Wednesday, March 13, 2013
Tuesday, March 12, 2013
Deconstructing Lyin' Ryan (Again) in [Market-Ticker]
Deconstructing Lyin' Ryan (Again) in [Market-Ticker]
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Deconstructing Lyin' Ryan (Again)
Ok, now we have the document.
I want to focus your attention in one place, and only one place -- because it's the only place that matters.
Social Security has expanded at a rate of about 6% annually over the last 30 years. That's fairly close. But Medicare and Medicaid are not; the expansion from 1980 to today has been at a average compounded rate of approximately 9% and full-charge hospital bills are currently expanding at 10% a year and have been for the last several years.
Note carefully that the latter is not the government's cost, it's the cost in the broad economy!
Leave the net interest aside as that's a consequence of the two pieces directly under it.
Note that Social Security, after rising for a few years, begins to plateau and in fact starts to fall after about 2030. That's because the Boomers begin to pass on.
The medical explosion is not due to the boomers. It is due to the underlying systemic expansion of cost that in turn is driven by monopoly practices and cost-shifting, mostly to people in the United States.
A particularly outrageous but by no means isolated example is the scorpion antivenom that I wrote about -- made in Mexico for $100/dose and north of $35,000 a dose when administered in a US hospital. That's a mark-up of more than 350 times cost!
But it gets worse. Ryan claims that there's a "raid" on the Medicare "trust fund." He's lying.
Last year Medicare took in $201 billion in tax revenues. But between Medicare and Medicaid the Federal government spent just north of one trillion dollars, or five times what it took in. There is no "trust fund" to raid when you are spending five times the amount you collected in taxes. Any such assertion is a bald lie.
Worse, the attempted shift of Medicaid to the states will bankrupt all of them within five years. That's the arithmetic -- there is no state in the union that can shoulder that expense.
The only solution is to collapse the medical cost structure. It's politically damnable but it has to be done, and done now. Any budget proposal that doesn't have this as its centerpiece is un-serious and unworthy of consideration as it is an open, notorious and public fraud.
A beginning point for this could come in the form of a single two-paragraph law that requires that all health providers publish a price list and charge everyone the same price, irrespective of how they pay. This would make direct comparison of cost possible, and while a minority of care is paid in cash the fact remains that the cash customers would prefer competent care at a lower price over one that is five or ten times as expensive, as is often the case now. This would immediately collapse the high-cost outlier providers, forcing them to either cut that crap out or remove them from the market.
The second step is to remove both EMTALA and all anti-trust protection from the entire medical industry. And the third is to require insurance companies to actually sell insurance -- once the insured-against event happens you no longer have to pay anything -- the company pays you, unlike the present system where you can be co-billed for ridiculous amounts of money and must maintain premium payments or worse, are subject to cancellation even though you paid in for the unexpected and unlikely adverse event!
Ryan's budget also assumes GDP growth of more than 5% annually over the next ten years with no recessions, a feat that has never been achieved in the post-WWII era according to our government's own data. The use of the word "cut" in a budget that grows spending by 3.5% compounded annually is an outrageous lie as well.
But while railing against this is appropriate and necessary, none of it will matter if we don't deal with the medical problem now.
Within approximately two years Medicare, Medicaid, Social Security and interest payments will consume all tax receipts. At some point before that happens the markets are nearly-certain to deduce that we are not serious about attending to the budgetary imbalance as we're then borrowing to pay the light bill in the Capitol, say much less anything important like Defense.
When, not if, that recognition occurs there is literally nothing that The Fed or the Government will be able to do about the ensuing flight from assets in this country, as the only remaining step available to the government to fund this escalation of spending will be outright confiscation of some form.
As I have no indication at present that anyone on The Hill will even discuss the fundamental arithmetic that lays behind this irrefutable truth, say much less reduce it to legislative language and introduce it as a bill despite several years of attempting to do so, I am forced to recommend that you prepare for the worst.
I hereby withdraw my formerly-expressed guarded optimism.
I want to focus your attention in one place, and only one place -- because it's the only place that matters.
