Medicare's Accelerating Insolvency Date

Lawrence O'Donnell, the MSNBC primetime news anchor, defended socialism on C-SPAN during an interview on Tuesday.  He cited the well-managed socialist Medicare program as a justification for our having a high regard for much of socialism.

He did not point out that a June 2018 report by the the Medicare trustees projects that the Part A Medicare Hospital Insurance trust fund will be depleted (wiped out) by 2026.  He also did not point out that the Medicare trustees had projected that fund to be wiped out in 2029 only one year earlier.  So much for the projections of socialists.  A rational evaluator has to wonder if the 2019 projection by the Medicare trustees will be a zeroing of the fund in 2023 and the 2020 projection will be that the fund is empty in 2020.  I am just projecting here based on my poor opinion of government programs in general and two data points, but rational people should always be realistic and pessimistic about such programs.

It is a good thing for Medicare that Anna and I are still working well past normal retirement ages and paying into Medicare (and Social Security) and I am still operating my laboratory and paying half of the Medicare payments for each of my employees.  Of course I am also paying half of their Social Security payments as well.  These wonderful examples of socialism in the minds of many are largely paid for by transferring the costs to employers.  That makes the programs more popular with most of the voters, who are of course not employers.

It is going to be very interesting indeed as more and more Baby Boomers retire and their medical expenses increase and increase.  The medical care provided by Medicare will have to further deteriorate and the taxes on those working will have to go up.  The aged will be very grumpy and the geese being plucked of their feathers are going to put up quite a ruckus.  Will the young American impostors who so often think highly of socialism think as highly when they are paying much more for it before they get their take-home pay, even as those on Medicare and Social Security grumble more and more about how disappointed they are in the programs that are breaking the backs of younger American workers?

Of course the die-hard socialists will not care one iota because this is just reality and their emotions should never, ever be held hostage by reality.

Americans On Medical Care Subsidies Under ObamaCare

It is important to know how many Americans will be receiving government subsidies for medical care once ObamaCare takes effect in a few months.  I was looking at a article by Robert Romano, the Senior Editor of Americans for Limited Government.  His article is Why Obamacare always was a public option.  Unfortunately, I found upon examining this article more closely, that his numbers do not add up.  The outcome is worse than his totals imply.  [See Robert Romano's comment below.  He has set me straight on the errors I will correct in brackets below.]

Unemployed and Given Up on Finding Employment = 22 million
Pregnant Women, Disabled, and Nursing Home People on Medicaid now = 27 million
Children on Medicaid now = 31 million
Medicare Enrolled = 49 million
Workers making $45,960 or less, new under ObamaCare = 113 million [counts those adults already enrolled on Medicaid and Would-be Workers who are Unemployed]

Total Number of Medical-Expense Subsidized Americans =  242 million [- 22 - 27 million = 193 million, as Robert Romano wrote]

To be sure, there may be some people in more than one of these categories.  A few people who are unemployed may already be on Medicaid.  People in nursing homes may be enrolled in Medicare.  The total is probably a bit lower than 242 [193] million then.  However, some of the unemployed not on Medicaid have children and they will be in families receiving subsidies and therefor benefiting.  The U.S. population now is 316 million.

242/316 = 0.766 [193/316 = 0.611],

so it appears that [three-fifths] of Americans will be getting subsidized medical care!

How is the remaining two-fifths of Americans supposed to sustain this burden?  Should we not expect that many of them will be drawn under as the costs are put on their backs more and more?  This burden will actually increase the number of poor in America and hence those eligible for subsidies.

While getting subsidized medical care, many college graduates over 26 years old with jobs will soon not only be paying their unforgivable student loans, but will also be paying a fortune for health insurance at costs to provide for the very sick and older people or fined a minimum of $695 a year for not having expensive government-approved health insurance.  Those without jobs will also be fined $675 a year for not having insurance, which means almost all of such unemployed people will have to apply for the government subsidies.  Your life will be hard, but if you voted for Obama, it will be a just consequence.  Life is commonly hard on the irrational.  The exception is the irrational members of Congress who voted for ObamaCare or who have failed to defund it and who are being allowed to escape its draconian provisions in a most unlawful manner.

Obama Wants Bigger Government on Top of This?

From his State of the Union address, it could not be more clear that Obama wants a much bigger government with much more spending and much more control over our lives.  He wants to impose this further growth upon the already unbelievable increases in government spending since 2002 as shown in this great graphic from the current issue of the magazine of the National Federation of Independent Businesses:

Of course there is no limit to the extraction of money, time, and other resources from the private sector for the use of the government sector in this fool's mind.  All of these programs have grown much faster than real, per capita income has in that time.  This has been especially true during the four years Obama has occupied the White House.  This is a huge problem he simply does not recognize, which means he is either incredibly dumb or incredibly evil.

Economic Stagnation, Unsustainable Debt, Lawless Government Chosen

The majority of voters rejected the American Principle of limited, constitutional government whose purpose is the protection of our sovereign individual right to life, liberty, property, the ownership of our own bodies, minds, and labor, and the pursuit of personal happiness. Socialism and anti-human extreme environmentalism coupled with crony mercantilism and constant, blatant lying were chosen by the majority of voters within the boundaries of America.

I cannot say how unbelievably disappointed I am in half of the people of this country.  I cannot even think of them as Americans due to their failure to value the American Principle.  I cannot understand how so many could so radically embrace organized thievery, thinly veiled as redistribution in the interest of materialistic equality.

The voters have chosen four more years of such violations of economic rights that economic stagnation is assured.  We are assured four more years of very high unemployment and decreased full-time employment thanks to ObamaCare and a weak economy.  We are assured of the further destruction of whole industries, such as the coal, oil, and natural gas industries.  We can count on continued high gasoline prices.  We are assured of a government controlled medical system characterized by fleeing doctors, deteriorating medical service and expertise, aging medical equipment, lengthening waits for critical medical care, and of course much increased costs.  Government-run schools will become still greater propaganda factories deceiving the minds of our children and college students with tall tales of how government control will solve most any problem.  They will serve blue collar union teachers and not the children who will be deprived of real knowledge about American history and civics.  The cost of this hollow education will continue to skyrocket.  America's producers will be vilified for another four years and then taxed heavily, not to fill the gap between government spending and tax revenue, but to penalize the productive for being so productive.

Most voters say they want smaller government, but most voted for Obama.  This is a total disconnect.

Most voters say they want less national debt, but they chose the debt champion of all Presidents.

The voters also chose to return a Democrat Senate so they could continue the Obama-Reid regime record of no budget for a total of 8 years, in violation of law.

They chose Obama and a Democrat Senate so they would continue to have the unpopular ObamaCare, really ObamaUncaringTax, shoved down their throats by rationing bureaucrats and IRS thugs. 

Most voters cared not a wink about the cover-up of the New Black Panthers, Fast and Furious, and Benghazi.  Most care nothing that Obama flushed tens of billions of dollars down the toilet of hollow green energy companies with no possible market run by his campaign bundlers to fill their pockets in a race to the company bankruptcy.  Most voters did not mind the constant misrepresentations of the truth, the constant lies, and the fallacious arguments.  They embraced their celebrity con man.

