ACA/Obamacare: So You Think ACA is Too Expensive to Maintain…Try Medicare on for Size

"The Trump Administration has promised to deliver to the American people a healthcare plan that is, in President Trump’s own words, “much less expensive and far better” than Obamacare. But While Obamacare is expected to spend over $900 billion from 2018 to 2027, focusing solely on the Obama administration’s signature achievement ignores bigger fiscal challenges; Namely, the Medicare program.

Our insurance program for the elderly and disabled – Medicare – is expected to cost $900 billion in 2024 alone. From 2018 to 2027, this comes to a whopping $8.5 trillion—an order of magnitude larger than the cost of the ACA. Beyond the topline price tag are a number of endangered programs.

Medicare’s hospital insurance trust fund, commonly known as Part A, is expected to run out of money in the next 10 years. This would mean an immediate reduction in benefits when the money runs out—2028, according to the program’s actuaries. Meanwhile, the funds that Medicare uses to pay for physician services (Part B) and prescription drug benefits (Part D) are consistently growing as a share of revenue". - Repeal & Replace: Missing the Medicare Forest for the Obamacare Trees, realclearhealth.com, 02/24/2017

Link to the entire article appears below:

http://www.realclearhealth.com/articles/2017/02/24/repeal__replace_missing_the_medicare_forest_for_the_obamacare_trees_110464.html?utm_source=RCP+Morning+Note&utm_campaign=8da8cfe47f-EMAIL_CAMPAIGN_2016_11_11&utm_medium=email&utm_term=0_a4db5f2336-8da8cfe47f-84790497

　


　

ACA/Obamacare: When Political Constituency Building Schemes Backfire

‘Most Americans don’t want to get rid of Obamacare. They just don’t share its fundamental goal of universal coverage anymore.

And not only did the political benefits that Democrats thought the 2010 law would eventually bring them not materialize, opposition has only grown, according to an analysis of multiple polls taken between 2010 and last month.

“There have been backlashes, but never like this,” said Robert Blendon, a professor at the Harvard School of Public Health and co-author of the analysis released Wednesday by the New England Journal of Medicine.

That backlash doesn’t appear directed at the mechanics of the law but at its underlying core principle.

Only 47 percent of Americans agree that it’s the government’s job to make sure everyone has health coverage, down from 69 percent in 2006, the analysis found. That shift is particularly pronounced among likely voters. Of those who are most likely to show up at the polls on Nov. 4, one in four believe in this principle.

The study includes a new poll of likely voters by the Harvard School of Public Health showing that while only 31 percent want to see Obamacare repealed, 23 percent want it scaled back. This coalition of Republicans and independents could represent a mandate for congressional efforts to diminish the sweeping overhaul four years after it was enacted — and with millions of people now covered under its provisions.

The debate is now “about whether or not you believe you want to get everybody covered,” Blendon said. “Something happened on the way to the forum here that made that a much more controversial value.”’ - Obamacare brings Democrats backlash, not benefits, politico.com, 10/29/2014

Link to the entire article appears below:

http://dyn.politico.com/printstory.cfm?uuid=E93E6E38-06EE-49CA-894A-7C42C716C143

A and B decide on what C is going to do for D [W.G. Sumner's famous formula]

When William Graham Sumner wrote the essay The Forgotten Man he outlined a now famous formula: A and B decide on what C is going to do for D. The underlying concept is that A wants to solve a perceived problem which D is supposedly suffering from. A recruits B who is of like mind. A and B then extract something from C to give to D. The Forgotten Man being C. (1)

Sumner defined the formula as follows:

“The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C's interests, are entirely overlooked. I call C the Forgotten Man”. (2)

How does Sumner define The Forgotten Man?

“….the Forgotten Man and any one who wants to truly understand the matter in question must go and search for the Forgotten Man. He will be found to be worthy, industrious, independent, and self-supporting. He is not, technically, "poor" or "weak"; he minds his own business, and makes no complaint. Consequently the philanthropists never think of him, and trample on him”. (3)

One needs to further consider A and B. Beyond A and B fancying themselves as philanthropic or humanitarians, they in practice act as third party decision makers. The “is going to do” or “made to do”, in the formula above, is the third party decision process.

What prompts A and B to think they have the presence, the knowledge, and the moral high ground to make third party decisions for others? Why must C, The Forgotten Man, need relied upon? If The Forgotten Man is self-sufficient, industrious and requires no assistance, then has not The Forgotten Man done his duty? If C, The Forgotten Man, owes some exogenous duty, would that duty not be the decision of The Forgotten Man?

