.