Guest Post: The Problem With Social Security And Medicare
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Projections based on high rates of endless growth are delusional. Those who embrace these projections are equally delusional.
I regularly receive rants that accuse me of a "blind spot" regarding Social Security and Medicare. The j'accuse trots out projections that the program is solvent until 2037 (or whatever, i.e. the distant future). Then they accuse me of ignoring the real cause of our national bankruptcy, defense spending (every "progressive's" single-agenda cause of all our problems).
The drawdown of Social Security and HI Trust Fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the seventh consecutive year, the Social Security Act requires that the Trustees issue a “Medicare funding warning” because projected non-dedicated sources of revenues primarily general revenues are expected to continue to account for more than 45 percent of Medicare’s outlays in 2013, a threshold breached for the first time in fiscal year 2010.Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible. Taking action sooner rather than later will leave more options and more time available to phase in changes so that the public has adequate time to prepare.
Are Empire and Democracy Compatible? (August 21, 2009)
The United States of Delusion (January 4, 2013)
Did The Roman Empire Have Corporations? (August 27, 2010)
How Empires Fall (April 17, 2013)
3. I do not object to social spending programs; what I object to is bogus accounting, delusion being fobbed off as reality, waste, fraud, embezzlement, profiteering, saddling future generations with unpayable debts and misleading projections that ignore real-world trends. There is a difference between blindly accepting what amounts to officially sanctioned lies about social programs' sustainability and supporting sustainable social spending.
If the SSA blew the estimate for the fiscal year ending in October this badly in August of the same year, what faith can we plausibly place in their estimates of what will happen in 2025 and 2037? The SSA numbers published in the August 2010 report estimated that outlays would not exceed revenues (excluding interest income) until 2015--yet outlays already exceeded income by a staggering $76 billion in 2010.
Where There Is Ruin II: Social Security (July 25, 2006)
The Fraud at the Heart of Social Security (January 17, 2011)
To Fix Social Security, First Ask Why It Is Deep in the Red (January 18, 2011)
How To Fix Social Security: A 4-Point Plan That Faces the Brutal Realities (January 19, 2011)
Sickcare Will Bankrupt the Nation--And Soon (March 21, 2011)
To cite another example of the distortions which end up costing the nation twice as much for health care (as a percentage of GDP) as competing developed countries such as Australia and Japan: Pittsburgh has almost as many MRI machines as the nation of Canada.
According to local media reports, Western Pennsylvania has about 140 MRI machines, while the 32 million residents of Canada share 151 MRI machines. And the machines are getting a lot of use: the number of CT and MRI scans (scans other than old-fashioned X rays) tripled from 85 to 234 per thousand insured people since 1999.
While proponents are quick to note that scans are cheaper than the alternative diagnostic procedures, one firm's research found that a doctor who owns his own machine is four times as likely to order a scan as a doctor who doesn't.
As if that wasn't enough to highlight the self-serving nature of "fee for service" cartels, MRI scanner manufacturer General Electric waged a two-year lobbying campaign to roll back cuts in Medicare reimbursements for scans. While the effort proved unsuccessful due to the intense political pressure to reduce soaring Medicare costs, some critics claim that providers simply made up the reduced reimbursements by increasing the number of tests administered.
The only solution that actually addresses the systemic problem is to get rid of the entire fee-for-service structure and break up the cartels. Healthcare must be reconnected to diet, nutrition, fitness, lifestyle and community, and to education and emotional well-being.
The odds of any of this happening are essentially zero, and so we can safely predict that sickcare will bankrupt the nation (with a helping hand from the Pentagon) within a few years.
While healthcare costs are rising around the developed world due to the demographics of aging and more treatment options, the U.S. sickcare system costs twice as much as our competitors' systems. In other words, we know that 50% of our sickcare costs are inefficiency, waste and fraud because other nations provide universal healthcare for half of what the U.S. spends per person.

That Which is Unsustainable Will Go Away: Medicare (May 16, 2012)
Healthcare: A Large-Scale Solution (January 4, 2011)
A Sustainable National Healthcare System: Prevention Only (August 20, 2012)
Why "Healthcare Reform" Is Not Reform, Part I (December 28, 2009)
Why "Healthcare Reform" Is Not Reform, Part II (December 29, 2009)