The next question regarding A and B is why do they merely want to extract from C and give to D …rather than making D like C? One may want to consider that D is not like C, in the main, as D may not be industrious. That is, D likes being D. Moreover, A and B, being that A and B are in point of fact functioning as third party decision makers, may well be made up of two categories: “do-gooders” and those seeking power derived as the third party decision makers. In either case of do-gooders or power extractors, solving D’s perceived problem may well not be their aim. The do-gooder can’t feel “good” nor can the power extractor gain power, without the existence of D and the consequential “is going to do” or “made to do”, in the formula above.

The following are several observations by Sumner that might be enlightening regarding the above discussion:

…the characteristic of all social doctors is, that they fix their minds on some man or group of men whose case appeals to the sympathies and the imagination, and they plan remedies addressed to the particular trouble…

They [social doctors] are always under the dominion of the superstition of government, and, forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion—that the State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.

Hence the real sufferer by that kind of benevolence which consists in an expenditure of capital to protect the good-for-nothing is the industrious laborer. The latter, however, is never thought of in this connection. It is assumed that he is provided for and out of the account.

For our present purpose it is most important to notice that if we lift any man up we must have a fulcrum, or point of reaction. In society that means that to lift one man up we push another down. The schemes for improving the condition of the working classes interfere in the competition of workmen with each other. The beneficiaries are selected by favoritism, and are apt to be those who have recommended themselves to the friends of humanity by language or conduct which does not betoken independence and energy. Those who suffer a corresponding depression by the interference are the independent and self-reliant, who once more are forgotten or passed over; and the friends of humanity once more appear, in their zeal to help somebody, to be trampling on those who are trying to help themselves.

The friends of humanity start out with certain benevolent feelings toward "the poor," "the weak," "the laborers," and others of whom they make pets. They generalize these classes, and render them impersonal, and so constitute the classes into social pets.  (4)

Notes:

(1) The Forgotten Man, and Other Essays ed. Albert Galloway Keller (New Haven, Yale University Press, 1918)

(2) William Graham Sumner, What Social Classes Owe to Each Other, 1883, chapter nine, On the Case of a Certain Man Who is Never Thought of, pages 75 -78

(3) and (4) Ibid

Miller Time: when you have the time, we have more government for you!

“Rep. Brad Miller introduced the Freedom and Mobility in Banking Act on Tuesday. It's a bill that would make the Consumer Financial Protection Bureau create a comparison list of banks and their fees.” (1)

Apparently the economic concept of the rational consumer no longer exists. The original "more is better" economic man has disappeared! Furthermore, the first rational item to go regarding economic man was rational comparison in the area of picking and choosing banking institutions. Go figure!

-Or edited slightly-

Rep. Brad Miller introduced the Further Government Intervention and Reduction of Freedom Banking Act on Tuesday. It's a bill that would make a very expensive government bureaucracy expand and create a government-directed comparison list of banks and their fees.

Apparently political populism still exists. The original "government mysticism" of political populism has not disappeared! Furthermore, the first populism item to continue is government mysticism in the area of picking and choosing banking institutions. Go figure!

How in the world did economic man 1.0, economic man 2.0, all the way up to economic man 2011.0 rationally go about choosing banking institutions without the help of politicos through the mechanism of government? Lucky for economic man his rational comparison abilities/skills can not be supplanted by the Brad Miller's ability to be in direct contact with omniscience and omni-presence delivering vast and perfect knowledge through the mechanism of government.

The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.' – Ronald Reagan

The eight most populist words in the English language are, “I’m Brad Miller, and I’m here to help”.

Notes:

(1)    Myfox8.com, 10/04/2011

http://www.myfox8.com/news/wghp-triad-congressman-proposes-easier-bank-switches-fee-comparison-list-20111004,0,444025.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wghp-localnews+%28WGHP+-+News%29

National Debt: non-sustainable political promises

Government deficits over the next 10 years were recently revised by the Obama Administration to $9 Trillion Dollars from the $7 Trillion Dollars estimate the Obama Administration made only a few months ago. Amazing! In a matter of months the Deficit has increased by 28%! How in the world did the US Government Deficit arrive at $9 Trillion Dollars?

Further, the National Debt stands at $11 Trillion Dollars with the daily increase in debt currently at $3 Billion Dollars.

