Browsed by
Tag: Medicare

Media and Politicians Ignore Oncoming Financial Crisis – Article by Ron Paul

Media and Politicians Ignore Oncoming Financial Crisis – Article by Ron Paul

The New Renaissance Hat
Ron Paul
July 7, 2019
******************************

The mainstream media was too busy obsessing over Russiagate to notice that, according to an annual Social Security and Medicare Boards of Trustees report, the Social Security trust fund will run out of money by 2035. The trustees also reported that the Medicare Hospital Insurance trust fund will be empty by 2027.

The trustees’ report is actually optimistic. Social Security is completely funded, and Medicare is largely funded, by payroll taxes. Therefore, their revenue fluctuates depending on the employment rate. So, when unemployment inevitably increases, payroll tax revenue will decline, hastening Medicare and Social Security’s bankruptcy.

Another dark cloud on the government’s fiscal horizon involves the Pension Benefit Guaranty Corporation (PBGC), which provides federal bailouts to bankrupt pension plans. The PBGC currently has an over 50 billion dollars deficit. This deficit will almost certainly increase, as a number of large pension funds are likely to need a PBGC bailout in the next few years. Congress will likely bail out the PBGC to avoid facing the wrath of voters angry that Congress did not save their pensions.

Unfunded liabilities like Social Security and Medicare are not included in the official federal deficit. In fact, Congress raids the Social Security trust fund to increase spending and hide the deficit’s true size, while leaving the trust fund with worthless IOUs.

The media also ignored last week’s Congressional Budget Office (CBO) report predicting the federal debt will increase to an unsustainable 144 percent of the gross domestic product by 2049. The CBO’s report is optimistic as it assumes interest rates remain low, Congress refrains from creating new programs, and there are no major recessions.

Few in Congress or in the Trump administration are even talking about the coming fiscal tsunami, much less proposing the type of spending cuts necessary to pay down the debt and have the funds to unwind the entitlement programs without harming those currently reliant on them. Instead, both parties support increasing spending and debt.

Republican control of both houses of Congress and the While House led to increased federal spending of over $300 billion dollars. The House Democratic majority now wants even more spending increases. House Speaker Nancy Pelosi is threatening to not raise the debt ceiling unless President Trump and congressional Republicans agree to lift the spending caps put in place by the 2011 budget deal.

The Republican Congress routinely exceeded the caps’ minuscule spending limits. Therefore, Speaker Pelosi should have no problem getting President Trump and his Republic congressional allies to once again exceed the caps on welfare spending as long as Democrats agree, as they are likely to agree, to bust the caps on warfare spending.

America’s military budget already equals the combined budgets of the next seven highest-spending countries. Instead of allowing himself to be neoconned into wasting trillions on another Middle East quagmire, President Trump should bring home the nearly 170,000 troops stationed in almost 150 countries.

Unless Congress immediately begins making substantial spending cuts, America will soon face a major economic crisis. This crisis will likely involve the Federal Reserve’s debt monetization resulting in a rejection of the dollar’s world reserve currency status. Since the media and most politicians refuse to discuss this topic, it is up to those of us who understand the truth to spread the word, grow the liberty movement, and force politicians to make real cuts right now.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Commonly Misunderstood Concepts: Health Care (2009) – Article by G. Stolyarov II

Commonly Misunderstood Concepts: Health Care (2009) – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
Originally Published October 12, 2009
as Part of Issue CCXI of The Rational Argumentator
Republished July 24, 2014
******************************
Note from the Author: This essay was originally published as part of Issue CCXI of The Rational Argumentator on October 12, 2009, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 24, 2014
****
***

It is an odd society indeed where such a seemingly simple idea as health care is so severely misunderstood. Health care, as the constituents of the term suggest, is simply caring for one’s health, where health – of course – is the physical integrity and unobstructed functioning of one’s body. A healthy person is one whose body is not breaking down, one who is not in constant pain, one who is going to live for a long time unless some unforeseen external peril – such as an accident or an assault – violates the integrity of one’s body from without.

In a society where there exists advanced scientific medical knowledge, it is possible to benefit one’s health by consulting with certain individuals who specialize in aspects of this knowledge. These individuals are also useful in detecting diseases or other malfunctions that are not obvious to the intelligent layman, and they also do a commendable job in researching cures for diseases that have hitherto been without remedy. Most doctors are to be praised for the excellent work they do, and I am confident that any doctor worthy of his M.D. degree would strongly concur with the fundamental understanding of health care that I posit here.