This con man and the Democrat Senate will not address the fact that the U.S. government spending on ObamaCare, Medicaid, Medicare, Social Security, Food Stamps, and the interest on the debt are unsustainable.  We are hurtling down the road hacked out by Greece.  Collapse of the government is coming.  The only hope to avoid that was to free the economy and allow growth in it that exceeded that of the government.  Most voters never understood this simple fact.  Thanks to Obama and the Democrat Socialist Party and their most unworthy, unthinking supporters, collapsed government is our future.

The Election Choice: Is Another Human Being a Burden?

If, as the Progressive Elitists say, we are all our brother's, neighbors, and unknown countryman's keeper and that keeping is to be performed by government using mandatory taxation and forced labor, then every newborn baby is an added burden to everyone.  In this view, the needs and the wishes of each new person become the command that forces each of us to act to satisfy those needs and wishes.  With no regulating principle to limit which needs and wishes will be satisfied, these needs and wishes will make very heavy demands on limited resources.  This perhaps heightens the tendency of Progressive Elitists to see each new human as a threat to the Earth, to nature, and to the environment.

Indeed, instead of the effort required by a man to produce what he needs and wants in voluntary cooperation with others in the free market being the limit on the use of resources, the Progressive Elitist is required to find other means to place limits on both the requirements for action on the part of others and upon the use of resources.  There are two major such limits:

1)  Political power and the jockeying of factions for control of government, whose monopoly on the use of force to compel action by others to satisfy the needs and wants of controlling factions is fought for with warlike intent and ferocity.  This vicious fight for power to control always limited resources is rarely acknowledged by more gentle supporters.

2)  Claims, commonly exaggerated, that the resources of the Earth are limited justifies limits on demands on the government to compel too much effort from others to satisfy greedy demands.  Protection of the Earth, nature, and the environment are to become regulators of greed which the Progressive Elitists refuse to allow free associations for purposes of cooperation in the pursuit of values in the private sector to pursue.  This is also used to argue against the efficiency of the private sector and Capitalism in providing for individual needs and wants with the claim that the private sector uses too many of the Earth's resources and violates nature.  Nature is seen as excluding mankind.  These limits seem more amenable to gentler souls than do those of the raw exercise of government power for special interests or factions, yet these limits become added tools for warlike factions in control of government.

Whatever the limits on efforts to satisfy the needs and wants of each of our countrymen by these two Progressive Elitist principles, each person is an added burden.  Each newborn child has a long future of educational expenses from Kindergarten through the 12th grade and then perhaps in college.  Any sickness or genetic defect is a burden on everyone else.  If the adult does not prove ready to be productive enough to produce a large stream of tax revenues for the governments, then the adult is a burden on all.  Inevitably, no matter what, each person is a strain on the Earth and Mother Nature.  Each person presents complex needs and wants, with critical differences in the timing of these needs and wants, which lawmakers and bureaucrats cannot understand and provide for.  The individuality of each person must be suppressed and modeled out of existence for such a state to function.  The problems that result make each individual a sore spot to be resented by the lawmakers, bureaucrats, and voting Progressive Elitists.

In a rich and vibrant private sector with a highly limited government only protecting individual rights, individuals choose their own values based on their own assessments of their needs and wants.  They then arrange their voluntary associations with others to make trades of time, effort, money, and favors to pursue their values.  These trades are made only as each participant sees some kind of advantage in cooperation for himself.  All such relationships contribute to the value we see in one another.  Aside from a few murderers and street thieves, everyone has at least some positive value to us as an actual trader, a potential trader, or just someone in the incredibly complex hierarchies of trades and interactions that infuse our society who is almost certainly productive at some level.  In such a society, we come to see everyone as a value to us.  Those few worthy people down on their luck for a time or really, really unfortunate in the chance of genetic problems or disease, we want to help care for voluntarily because they are still a part of our society of valued individuals.

Not so in the society of the Progressive Elitist.  The characteristic ObamaCare program is already rationing medical care in Medicaid and Medicare by refusing operations and expensive drugs to those over 70, who are seen as an excessive burden to society.  After all, not only do such people burden society with their medical costs, but they also take Social Security money.  They produce little in the way of a tax revenue stream now.  Similarly, newborn babies with severe problems are to receive less care in the frank acknowledgment that they will burden society with many years of education expenses before they will be generators of a tax revenue stream.  Progressive Elitism robs us of our joy in the lives of others.  It rubs the fact of our being forced to serve them in our faces.  It forces us to become sullen slaves to their needs and wants.  It forces us to become angry combatants for our own needs and wants.  Among our own needs and wants is the avoidance of having to provide for the needs or wants of others if only because the hours of our own days and lives are limited.  The Progressive Elitist society is suffused with stress and resentment.  Everyone else becomes a burden upon us.

In the election on 6 November, we will be faced with many choices to either choose to enthusiastically embrace the Progressive Elitist viewpoint of society as Obama and Biden do, or to make a choice that recognizes at least a substantial part of the value of a limited government and private sector society more consistent with the American Principle put forth in our Declaration of Independence and our Constitution as Romney and Ryan do.  We all need to decide whether we want to live in a society that makes nearly everyone else a value to us or one which makes nearly everyone else a burden to us.  We need to decide whether we want to cooperate with others or whether we want to fight others for government power or for the limited resources of the Earth.  This is the nature of the conflict between government limited to protecting our rights and socialist government which is supposed to provide for everyone's needs and wants.  This is the nature of the rich and vibrant private sector choice and the big government choice.  We must choose to recognize the fact of a complex and highly differentiated individuality or to refuse to see it.  We have to decide whether we are pro-human or anti-human.

Misdirection on Medicare by Obama Ad

Obama is running an ad now that claims that Romney is going to cut $6000 from seniors Medicare benefits and shows various seniors in the ad.  First of all, Romney is not proposing any cut for anyone 55 years or older.  Second, in the future for those less than 55 years old, should legislation be passed to make Medicare sustainable, it is by no means clear that seniors will lose $6,000 of benefits many years from now.  That number has little credibility.  It is simply pulled from a hat.  But it works to scare people. 

It works to create a division between the young and the elderly. The AARP is quoted by Obama's ad, but this group specializes in inter-generational warfare.  It is at war with the children of the elderly.  The young cannot possibly be taxed heavily enough to continue to pay the costs of Medicare given the demographics of the huge Baby Boomer generation and the too small generations following them, unless changes are made.  The best way to control medical costs is to give individuals a stake in how much those services cost.  Vouchers are the means to do this critical task.  You need them to decide that pointless visits to the doctor are expendable.  You need them to put pressure on medical service providers not to overcharge them.  When government says it will control costs, we know that to be nonsense.

The Democrats refuse to deal with the reality that Medicare is not sustainable, much as they refuse to deal with Social Security's problems or to recognize that several terrorist attacks were just that.  The Republicans are manning up and are willing to make the changes needed to make these programs sustainable.  The pretense-given Democrats are standing by as both Medicare and Social Security are spending more money than they are taking in.  We have switched from a situation in which excess Medicare and Social Security tax revenues were used to fund irresponsible general government spending to one in which general income tax income has to be used to make up the shortfall in Medicare and Social Security expenditures.