A better question is what is the US Government going to do about the approximately $62 Trillion, at present value, of unfunded obligations in the areas of Medicare, Medicaid, Social Security and Military Pensions?

How did all this debt pile up? Why is the debt still piling up? How was all this debt allowed to pile up?

In a very broad Marco Economic sense, and in a very broad Political-Economy sense, one clearly needs to examine the inter-relationship between the Political Class, the Producer Class, and the Recipient Class.

The Political Class has been making an argument since the 1930's that the Producer Class has a "moral obligation" to transfer income and wealth to the Recipient Class.

The Recipient Class comes in several varieties. In some instances the Recipient Class collects Welfare, Food Stamps, Tax Credits, Medicaid. In other cases the Recipient Class collects Social Security and Medicare. In other cases the Recipient Class is the Military receiving deferred compensation regarding Military Service Pay. There are also Temporary Recipient Class members such as those receiving Unemployment Insurance.

Its important to point out that the Recipient Class members are in many cases past Producer Class members. That is, a worker or military personnel are within the Producer Class for many years then end up in the Recipient Class in retirement.

Its also important to point out that some Recipient Class members are permanent Recipient Class members such as the extremely unskilled worker and the Welfare Class (those constantly on Welfare through out their working years).

The "wealth" of the Political Class is a factor in this discussion. The wealth of Political Class generally comes in several varieties and needs examined. There are the inherited wealth types such as Rockefeller, Kennedy and Kerry. You have life long Politicians such as Byrd, Rangle and Dodd who accumulate wealth during their extended terms as Politicians. Further, new money wealth Politicians such as Barack Obama and John Edwards exist. The point being, and made by many over the years, is that wealthy Politicians have no financial obligations. They are so wealthy that paying taxes, paying bills, putting children through college, etc., are minor inconveniences.


The wealth of many in the Political Class puts them in a position that money is of no matter and they move into the altruistic/moralization area. It could be argued in the assent to self actualization in the realm of financial resources an additional step exists beyond self actualization regarding finance, which is: the moralistic/altruistic stage.

The wealthy Political Class (sometimes referred to as the Political Elite or Elitists) then begin to moralize to the Producer Class. That the Producer Class must, by moral reasoning, subsidize the Recipient Class.

The wealthy Political Class then enlists other Politicians that have moral/altruistic/collectivism on their agenda.

The Political Class then saddles the Producer Class with obligations to the Recipient Class. The "moral obligations" of the Producer Class to the Recipient Class translate into income and wealth transfers to the Recipient Class. In other words, these supposed moral obligations have a price tag.

At this point there becomes a disconnect.

The Political Class wants to promise so much to the Recipient Class that economic activity of the Producer Class would be so depressed, the economy would constantly be in recession. Taxes would be so high that incentives for the Producer Class would be so low, economic activity would fall. A constantly depressed economy would threaten the electability of the Political Class.

What kind of tax increases would be required to sustain such past and future promises? How about 50%. (1) A 50% tax increase would send the economy into a major tail spin now and in the long run.

Therefore, all of the past and future Moral Obligations that the Political Class has saddled the Producer Class with, as transfers to the Recipient Class, have been "financed". In other words, the wealth and income transfers from the Producer Class to the Recipient Class were promises that were not economically sustainable on a current account basis, hence the obligations were financed.

Its highly likely the financed promises were in fact financed to extend the political careers of the Political Class.

There is an unknown, yet certain point, where the financed promises accumulate to a level that is not sustainable. The unknown, yet certain point of non-sustainable financed promises, that began in the 1930's, has arrived.

Think of this argument for a moment. The argument by Pro Health Care Reform proponents is that Health Care costs are rising too quickly and need reined in via reform. Health Care costs are not rising any faster than Government Debt. However, the Government Debt increase is never mentioned in the same breath as Health Care Cost increases.

The bottom line is that the promises of Politicians to the Recipient Class do not match the ability of the economy and the Producer Class to pay for such promises. Since prior promises are not affordable, and given the unsustainable debt level, future promises have to go on hiatus for years and years to come. Sorry, no more promises. In effect the size and scope of Government needs reversed. Prior promises need reduced to match what is affordable. In the mean time the smaller government and smaller promises yield savings that need directed to reduction in Debt. It may take 20 or 30 years to reduce debt to levels that make financial sense.



(1) http://www.scrivener.net/2009/08/krugman-versus-krugman-on-deficits-and.html