Most people will recognize that doctors play an important and sometimes necessary role in the provision of health care. What many people today fail to recognize, however, is that doctors are never a sufficient part of genuinely effective health care. Doctors can indeed often detect signs of illness and recommend remedies, but to expect a doctor to perform all of your health care for you is just like expecting a teacher to perform all of your education for you. Doctors and teachers can both help and can even at times make the difference between success and failure, but without your participation and your vigilance, failure is inevitable.

What are other crucial components of health care? They are not esoteric, and they do not require specialized knowledge. They include eating in moderation, exercising regularly, avoiding harmful substances, practicing at most monogamy, keeping one’s surroundings clean, and avoiding risks to life and limb as much as possible. There are also numerous over-the-counter medications and first aid practices, that, if used intelligently, can enable individuals to recover from many minor and even some major perils. These habits are not just little frills added on to the body of health care; they are that body, and without them, one will be quite dead quite soon – but not before racking up absurd amounts of medical expenses. I will note that in the 20th century, human life expectancy in the West surged from the mid-to-late forties to the late seventies. Although medical advances were phenomenal during that time, the vast majority of the increase can be attributed to improvements in overall cleanliness of infrastructure and healthier habits. With the advent of sanitation, regular dental hygiene, automatic washers and dryers, and efficient household cleaning supplies, a lot of infectious diseases that formerly wiped out millions were kept at bay – mostly not by doctors, but by ordinary laypersons living their lives in a superior manner to that of their ancestors. New technologies motivated new behaviors, and these everyday behaviors are our first and so far our best line of defense against disease and decay.

Of course, some people who lead their lives in the most health-conscious manner possible can still be afflicted by catastrophic diseases for reasons that are none of their fault. As far as medical science is aware, many cancers do not appear to be caused by any active human behavior; indeed, some are an unfortunate product of poor genes. And, of course, there is the ultimate killer – senescence – which afflicts all humans, given the current level of medical technology. It is imperative that these perils be eradicated as soon as possible, and the best doctors, scientists, and media advocates are needed to enable a victory over what can justly be called the greatest threats to humans everywhere. I will add that it is a matter of justice that a person who suffers from a disease which he did not cause receive prompt, efficacious, and affordable care. But the vital question – and the question many people today neglect to consider – is how this just state of affairs can possibly come about.

Reality only works in certain ways, in accord with immutable natural laws. Wishing for a good outcome will not make it so, and even acting toward that outcome will only work if the right actions are undertaken. Any reasonable, moral person will agree that it is preferable for all reasonable, moral people to be healthy rather than not. What many people fail to recognize is that any process of improvement takes time, and that surrogate measures that attempt to bring about the improvement instantaneously are not only illusory but can also be severely counterproductive.

As a case in point, I bring forth the oft-encountered contemporary confusion of health care with health insurance. Too many people today believe that it is not taking care of oneself and visiting doctors when necessary that constitutes good health care, but rather the presence ofhealth insurance, which – at least in theory – promises to pay for some of the medical attention one receives from doctors. These individuals see statistics stating that millions do not have health insurance, and they mistakenly assume that these individuals do not have adequate health care. But it is entirely possible for a person to have healthy habits and – especially if this person is young – to not require extensive or expensive medical attention. It is also possible for a person to be sufficiently wealthy to afford to pay for the doctors he wishes to visit. Moreover, it is possible for a person to rely on the charity of doctors in providing any medically necessary attention – as was the case for centuries before health insurance came about, when most doctors would treat all patients but would charge them differential rates based on their ability to pay. In effect, with these traditional doctors, the rich voluntarily subsidized the poor on a largely free market, in a manner beyond the wildest dreams of the advocates of socialized medicine today.

Of course, the presence of health insurance cannot avert the need to seek the attentions of doctors. Indeed, a well-known concept in insurance, moral hazard, suggests that in some cases, an insured individual may actually be more likely to fall victim to a peril than an uninsured individual, because the insured individual is shielded from some of the financial consequences of the loss. Insurance can make life easier for some people in some cases, and it can also be a good safeguard for catastrophes, but it is neither necessary nor sufficient for proper health care. Indeed, the manner in which health insurance has developed in the United States is one of the contributing factors to the astronomically increasing prices of specialized medical care. Health insurance in the U. S. is not provided on a largely free market like most forms of property insurance. Instead, it is mostly tied to one’s employment by virtue of the market-distorting tax breaks that employers receive for providing health insurance. One does not need to worry about what happens with one’s car insurance if one loses a job, but losing one’s job can severely damage one in the realm of health insurance.