Misleading Obama Claims About Romney's Effective Tax

Obama keeps claiming that most people pay more taxes than Romney does.  Actually, Romney's 14.1% effective tax rate is higher than that of 97% of Americans.  It is probably very similar to Obama's own effective tax rate, so Obama is being quite the hypocrite.  But Obama will make any claim if he thinks he can take advantage of people not thinking things through.

When pressed, Obama will claim that he is right because he will say the average person pays Social Security and Medicare taxes at such a high rate that their effective tax rate is higher than Romney's is.  This is perhaps true, since most of Romney's income exceeds the upper limit on income taxed by these payroll taxes.  But, these taxes are supposed to be rather like insurance premiums, or at least that is what Democrats have always told us.  It is not clear that they should be compared to income taxes.

If you insist on counting the Social Security and Medicare taxes, not reported on any 1040 tax forms, one might just as well include real estate taxes also.  I am sure that very few of Obama's average tax payers pay anywhere near as much real estate tax as Romney does.  In any case, Obama's claims that it is unfair that Romney does not pay a higher effective tax rate also ignores the fact that most of Romney's income is due to dividends and capital gains.  Consequently, this form of income is what is left after a corporation pays corporate income taxes.

You really have to hunt for a very peculiar viewpoint to make the claim that Romney does not pay his fair share of taxes. 

The Backfiring Democrat Santa Analogy

Former Ohio Governor Ted Strickland when speaking at the Democrat National Convention (DNC) in Charlotte said that if Romney were Santa he would "fire the reindeer and outsource the elves."  Since Romney is a candidate for the presidency, it appears that Strickland thinks the President has a job analogous to that of Santa.  This does seem to be very compatible with the Welfare State mentality of the Democrats.

According to the Democrats and their DNC promotional video, we all belong to the Government.  The head of the Government is the President, who is supposed to be Santa.  This is clearly Government for Children, not for adults who believe their General Welfare is only served when the Government protects their equal, sovereign individual rights.  Santa, or the President, is supposed to have many, many reindeer employees, which is code for many government workers who are supposed to be no brighter than reindeer and only work a small portion of the year.  Ideally, one night each year.  Government is not supposed to be efficient.

The elves are the private sector producers who are heavily taxed and assigned brutal mandated hours of unpaid work for the government, or Santa, to produce the gifts to be given to the Children on Christmas Day.  The gift receivers are deceptively called children to earn our unqualified love, but they are really disguised special interests such as the labor unions, government employee reindeer, green energy companies, trial lawyers, tax lawyers and accountants, and radical anti-human environmentalists, and the like.  Santa Obama redistributes the wealth created by the elves to these special interests so fast that he has just sent the national debt soaring past $16 trillion dollars.  When interest rates on the national debt return to long-term averages, the interest on the debt will exceed the cost of Medicare!  No matter how much a future Santa may want to take from the elves in taxes, he will not be able to take enough to pay the interest, Medicare, Medicaid, and Social Security costs even if he spends nothing on any other Government program.

The elves are not actually outsourced.  It is their jobs that are outsourced.  Because Santa, really the President and the Democrats, has expanded Government gift-giving, or spending, from 18% of the economy to 25% of the economy, the elves who are in the private sector have been deprived of the means to grow the economy at a rate to match that of the 39% growth of Government spending.  As a result, many are unable to compete with foreign elves whose productive organizations pay lower taxes and may have fewer and less expensive regulatory mandates.  Other private sector elves are not able to consume as much as they used to, so fewer elves are needed in jobs. Elves have become unemployed in droves.  There are fewer elves with jobs now than when the present Santa became Santa.

What is worse, the population of elves and reindeer has been growing and there are about 3 million more elves and reindeer a year.  This means that the sum of elves and reindeer need about 2 million new jobs each year so that those who want to have jobs will have them.  Over a three year period they need 6 million jobs just to keep up with the population growth of elves and reindeer.  Of course, many of the out-of-work elves of three years ago also want to have jobs again.

Meanwhile, Santa is boasting that he has created 4.5 million new jobs since the depths of a recession reached three years ago.  He counts all the reindeer jobs and all the elf jobs as jobs he has created.  Some of the elves say that they created their businesses, but the Santa President says that they did not.  He did, because he creates all jobs, even the jobs of self-employed elves.  Many of the 4.5 million jobs, actually all of them in net, are due to increased self-employment by elves.

The Santa President is a very arrogant man.  He has a horde of black shirt special interest comrades who want his rules strictly enforced, which are too complicated for the reindeer and the elves to understand.  His rules also change very quickly.  He only likes those who vote for him and give him big presents in tribute for his ruling over them.  This Santa gives reindeer favors and agrees to favor or not to hurt certain elves if they give him tribute.

Most of the elves are given a lump of coal at Christmas time and no other gifts.  Because the President Santa is not allowing coal to be used for energy, coal is an even worse Christmas present than it used to be.  President Santa also hogs huge areas of land and all offshore areas and will not allow elves to get oil and gas in his private reserves.  The cost of gasoline has more than doubled under this Santa, so the elves are having trouble driving to work, if they have any work.  Santa forces the elves to turn their food corn into ethanol and mix it with gasoline, despite knowing that this makes food more expensive, creates no energy, and increases pollution.  The elves are finding energy to be more and more expensive and more and more unreliable, so their productivity in the private sector is suffering and the 5% growth they used to have has been replaced with 1% growth.

The elves' homes are colder in the winter and warmer in the summer.  Their homes are also worth about 40% less than they used to be.  Many elves owe more on their mortgages for their homes than their homes are worth.  Many of the elves were supposed to retire soon, but can no longer afford to retire.  Elves have less income now than they did when the Santa became Santa.  More and more elves are angry at Santa.  Santa has violated Christmas and the entrepreneurial spirit of plenty that the industrious elves of our land once created.

Santa Obama is about to be replaced by President Romney, who the elves hope will be less a Santa and more of a protector of individual rights so that the elves will be able to choose their own values more in the private sector and can work to create very big pies and other goodies.  They do not want to have to give so many of their pies and goodies to the Santa President so they can improve their own lives.  Santa Obama was a rabble-rouser and a special interest lawyer before he became Santa.  The future President Romney was a elf who made many pies and goodies himself and claims to like busy elves.  It is highly unlikely he will be as bad a Scrooge as the present pretend Santa has proven to be.

Government Gone Wild on the National Debt and Liabilities

Daniel J. Mitchell of the Cato Institute just drew my attention to this excellent video created by Government Gone Wild.  Earlier videos from Government Gone Wild that I have seen have been excellent also, which is an assessment with which Daniel Mitchell agrees.

The Deception of the Reduced Employee Share of Payroll Tax

I am sure there are many employees who are delighted that the government has decided to make the total 2.0% reduction in the rate of the Social Security tax in the employee's contribution and not in the employer's contribution.  In fact, this is a nearly meaningless distinction, except that it plays well with those who have not thought the problem through.  I can tell you from my experience with mostly quite intelligent employees that very few people have thought this issue through.