In the next decade, Social Security will grow at an annual average of 5.8 percent. Medicare will grow at 6.2 percent. And Medicaid—thanks in part to its expansion under the health-care law—will grow at an astounding 9.9 percent. All of these programs are growing substantially faster than the economy.....Good luck on those astoundingly optimistic figures.
Social Security has expanded at a rate of about 6% annually over the last 30 years. That's fairly close. But Medicare and Medicaid are not; the expansion from 1980 to today has been at a average compounded rate of approximately 9% and full-charge hospital bills are currently expanding at 10% a year and have been for the last several years.
Note carefully that the latter is not the government's cost, it's the cost in the broad economy!
Leave the net interest aside as that's a consequence of the two pieces directly under it.
Note that Social Security, after rising for a few years, begins to plateau and in fact starts to fall after about 2030. That's because the Boomers begin to pass on.
The medical explosion is not due to the boomers. It is due to the underlying systemic expansion of cost that in turn is driven by monopoly practices and cost-shifting, mostly to people in the United States.
A particularly outrageous but by no means isolated example is the scorpion antivenom that I wrote about -- made in Mexico for $100/dose and north of $35,000 a dose when administered in a US hospital. That's a mark-up of more than 350 times cost!
But it gets worse. Ryan claims that there's a "raid" on the Medicare "trust fund." He's lying.
Last year Medicare took in $201 billion in tax revenues. But between Medicare and Medicaid the Federal government spent just north of one trillion dollars, or five times what it took in. There is no "trust fund" to raid when you are spending five times the amount you collected in taxes. Any such assertion is a bald lie.
Worse, the attempted shift of Medicaid to the states will bankrupt all of them within five years. That's the arithmetic -- there is no state in the union that can shoulder that expense.
The only solution is to collapse the medical cost structure. It's politically damnable but it has to be done, and done now. Any budget proposal that doesn't have this as its centerpiece is un-serious and unworthy of consideration as it is an open, notorious and public fraud.
A beginning point for this could come in the form of a single two-paragraph law that requires that all health providers publish a price list and charge everyone the same price, irrespective of how they pay. This would make direct comparison of cost possible, and while a minority of care is paid in cash the fact remains that the cash customers would prefer competent care at a lower price over one that is five or ten times as expensive, as is often the case now. This would immediately collapse the high-cost outlier providers, forcing them to either cut that crap out or remove them from the market.
The second step is to remove both EMTALA and all anti-trust protection from the entire medical industry. And the third is to require insurance companies to actually sell insurance -- once the insured-against event happens you no longer have to pay anything -- the company pays you, unlike the present system where you can be co-billed for ridiculous amounts of money and must maintain premium payments or worse, are subject to cancellation even though you paid in for the unexpected and unlikely adverse event!
Ryan's budget also assumes GDP growth of more than 5% annually over the next ten years with no recessions, a feat that has never been achieved in the post-WWII era according to our government's own data. The use of the word "cut" in a budget that grows spending by 3.5% compounded annually is an outrageous lie as well.
But while railing against this is appropriate and necessary, none of it will matter if we don't deal with the medical problem now.
Within approximately two years Medicare, Medicaid, Social Security and interest payments will consume all tax receipts. At some point before that happens the markets are nearly-certain to deduce that we are not serious about attending to the budgetary imbalance as we're then borrowing to pay the light bill in the Capitol, say much less anything important like Defense.
When, not if, that recognition occurs there is literally nothing that The Fed or the Government will be able to do about the ensuing flight from assets in this country, as the only remaining step available to the government to fund this escalation of spending will be outright confiscation of some form.
As I have no indication at present that anyone on The Hill will even discuss the fundamental arithmetic that lays behind this irrefutable truth, say much less reduce it to legislative language and introduce it as a bill despite several years of attempting to do so, I am forced to recommend that you prepare for the worst.
I hereby withdraw my formerly-expressed guarded optimism.
