The Death of Obama's Healthcare Reform

Soon Medicare will face a moment of truth. The previous positive cash flow has already gone negative. The baby-boomers are about to retire to draw money out of the system instead of paying into it. They will also begin drawing money out of their retirement plans instead of paying into them, reducing the capitalization of our economy. Please read this congressional testimony from a year ago:

“Significant uncertainty surrounds long-term fiscal projections, but under any plausible scenario, the federal budget is on an unsustainable path—that is, federal debt will grow much faster than the economy over the long run. In the absence of significant changes in policy, rising costs for health care and the aging of the U.S. population will cause federal spending to grow rapidly. If federal revenues as a share of gross domestic product (GDP) remain at their current level, that rise in spending will eventually cause future budget deficits to become unsustainable. To prevent deficits from growing to levels that could impose substantial costs on the economy, revenues must rise as a share of GDP, or projected spending must fall—or some combination of the two outcomes must be achieved.

. . .

The Congressional Budget Office (CBO) projects that total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050 and

19 percent in 2082—which, as a share of the economy, is roughly equivalent to the total amount that the federal government spends today. The bulk of that projected increase in health care spending reflects higher costs per beneficiary rather than an increase in the number of beneficiaries associated with an aging population.”

http://www.cbo.gov/ftpdocs/93xx/doc9385/06-17-LTBO_Testimony.pdf

This inescapable reality says we will have to pay more for less benefits. But politicians are promising just the opposite, to people who believe that they should get even more benefits, much sooner, without paying anything. Such demands cannot be met.

Seeing how our government is handling a much smaller crisis in the banking industry, failing to correct course before it collapsed the housing industry, and the automobile industry, I worry that no one in our nations capital is prepared to avoid this massive iceberg that will sink our ship. Instead people continue to demand more benefits to be paid by younger generations, as if Chinese lending is a bottomless well. Do you have grandchildren? Look what you are doing to them.

The 'human condition' is what it is, and politicians have no power to improve upon it. They are merely promising to let us continue living beyond our means, at the expense of those younger than us. The question is whether or not you believe that your grandchildren should become slaves to the government for the rest of their lives through ever increasing taxation, to continue providing you with economic benefits from the government, you believe are owed to you.

Barry of CA 3:08PM June 23, 2009