In view of this ignorance, the ploy makes great political sense.  First, there are many more employees than there are employers, so it wins more votes for the politicians.  Second, the disappointed Progressive Elitists who so badly wanted to raise taxes on those guilty of being productive enough to earn more than $200,000 or somewhat less or couples earning more than $250,000 together or somewhat less are likely to feel that the reduction of the Social Security tax only on employees making less than $106,800 helps to equalize their disappointment in not getting to soak the rich.  They are also getting even with those rich, exploitative employers by not letting them have a share of the tax break for 2011 offered by this Social Security tax reduction.  Progressive Elitists hate business, profits, and businessmen, so this plays well.  But then this little triumph is entirely based on their own ignorance of employee compensation, which they display in many ways in addition to the present case.

Why is the distinction of employee and employer shares of the Social Security and the Medicare taxes meaningless?  On one level, it is because they are both paid by the employer.  The employee does not take his paycheck home and then send his Social Security withholding of 6.2% and his Medicare withholding of 1.45% in to the IRS.  His employer does that, unless he is self-employed, in which case he sends 12.4% in Social Security tax and 2.9% in Medicare tax.  But while this fact is important, it is not the hard part to understand.  Let us get to that.

An employer hires an employee because he wants the employee to help him produce goods and services and hiring the employee is calculated to produce enough more goods and services that the employer can cover all the costs of hiring the additional employee and make some profit as well.  The employer and the employee make a deal that the employee will be so productive that the employer can rationally afford to keep him employed.  There are two sides to this issue that need to be considered.  What will the employee add in company income and what he costs the employer.  For our purposes here, we will mostly consider what the employee costs the employer.

Adding an employee will generally require more work space and more equipment.  Workman's Compensation Insurance payments will go up.  The company may need to do more advertising to bring in more customers for the employee to provide goods or services for.  There will be an incremental increase in liability insurance in many cases.  There will be generally added expenses for business cards, office supplies, pollution controls and other regulation compliance, and the materials and goods the employee must use to make the company's finished goods or provide services.  There will also be overhead expenses due to the added work in doing payroll and keeping records for the IRS and reporting to them and other government agencies on tax and labor issues, and to provide and keep track of benefits.

Finally, there is the matter of providing the compensation package to the employee.  His compensation cannot rationally be greater than his additions to the company's income minus the many expenses of the previous paragraph.  If they are, for more than a brief training period, he should be fired.  Now every company is also in a bidding war with every other employer and even with the employee's potential thoughts of being self-employed, so that he has little leeway on the downside as to what he can offer in a compensation package.  He may increase that leeway somewhat by providing a nice work environment, good people to work with, good customers to work with, extra freedom in hours worked, and interesting work to do.  But one way or another, he is still in a stiff competition to keep desirable employees, who are likely to be desirable to other employers as well.  But most important of all, the employee's total compensation has a strict upper bound determined by what he adds to the company income minus the expenses associated with his doing so.

The compensation package is usually considered to be his wages or salary plus the costs of his benefits such as health insurance, retirement plans, vacation, sick leave, etc.  One could say that the employer's share of the Social Security tax and the Medicare tax, that state and federal unemployment taxes, and Workman's Compensation costs are all overhead expenses.  But if you do, the employer still needs to consider them as part of the costs of adding an employee and the employee still has to cover those costs or lose his job.  But, unlike added equipment, office or warehouse space, advertising, and other common overhead expenses, these taxes, which Workman's Compensation also is for all intents and purposes, are very easy to attribute to each particular employee and most rational employer's will do just exactly that.  They are part of your compensation package then.  Sure, most employees do not think of them as such, but that is the real case.

Why is this?  It is because the employer would have been just as happy to have given these tax monies to you as to give them to various governments or insurance companies.  If you are employed, you are worth the sum of these taxes, your take-home pay, the other taxes fictionally paid by you though he pays them for you, and all of your benefits.  In fact, if the employer could hand all of this money to you he should be happier.  He probably likes you and he would surely be very happy not to have go to all the trouble of separating the amount you are worth into separate piles with all the associated record keeping, report filings, and payments needed to

• Withhold income taxes for the state.
• Pay unemployment insurance to the state.
• Withhold income taxes for the federal government.
• Withhold Social Security taxes for the federal government.
• Withhold Medicare taxes for the federal government.
• Pay unemployment insurance to the federal government.
• Pay Workmen's Compensation insurance.

I can certainly vouch for the fact that I would love to give all this money to my employees and if any of these taxes had to be paid, I would be delighted if they would relieve me of all the tedious work involved and do it themselves.  Of course, I have a devious motive.  I know that that would create so many very angry voters that we would soon have a much simpler tax system and much smaller governments.  Many more people would pay more attention to how much they were paying in taxes.  The present system is designed to fool them into underestimating the amount of taxes they pay.  That deception works with most people.

Now, let us consider the case of a tax increase.  It does not matter a bit whether the tax increase is designated as paid by the employer or the employee.  The employer is still the one who is actually going to make the payments, though the employee is involved in some minor adjustments on the income tax.  Let us suppose that either the Social Security or the Medicare tax goes up.  If it does, the employer will have to do one of a few things:

• If he has many employees, he can easily fire one or more of the least productive employees to compensate for the cost increase.
• He may crack the whip and say all employees must work harder.
• He may defer pay increases until increases in worker productivity match the increased tax cost.
• He probably will be loathe to take on new workers who will not be able to match their cost of employment for an initial period of time as they learn the job.
• He may cut back on benefits.
• He might have to decrease wages or salaries, though this is usually psychologically a tough choice for everyone.

The employer has options and he will have to exercise them.  Losing money is not a choice he can handle for long.  But, you should note that such compensatory actions are harder on small businessmen than on big companies.  If your costs go up 2% and that wipes out your profit, but you have four employees, firing one causes you to lose 25% of your income.  That is most often not an option.  So you have to use the remaining options or go out of business altogether.  The going out of business option is very frequently exercised by small businesses, especially since they are usually already working very hard and productivity increases are often harder for them to come by.

Now let us return to the 2% decrease in the employee share of the Social Security tax.  Each employee gets to now take that 2% home and spend it as he wishes.  But, what would have happened if the 2% decrease had been in the employer's share of the Social Security tax?  Well, perhaps for a few weeks the employer might have had a few extra dollars to reinvest in his company or to call net income and to be taxed, but there would be a very rapid readjustment in the marketplace in which employers found that they must offer employees 2% more to retain them or to get them to come to work for them.  Why?  Because the worker in question has already proven that his labor is worth that extra 2%.  That is why he had a job in the first place.

Good, productive employees are a scare resource.  There is always an active bidding process for their services, just as there is a market for plumbers, accountants, gold, wheat, pork, televisions, and other goods and services.  The inescapable Law of Supply and Demand applies here as it generally does in life.  Governments often pretend that they are above the Law of Supply and Demand, but all they do is shift the equation is some way, usually some bad way, but some new Supply and Demand equilibrium ensues.