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Discuss The Capital Markets along with daily technical analysis with our Gold Donor program.Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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| User Info | Deconstructing Lyin' Ryan (Again) in forum [Market-Ticker] | |||
| Asimov Posts: 101913 Incept: 2007-08-26  East Tennessee Eastern Time Online   | ---------- It's justifiably immoral to deal morally with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente. 2013-03-12 12:38:53 Permalink | |||
| Jal Posts: 485 Incept: 2009-03-25 | 2013-03-12 12:41:45 Permalink | |||
| Goforbroke Posts: 5212 Incept: 2007-11-30  Just call me 'Comrade' Online | ---------- We have met the enemy and it is us. -- Pogo 2013-03-12 12:42:47 Permalink | |||
| Genesis Posts: 128527 Incept: 2007-06-26  | ---------- I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear? 2013-03-12 12:43:55 Permalink | |||
| Ugrev Posts: 128 Incept: 2010-03-08 The police state of NY | 2013-03-12 12:47:09 Permalink | |||
| Genesis Posts: 128527 Incept: 2007-06-26 | ---------- I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear? 2013-03-12 12:49:15 Permalink | |||
| Local_yokel Posts: 117 Incept: 2008-12-18  | 2013-03-12 12:58:01 Permalink | |||
| Genesis Posts: 128527 Incept: 2007-06-26 | ---------- I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear? Last modified: 2013-03-12 13:00:23 by genesis 2013-03-12 12:59:36 Permalink | |||
| Mrbill Posts: 7702 Incept: 2008-10-19 North Carolina | 2013-03-12 13:01:25 Permalink | |||
| Local_yokel Posts: 117 Incept: 2008-12-18 |  I see my mistake: I didn't read the chart well enough. The Y-Axis is percent of GDP, not dollars. Last modified: 2013-03-12 13:05:19 by local_yokel Reason: Added explanation. 2013-03-12 13:03:18 Permalink | |||
| Iou Posts: 917 Incept: 2009-03-16 The Twilight Zone Online | ---------- "When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it."- Frédéric Bastiat 2013-03-12 13:06:41 Permalink | |||
| Gatecrasher Posts: 3 Incept: 2012-09-03 | Last modified: 2013-03-12 13:09:10 by gatecrasher Reason: html fail 2013-03-12 13:08:26 Permalink | |||
| Apotheoun Posts: 648 Incept: 2009-08-14 MN | ---------- "when despair is all you can see, the end is finally near." "Because there is some good left in this world, AND ITS WORTH FIGHTING FOR!" 2013-03-12 13:17:15 Permalink | |||
| Cerich Posts: 536 Incept: 2008-12-17 ga | 2013-03-12 13:20:37 Permalink | |||
| Twainfan Posts: 131 Incept: 2010-12-01 Minnesota | 2013-03-12 13:22:03 Permalink | |||
| Apotheoun Posts: 648 Incept: 2009-08-14 MN | ---------- "when despair is all you can see, the end is finally near." "Because there is some good left in this world, AND ITS WORTH FIGHTING FOR!" 2013-03-12 13:22:36 Permalink | |||
| Fraudster Posts: 3803 Incept: 2011-05-10  Online |  ---------- "Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte "Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov 2013-03-12 13:29:32 Permalink | |||
| End_the_bubbles Posts: 9393 Incept: 2009-03-25 The New 3rd World | ---------- In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant's feet and rise in rebellion to overthrow their masters. 2013-03-12 13:29:42 Permalink | |||
| Northeaster Posts: 51 Incept: 2011-05-13 Massachusetts | Last modified: 2013-03-12 13:32:45 by northeaster Reason: grammar 2013-03-12 13:31:19 Permalink | |||
| Jal Posts: 485 Incept: 2009-03-25 | 2013-03-12 13:32:25 Permalink | |||
| Apotheoun Posts: 648 Incept: 2009-08-14 MN | ---------- "when despair is all you can see, the end is finally near." "Because there is some good left in this world, AND ITS WORTH FIGHTING FOR!" 2013-03-12 13:33:02 Permalink | |||
| Fraudster Posts: 3803 Incept: 2011-05-10 Online | ---------- "Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte "Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov 2013-03-12 13:33:48 Permalink | |||
| Donethat Posts: 744 Incept: 2009-04-22 | 2013-03-12 13:41:19 Permalink | |||
| Goforbroke Posts: 5212 Incept: 2007-11-30 Just call me 'Comrade' Online | ---------- We have met the enemy and it is us. -- Pogo 2013-03-12 13:46:19 Permalink | |||
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