Since employers began to receive favorable treatment from the federal government for providing health insurance in the 1940s, the health insurance snowball has continued to embroil more people in a crisis of increasing proportions. The people who got the subsidized insurance had an incentive to spend more money than they usually would on doctors – often an outcome of hypochondria rather than of a reasonable concern for health. As demand for medical services rose, so did the cost, and so the people who did not have insurance – especially the elderly and unemployed – found it more difficult to afford even basic services. The federal government’s solution? Medicare and Medicaid, which put the elderly and unemployed in the same position to spend more freely that the previously insured had. This, of course, further increased the demand for and price of specialized medical services. With the recent vast expansion of Medicare under the Bush administration, it is no surprise that prices have further skyrocketed.

Now, because so many people have subsidized health insurance, it has become extremely difficult to afford medical care for catastrophic situations without it. This is not a necessary component of health care in a quasi-advanced society; it is a creation of bad policies that incrementally expanded the scope of the present crisis. An even worse policy is on the horizon; it is not socialized healthcare yet, but in some respects it may even be worse. The Obama administration and its supporters in Congress threaten to require everyone to purchase health insurance and to eliminate the aspect that makes it insurance – selection and pricing on the basis of the risks posed by the insureds. Forcing people to purchase health insurance and prohibiting discrimination on the basis of pre-existing conditions are the same as making the healthy subsidize the ill and charging everyone roughly the same general rates. With this kind of incentive system in place, it is only logical to assume that many people who otherwise would have lived spectacularly would begin to demand medically unnecessary attention simply to be net beneficiaries of the system where everyone ostensibly subsidizes everyone else. This cannot continue indefinitely, as resources are finite, and the inevitable recourse by the government will be the rationing of medical services – a political selection of who lives and who dies. This scenario – so common in many countries in the West today, including Britain and Canada – is the opposite of genuine health care. Indeed, denying care to an individual who could afford it and placing that individual on a waiting list on which he dies is nothing short of murder.

Only a massive shift in public opinion and government policy can extricate us from the entanglement of health care with health insurance and return us to the direct relationship between patients and doctors, as well as the optimal amount of motivation for each individual to care for his own health. Until then, stay healthy and try to make sure that you do not need the care that gets rationed – if you can.

Read other articles in The Rational Argumentator’s Issue CCXI.

Charity, Compulsion, and Conditionality – Video by G. Stolyarov II

Charity, Compulsion, and Conditionality – Video by G. Stolyarov II

Libertarians’ opposition to coercive redistribution of wealth does not mean that they are opposed to charitable giving that improves people’s lives.

In this video, Mr. Stolyarov analyzes why private charities are more effective in benefiting their intended recipients than programs which involve coercive redistribution of wealth. Paradoxically, it is the extreme conditionality of many coercive welfare programs that leads them to be less effective than the voluntary decisions of diverse individuals and organizations.

References

– “The Costs of Public Income Redistribution and Private Charity” – James Rolph Edwards – Journal of Libertarian Studies – Summer 2007
In Our Hands: A Plan To Replace The Welfare State (2006) – Book by Charles Murray

The CBO Sees the Economic Cliff Ahead – Article by Ron Paul

The CBO Sees the Economic Cliff Ahead – Article by Ron Paul

The New Renaissance Hat
Ron Paul
June 19, 2012
******************************

In early June 2012 the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.

While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.

As Paul Roderick Gregory explained in a recent Forbes column (http://tinyurl.com/cf746dl), CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy.  Neither is true, of course.

CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.

Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government.  If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.

If we simply allowed markets to work free of governmental or Federal Reserve interference, bad debt would be liquidated relatively quickly and malinvestment would be curtailed. Scaled-back regulations would encourage businesses to expand. Lower taxes would jump start investment and spur job creation.

This is not rocket science, it is Economics 101. All it would take is for government to get out of the way. There would be some short term pain, of course, but only by allowing the bubble to burst and bad debt to liquidate can we ever hope to begin building a real economy again.

The CBO report was alarming to most simply because they know neither party will take the steps necessary to avoid eventual fiscal calamity. Instead, despite their rhetoric, both parties want to maintain the fantasy that “deficits don’t matter.” But the CBO report, combined with what is happening in Greece and the European Union, should finally make the undeniable case that economic realities apply even to industrialized first world economies. We must take concrete steps today to avoid having America become the next Greece.

Representative Ron Paul (R – TX), MD, is a Republican candidate for U. S. President. See his Congressional webpage and his official campaign website

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.