In the case of the 2% reduction from 6.2% to 4.2% in the employee share of Social Security, there will be more money available in the short run for people to spend.  Generally, I favor reductions in taxes.  However, this reduction is going to make the financial straits of the Social Security system all the worse.  The Baby Boomers are about to start retiring in large numbers.  The politicians have been unwilling to face that program's severe underfunding.  The Ponzi scheme is about to collapse upon us all.  The best solution is simple, but few will yet accept it.  The problem is the size of the Baby Boomer wave and the fact that retirees are living a long time.  The life expectancy of the 65 year old in 2006 was 18.5 years.  That is a long time in retirement, particularly given that many people aged 70 are now in good enough health to be working.  The retirement age should be at least age 70.  I expect to work at least until I am 75 and longer if my health allows, which it probably will.

Given that the federal government has long been using Social Security tax revenues to generally pay for the obscenely excessive spending of the government, either major retirement age increases or major tax increases will be required.  Taxes are already much too high and they are already very much degrading the health of the private sector.  What we generally need are massive government spending decreases.  They are coming because the People will not put up with higher taxes and they are coming to understand the fatal nature of government deficit spending.  The process by which the necessary spending decreases will occur is going to be very interesting to observe.  Because a simple problem has so very long been ignored, its solution will now be all the tougher and may be catastrophic for some.

Many Doctors Do Not Want to Be Obama's Slaves

Grace-Marie Turner wrote a good summary of doctor's reaction to the onslaught of ObamaCare for The Orange County Register.  Here is a summary of her summary:

• 28% of seniors had trouble finding a primary care doctor in 2008 compared to 24% in 2007.
• Only 38% of primary care doctors in Texas will take a new Medicare patient.
• The Mayo Clinic has stopped taking Medicare patients at several locations.
• The postponed 21% cut in doctor payments, will now have to be 30% in January.
• The American Osteopathic Association says only 40% of doctors will be able to continue seeing Medicare patients after the cut occurs because they will lose money on each patient.
• ObamaCare requires a big investment in information technology.
• ObamaCare requires more paperwork and cookbook medicine, eliminating individual tailoring.
• A simple error can result in a $10,000 fine.
• 70 million Baby Boomers are about to go on Medicare.
• The American Association of Medical Colleges projects a 150,000 shortfall of doctors by 2025.
• Longer waits for treatment and more emergency room visits will result.
• There is no increase in the number of residencies to train more physicians.
• 13% of internists will not treat Medicare patients at all.
• A financial planner with many doctor clients says half of them want to retire in 2013, just before the worst of ObamaCare takes effect in 2014.

This is just as one would expect.  Why would highly educated and dedicated professionals submit to the Obama slavery?  Would you really want one of the physicians who would accept slavery to perform an operation on you?  I would much rather have a proud professional, so when the time comes, I will just have to scrape up the money to pay one of the doctors who will not take Medicare patients.  There just isn't a free lunch when it comes to quality medical care. 

Well, maybe there sometimes was when the doctor had the freedom to donate his services for people really in need, but now that everyone simply plans to take advantage of him with the ObamaCare thugs pointing a gun at him, it is not likely he will be feeling charitable.  All you proud and capable doctors have little choice but to refuse Medicare moocher patients.  Better to refuse them than to spit on them.

Of course, if we are not a nation of voting fools, we will so throw the rascals out of Congress and the White House that we can repeal the ObamaCare nightmare with all its intended slaves and moochers.

Krauthammer - Obama's next act

Charles Krauthammer, in his column piece called Obama's Next Act, claims that almost everyone is underestimating Obama.  He says Obama has accomplished a huge part of his ideological goals.  He has

• "Irrevocably changed one-sixth of the economy" with ObamaCare and put the country inexorably on the road to national health care in a manner to bring about one of the most massive redistributions of wealth in U.S. history.
• The financial "reform", creating 243 new regulations, will provide government control of banks, "storefront check cashiers, city governments, small manufacturers, home buyers and credit bureaus," among many other economic activities.
• The Stimulus Bill was the largest spending bill ever and helped to lock in a requirement for further tax increases.
• The nationalization of student loans [gives the federal government control of who goes to college and which college they will go to --- in time.]
• The Medicare and Medicaid entitlements dominate future government budgets.  ObamaCare freezes out future reductions in programs, so there is no possibility for deficit reduction except to increase taxes massively, probably with "a European-style value-added tax.

Krauthammer says "the next burst of ideological energy -- massive regulation of the energy economy, federalizing higher education and 'comprehensive' immigration reform (i.e., amnesty) -- will require a second mandate, meaning reelection in 2012."  Krauthammer seems almost to expect Obama's reelection.

I am not as pessimistic as Krauthammer is, but he is right that Obama has accomplished a plunge deep into socialism.  The extraction process will be fraught with difficulties and dangers.  We are on the verge of losing the very concept of America as the Land of the Free, the Home of the Brave and replacing that transitionally with America, the Land of the Moocher, the Home of the Irresponsible, before it becomes permanently, America, the Land of the Slave, the Impoverished without homes.  To prevent this, we must overturn each and every socialist accomplishment of Obama listed above.  There is no other route to the salvation of the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.  We must come to control the House, the Senate with a super-majority, and the presidency by the 2012 election.  The consequence of not doing so is death.  Or slavery, if you think there is a difference.

A Step to Force Medicare Advantage Insurers into Bankruptcy

The 11 million seniors on Medicare Advantage plans administered by private health insurance companies are about to be given new premium and co-pay rates.  Despite medical care costs going up 6% this year, the Obama administration sent letters to Well-Point Inc., Cigna Corp., BlueCross BlueShield Association, and Health Care Service Corp. that they must not increase their premiums and co-pays this year, according to an article in the Wall Street Journal on 7 June 2010.  This is part of the Obama effort to minimize citizen anger at the ObamaCare bill.  These insurers and others had planned to cut back on services offered and to increase payments required.  The bill itself requires government payments to be cut by $136 billion by the end of the decade, but those cuts do not begin until 2012.  The present cost freeze implied by the Kathleen Sibelius letter was not in the bill.

It is appropriate for the government to determine how much of the costs of Medicare Advantage it will pay.  At least it would be if the government had any business being in this business at all.  It is not right for the government to mandate what the costs of such plans offered by private insurers will be or can be, however.  The insurance industry estimates the insurance payment cuts on Medicare Advantage over ten years will be about $200 billion.  They do not see any way to offer these plans without cutting the services offered or raising the payments charged to the Medicare Advantage customers.

The Obama thugs are also planning to announce $250 million in grants to the states to fund their toughening insurance premium regulations.  The grip of state and federal government on our health care insurance industry is tightening.  The plan is to make it impossible for private insurers to make money in the health insurance market, just as the plan is to bankrupt all coal-fired electric power plants.  When insurers have stopped offering health insurance or have gone bankrupt, the socialists will institute the tyrannical plan they have always wanted: a single-payer plan, that is, a government payer plan, that is a taxpayer massive redistribution of income plan.

Ragnar, Sink that Relief Ship Going to Greece!

With our national debt of nearly $13 trillion, huge shortfalls looming for Medicare, Medicaid, and Social Security, certain losses on GM, Chrysler, and many lending institutions, further losses for Ginny Mae and Freddy Mac, large losses for AMTRAK and the Postal Service, bailouts for many underfunded union retirement funds, and looming bailouts for U.S. states such as California, New York, and Rhode Island, the U.S. has recently guaranteed $56 billion of loans to Socialist Greece through our involvement with the IMF.

The loan guarantees to Greece are expected to be insufficient to save the Greek government from insolvency.  The Greek economy is only about 2% of the GDP of the European Union, but its insolvency has been a major threat to the weak economies throughout the EU.  About one-third of all workers in Greece work for the government.  They have retirement for hazardous occupations at age 58 and for women at age 50.  The hazardous occupations include musicians, news announcers, and hairdressers.  Greece worked its way into this insolvency by flouting the EU's rules on deficit spending and misrepresenting their indebtedness.  This was long recognized, but the EU did not enforce its rules, which have been widely violated in other nations in the EU also.  Portugal appears also to be on the verge of collapse.  Spain, with its wildly profligate spending on alternative energy, among many other popular socialist programs, is not far behind.  Italy and Ireland are also in sad shape and even the United Kingdom is in worse shape than the U.S.  We are likely to be expected to bailout all these countries whose socialist policies have brought them to the brink of failure through our contributions to the IMF.

The U.S. itself is near the brink of failure, if not quite as close as Greece, Portugal, Spain, Italy, Ireland, and the United Kingdom.  This is because the Progressives have so long worked so hard and so successfully to transform the U.S. into their European ideal of a socialist state.  We are now driving ourselves even faster into irrecoverable insolvency by sending relief ship after relief ship to Europe.  Where are you Ragnar?  You are needed.

Real life is working very hard at replicating Ayn Rand's great novel Atlas Shrugged.

Obama Chooses NHS Admirer to Head Medicare

Obama has chosen Dr. Donald Berwick to be the new head of the Center for Medicare/Medicaid Services.  Berwick gave the talk shown in the video below in 2008 in the United Kingdom and bowed in praise to the altruists' shrine of the British National Health Service (NHS).  He loves the political system of rationing health care and redistributing the costs from those not poor and not unhealthy to the poor and the unhealthy.  He claimed that health care decisions made in the free market are made in the dark, while those made in the bowels of a gigantic government are made democratically in the public light.  That huge government makes democratic decisions in the light of day is certainly laughable in the light of understanding how ObamaCare came to be.  The backroom deals with big companies to gain their support or at least to prevent their opposition, the backroom deals to enlist the aid and enthusiasm of labor unions, the backroom deals to get the votes of certain reluctant Senators, the willful trampling of the well-expressed opposition of the People, and the order to pass the bill so we would find out what was in it, all make a lie of the Berwick idea that the political process is democratic and performed in open daylight.

On the other hand, health care decisions made in a free market are made where they matter in the light of day.  First, the government does meddle extensively with the free market in medicine, with many limitations on health insurance due to state mandates and many government limitations on competition between hospitals and among doctors, such as severe limits on their numbers.  The government has also stacked the cards in favor of having employers choose the health care insurance options for their employees, thereby reducing the employee's choice in the matter.  Still, the employee does evaluate his own compensation package in choosing employers and the employer will sometimes offer multiple choices.  The market, if it were free, would offer more choices.  But, even after all this, the decision that really counts is one made by the individual, who can decide which compensation plan best meets his individual needs.  In the Berwick and Obama system, bureaucrats will make many more of these decisions than they now make.  Dr. Berwick thinks this is great.  Listen to him:

Government Appreciation for a Great Family Physician

This is not a post about abstract effects of government controls on our medical profession.  This is a small note on my offense that the best family doctor I have ever met has recently been given a raw deal by the federal government.

This family doctor has been practicing family medicine for a good 30 years.  He loves being a doctor and relieving his patients of pain.  His fees are very reasonable and he takes a strong personal interest in his patients.  He takes the time to talk over how they feel and he is careful to check up on the medicines given to many of his patients by specialists, who often do not check for conflicts with other medicines the patient may be taking.  His patients respect and care for him in return.  He and my father and mother became friends over the many years they were and are his patients.  This doctor saved my father's life many times and helped guide him and my mother through the last four years of my father's life when my Dad was on dialysis due to his kidneys failing after another doctor damaged them with radiation in prostate cancer treatment.  The average 80 plus year old patient lives about 1.5 years on dialysis, but with this doctor's help, my Mom's help, and my Dad's indomitable soul, Dad lived on dialysis from 85 to 89 years of age.  My Dad died at home Christmas morning in 2007.  His doctor visited him at home on Christmas Eve to say goodbye.

In his entire career, this great man and family doctor was sued only once.  Despite that, his malpractice insurance went up by 25% from last year to this year.  He treats many Medicare patients.  Very recently, he sent in a Medicare reimbursement request for my Mom and he soon after received a letter telling him that he was being fined $3,000 by Medicare because he had allowed his Medicare registration to expire.  It turns out that a doctor taking Medicare patients not only has to put up with low payments and much paperwork, but he also has to pay $2500 every five years to register with Medicare.  Medicare had never notified him that his Medicare registration was expiring and he forgot, as a very busy man with much more important things on his mind might do, after 5 years.

Not only was he fined $3,000, but he has to reapply for his registration with Medicare and pay for that.  That may take months.  Meanwhile, none of his Medicare patients will be reimbursed by Medicare for their medical costs.  So the good doctor sent a letter to all of his patients telling them about the problem and telling them he would give them all a 25% discount until his Medicare registration is complete.  His waiting room is still overflowing with patients.  They all love him and are hardly willing to go to a run-of-the-mill doctor in order to be reimbursed.  But, the loss of income due to his discount and in the face of the 25% increase in malpractice insurance is making it hard for him to continue his practice.  Nonetheless, he told my Mom he would continue as long as she was alive, so she would never have to worry that he would not be her doctor.

Being a doctor who treats Medicare and Medicaid patients is very much as though you or I had to deal with the IRS on a daily basis.  Can you imagine the daily trauma?  Their payments for medical care are too low and they are miserable to deal with.  They turn a profession dedicated to healing pain and extending life into a drudge.  And now, ObamaCare will extend this misery for doctors.  No one seems to fully understand the role of the IRS in ObamaCare, but I sure hope that it is not such that our heroic and good doctors have to deal more often with them as well as Medicare, Medicaid, and the well over 100 other federal agencies and panels which are to play roles in ObamaCare.  Can anyone imagine the horror of having to deal with that many uncaring, mean-hearted, money-grasping, you-wait-forever, they-want-it-yesterday government agencies?

The day after my Mom dies, I hope this good and heroic man retires and says he has had enough.  No one like him should serve a day of slavery to the likes of these government bureaucrats.  Doctors have the same sovereign individual rights to life, liberty, and the pursuit of happiness that the rest of us have.  Remember, these inalienable rights are equally sovereign to us all.  There is no exclusion of doctors.

Howard Rich -- ObamaCare: "The Bigger the Lie"

Howard Rich is the Chairman of Americans for Limited Government.  His recent article called ObamaCare: "The Bigger the Lie" demonstrates that he really understands the purpose of ObamaCare.  He says:

President Barack Obama and his Congressional allies are spending money that they know we don’t have on a program that they know isn’t going to work – all in an effort to expand government’s control over the private sector and its reach into the private lives of American citizens.

Sound a bit conspiratorial?

It’s not – at least not when you turn down the partisan rhetoric (on both sides of the debate) and start examining what this monstrosity actually does.

“ObamaCare is really about who commands the country’s medical resources,” an editorial in The Wall Street Journal noted the day before the legislation was passed. “It vastly accelerates the march toward a totally state-driven system, in contrast to reforms that would fix today’s distorted status quo by putting consumers in control.”

With government already purchasing nearly half of all health care services in America (a system that’s rampant with fraud and anti-competitive price-fixing), just who did you think was responsible for the “distorted status quo” that Obamacare ostensibly seeks to correct?
Here’s a hint – it’s not those “evil” insurance companies, which will be receiving nearly a half-trillion dollars in “Obamacare” subsidies.

Consistent with the core fallacy of other recent socialist misadventures (like former President George Bush’s TARP bailout or Obama’s so-called “stimulus”), Washington politicians are once again attempting to solve problems that have been exacerbated by excessive government interventionism with additional government interventionism. “Dumping buckets of water on the head of a drowning victim,” if you will.

Even though America can’t even begin to afford its current entitlement obligations, Washington’s answer is to create yet another new entitlement program – something that Republicans who voted in favor of Bush’s prescription drug benefit know all about. And even as Medicare and Medicaid have failed spectacularly (and expensively) to provide cost-effective health care, Obama and his allies are using this failure as an excuse to dramatically escalate their “government knows best” approach to include individual mandates and huge fines for families and small businesses who fail to comply.

It’s a power grab, pure and simple. And a money grab, which is why “Obamacare” spends $10 billion to hire 17,000 new tax collectors at the IRS to rake in billions of dollars from America’s newly-created class of “illegally uninsured” citizens.

The central theme of the Obama administration is that it wants massively more power over the individual, who he wants begging for crumbs at his feet.  He will pick winners and losers.  The winners will be made very aware that they are soon likely to be among the losers.  Obama will extort money and services until no money is left and the People have learned that slaves can produce but very little.

John Goodman on ObamaCare Effects

John Goodman's Health Policy Blog has compiled an impressive list of numbers indicating many of the effects of ObamaCare.  Goodman works with the National Center for Policy Analysis and is the father of the health savings accounts (HSA).  These HSAs are a wonderful invention and should be encouraged so individuals would have some stake in the cost of their medical care.  ObamaCare aims instead to reduce or eliminate their role and to make us as careless and wasteful consumers of health care services as possible.

Goodman points out that there have been 8 versions of ObamaCare and there has not yet been enough time to refine the numbers for the present version, but he thinks these numbers are fairly close:

“If you like the plan you are in you can keep it.”

19 million	Number of people predicted to lose their employer plan (Lewin Group)
8 to 9 million	Number of people predicted to lose their employer plan (CBO)
$11,543	Employer incentive to drop coverage for a $30,000 a year worker with family [Tax subsidy in the exchange minus tax subsidy at work minus $2,000 fine] (IRET)
8.5 million	Number of seniors and disabled people at risk of losing their Medicare Advantage plan (Medicare Chief Actuary)
3 million	Additional people who will likely lose Medicare Advantage plan benefits (Medicare Chief Actuary)
$816	Average annual benefit loss for 11 million seniors and disabled in Medicare Advantage plans (CBO)
33 million	Number of people in traditional Medicare at risk of losing access to care because of $523 billion in cuts in Medicare spending (Medicare Chief Actuary)
20%	Fraction of hospitals that would become unprofitable after Medicare spending cuts (Medicare Chief Actuary)

“There will be no tax increases for anyone who earns less than $200,000.”

73 million Number of people who earn less than $200,000 who will see their tax bill rise (Joint Committee on Taxation)     40% Tax rate on “Cadillac” plans (Reconciliation Summary)     2.3% Hidden tax on wheelchairs and other medical supplies (CBO update)     $27 billion Hidden “medicine cabinet” tax on drugs (Reconciliation Summary)     10% Tax on tanning salons (Reconciliation Summary)     $60 billion Hidden health insurance tax (Reconciliation Summary)

“Health insurance reform is…about creating a climate where our entrepreneurs and small businesses can succeed [and] about giving you the chance to prosper and grow.”

$100 million Cost of ObamaCare mandates for Caterpillar, Inc. in the first year alone (Caterpillar, Inc.)     60% Implicit marginal tax rate for workers earning as little as $25,000 (IRET)     65% Implicit marginal tax rate for families earning as little as $50,000 (IRET)     0.9% New payroll tax on the wages of entrepreneurs and small business owners (Reconciliation Summary)     3.8% New tax on the capital income of entrepreneurs and small business owners (Reconciliation Summary)           “The average family will save $2,500 in health care costs by the time I complete my first term as President of the United States.”

111% Premium increase for individual insurance (AHIP)     54% Premium increase for individual insurance (BlueCross BlueShield)     106% Premium increase for individual insurance (Wellpoint)     $2,100 Premium increase for the average family (CBO)

Did you see any numbers there that you liked?  I sure did not.  It is hard to believe that 42% of Americans oppose the repeal of this turkey, according to the latest Rasmussen poll.  The good news is that 54% favor its repeal, though why that number is not higher is somewhat mysterious.  Apparently, few Americans are familiar with the numbers above and few have thought about their consequences.  But even that leaves much of the conundrum for me, since I would think they would rise up as the Minutemen did in 1775 and fight for the principle of their unalienable, sovereign individual rights to life, liberty, and the pursuit of happiness.  Don't they
realize that this is a fight for their very lives and for the ownership of their own bodies?

The National Center for Policy Analysis seems to be doing some good work.  I have just given them a donation.

ObamaCare Long-Term Care Withholdings

One of the little-discussed provisions of ObamaCare is that beginning in 2012 money will be automatically withheld from your paycheck for long-term care.  The amount has not been decided, but numbers from $146 per month to $240 per month are being discussed.  It will be possible to opt out of this plan, but we do not yet know how difficult or easy that may prove to be.

I am a bit puzzled at the numbers being discussed here.  Then again maybe I am not.  My wife and I started paying for long-term care insurance just a few years ago and the amount we pay was a function of how late in life we began paying for it.  The average worker is surely much younger than we were when we started paying for this insurance, so one would think they would pay less than we are paying.  But, what we are paying is about equal to the $146 per month figure.  So why would the government withholding be so high?

I suspect the answer lies in the supply and demand expected.  First, many Baby Boomers will eventually need long-term care and when that wave hits the limited supply of long-term care providers, costs will go way up.  Second, this program of automatic withholdings will likely also increase future demand greatly for long-term care.  So, the government must plan for major future cost increases for long-term care.  But, nobody can reasonably pretend to predict now what that care will cost given the new uncertainties introduced by ObamaCare.  I expect our insurance will become quite the bargain given how much ObamaCare will increase the costs.  Of course, that may bankrupt our private insurance company and be a disaster for us.

Will the people who are put on the ObamaCare long-term insurance plan be doing so in the same way that people are put on Medicare and Social Security?  That is, is this a plan in which they have no right to expect benefits and those benefits may be taken away at the whim of Congress?  Is this another Ponzi scheme?  Or will the government actually invest their money for their future use?  Given that this is a Democrat plan, I expect they will use the money for current expenditures on the general budget and write IOUs to be redeemed later when the government has no expectation of being able to honor them or can attempt to do so only in the midst of huge deficits due to Medicare, Medicaid, and Social Security.  Good luck with that "investment" scheme.

Postscript Summarizing the Comments below of Scott A. Olson, a professional long-term care insurance seller with 15 years experience and licensed to sell long-term care insurance in 37 states:

The CLASS Act long-term care insurance will allow people with any health history to have long-term care insurance.  It will cost people below the poverty level income only $5 per month.  The plan is operated with a "trust fund" similar to that of the Social Security program.

Medicare and Social Security Liabilities Prior to ObamaCare

Let us review the status of the Medicare and Social Security liability situation in 2009 according to the Social Security and Medicare Trustee Reports.  Their combined unfunded liabilities are $107 trillion!  To this, we are now going to add the liabilities of ObamaCare.  It is also important to note that the Congressional Budget Office was not allowed to calculate the cost of ObamaCare borne directly by the public, which it had done for ClintonCare.  For ClintonCare, 60% of the added cost was to be borne by the private sector, while only 40% was borne by the government, which of course taxes the private sector for that amount.  This is at least likely to be roughly true for ObamaCare.  So, the real price of ObamaCare will really be about 2.5 times the price admitted by the CBO numbers.  In the end, all of these costs will be borne by the private sector, even as the private sector staggers under the crushing load of previous commitments to Medicare and Social Security.

Pamela Villarreal, a senior policy analyst of the National Center for Policy Analysis, prepared an excellent and brief summary of the Medicare and Social Security future burdens in 2009.  Medicare and Medicaid spending has grown at an average rate of 2.5% faster than GDP since 1970.  So, they are taking more and more of our productive output year after year after year.  This retards GDP growth considerably.  Now, ObamaCare has just added greatly to the cost of Medicaid by putting at least 15,000,000 more people on that program.  But, we will ignore that sudden spurt in growth and just assume these programs will "plod" along with a growth rate in excess of GDP by 2.5%.  The consequences:

• Social Security, Medicare, and Medicaid would have consumed almost half of the federal budget by 2050, just as today's recent college graduates are nearing retirement.  Remember that much of the cost of Medicaid is passed on to the states, which are already staggering on the brink of bankruptcy in many cases under its burden.
• By 2082, Medicare alone will devour almost the entire federal budget.  Of course this is of no concern to most people now, since they will be dead by then.  But, today's children will be living in those dire times, unless the medical system is so deteriorated by then that life expectancy has shortened to that of the old Soviet Union or of Russia.

Let us consider the popular fiction that tax rates can be increased and people do not change their behavior.  Politicians who support tax increases like to make such projections to calculate the increase in tax revenues.  Of course, tax increases actually usually mean lower tax revenues over time, given the high rates we already start at now.  So, what tax rates are now needed to maintain all of the programs of 2009 in the federal budget at their current levels of spending under a balanced budget under the fiction that everyone will work as hard as now?

• The lowest marginal income tax rate of 10% goes to 26%.
• The 25% rate goes to 66%.
• The highest rate of 35% in 2009, which Obama now wants raised, goes to 92%.
• The corporate tax rate of 35% goes to 92%.

It would seem there soon will not be any wealthy people to shift the tax burden to for long. Imagine the entire middle class paying 66% of income to taxes!  There surely will not be a middle class for long either at these tax rates.  This was our future before ObamaCare made matters worse!

Let us look at an article from the Washington Post last year by Amy Goldstein on the financial problems of these programs.  She notes that the financial status of both Medicare and Social Security deteriorated at an accelerated rate in 2009.  This would largely be due to the recession and the shrinking payroll tax take that resulted as people lost jobs, went to shorter hours, and took pay cuts.  Of the two, Medicare is in the worse shape.  By 2017, Medicare will not be able to pay all of its hospital bills, which is two years earlier than was projected in the 2008 Trustee Report.  Social Security will be unable to pay retirees full benefits by 2037, which is 4 years earlier than was projected in the 2008 report.  That, I caution you, assumes the government honors the IOUs it has given the Social Security program for previous taxes it used for the general budget.  The situation has further deteriorated since the 2009 report was issued on 12 May 2009.  The part of the Social Security program for disabled Americans will run out of funds in 2020.  That report, however, predicted that the Social Security tax fund will begin to spend more money in 2016 than it takes in through the Social Security payroll tax each year.  As I recently noted, the recession has caused this milestone to be reached this year!

At that time, before the problems continued to become worse as this government-caused recession has dragged on and on, the Social Security problem, provided you consider the IOUs to be good and without problems, could be solved by increasing the payroll tax from 12.4% to 14.4% or by reducing benefits by 13%.  I believe increasing the tax rate will only lead to a compounded reduction of growth in the economy and is a bad idea.  The proper thing to do is to raise the retirement age enough to greatly reduce the costs.  People have been living longer and they are certainly more healthy at age 65 or age 70 than they used to be.  They can work longer.  Since they would then be working longer, they can continue to pay for their own health care costs longer also.  This is clearly the right and moral way to solve the financial crises of these programs.  Of course, I would also encourage programs to allow people to save and invest more, such as a huge reduction in government spending for many purposes, so people will have more take-home pay to save and invest.

Increasing taxes is not the answer.  We must become more hard-nosed and cut the many unconstitutional government programs so people can do a much better job of managing their own lives.  Going on as we are is not a realistic option.  It is the option chosen by the Obama administration, however.  Well, not really, since the Obama administration thought it would be better to make the situation much worse yet and has given us ObamaCare as one of many ways to make it worse.  The young Americans who still like Obama and his socialist programs need to consider very carefully whether they really want the future implied here of incredibly burdensome taxes.  It is time for you young people to focus on trying to live rewarding personal lives in the real world.  But, if you want to continue with your fervor for socialist programs, you need to do a few things:

• Work incredibly hard for the collectivist good and earn a lot of money to be taxed at very high rates.  Never stop working.  It is your duty to the collective good.
• Get used to spending little money, because you will have little left after taxes.  Save all of that money for your old age.  No luxuries, no big homes, no fancy cars, clothes from the thrift shop, and squeeze every penny ten times before spending it.  No, don't spend it.  You cannot afford to.
• Have lots and lots of children to support you in your old age after Medicare and Social Security have gone broke or to keep them hobbling along.  Remember, they are Ponzi schemes and they require lots of young workers to support the older geezers, which you will one day be.  You hope.  If ObamaCare and Medicare do not kill you before what we now think of as our time.  Remember those death panels, they are a-coming, unless retirement and Medicare ages are greatly increased.  As I keep reminding you, Supply and Demand will not be denied.  It is the Grim Reaper of Life.
• Teach your children that they are slaves to your future need as an old geezer.  You must indoctrinate them really, really thoroughly to work like demons and to want nothing from life, but to support you in your old age.

Darn, I missed John Stossel's program again on Fox Business News.  He was going to talk about how the needs of the old require the young to give them their all.  I missed his 8:00 PM show and the re-run at 11:00 PM.  I hope you did not miss his show.

I later realized that an important clarification was needed on the solution of the Social Security funding shortfall with a mere 2% increase in the payroll tax and added the above color-coded caveat on 27 March.