Deconstructing Lyin’ Ryan (Again)

Liar Liar

Ok, now we have the document. 

I want to focus your attention in one place, and only one place — because it’s the only place that matters.

In the next decade, Social Security will grow at an annual average of 5.8 percent. Medicare will grow at 6.2 percent. And Medicaid—thanks in part to its expansion under the health-care law—will grow at an  astounding 9.9 percent. All of these programs are growing substantially faster than the economy…..

Good luck on those astoundingly optimistic figures.

Social Security has expanded at a rate of about 6% annually over the last 30 years.  That’s fairly close.  But Medicare and Medicaid are not; the expansion from 1980 to today has been at a average compounded rate of approximately 9%and full-charge hospital bills are currently expanding at 10% a year and have been for the last several years.

Note carefully that the latter is not the government’s cost, it’s the cost in the broad economy!

Leave the net interest aside as that’s a consequence of the two pieces directly under it.

Note that Social Security, after rising for a few years, begins to plateau and in fact starts to fall after about 2030.  That’s because the Boomers begin to pass on.

The medical explosion is not due to the boomers.  It is due to the underlying systemic expansion of cost that in turn is driven by monopoly practices and cost-shifting, mostly to people in the United States.

A particularly outrageous but by no means isolated example is the scorpion antivenom that I wrote about — made in Mexico for $100/dose and north of $35,000 a dose when administered in a US hospital.  That’s a mark-up of more than 350 times cost!

But it gets worse.  Ryan claims that there’s a “raid” on the Medicare “trust fund.”  He’s lying.

Last year Medicare took in $201 billion in tax revenues.  But between Medicare and Medicaid the Federal government spent just north of one trillion dollars, or five times what it took in.  There is no “trust fund” to raid when you are spending five times the amount you collected in taxes.  Any such assertion is a bald lie.

Worse, the attempted shift of Medicaid to the states will bankrupt all of them within five years.  That’s the arithmetic — there is no state in the union that can shoulder that expense.

The only solution is to collapse the medical cost structure.  It’s politically damnable but it has to be done, and done now.  Any budget proposal that doesn’t have this as its centerpiece is un-serious and unworthy of consideration as it is an open, notorious and public fraud.

A beginning point for this could come in the form of a single two-paragraph law that requires that all health providers publish a price list and charge everyone the same price, irrespective of how they pay.  This would make direct comparison of cost possible, and while a minority of care is paid in cash the fact remains that the cash customers would prefer competent care at a lower price over one that is five or ten times as expensive, as is often the case now.  This would immediately collapse the high-cost outlier providers, forcing them to either cut that crap out or remove them from the market.

The second step is to remove both EMTALA and all anti-trust protection from the entire medical industry.  And the third is to require insurance companies to actually sell insurance — once the insured-against event happens you no longer have to pay anything — the company pays you, unlike the present system where you can be co-billed for ridiculous amounts of money and must maintain premium payments or worse, are subject to cancellation even though you paid in for the unexpected and unlikely adverse event!

Ryan’s budget also assumes GDP growth of more than 5% annually over the next ten years with no recessions, a feat that has never been achieved in the post-WWII era according to our government’s own data.  The use of the word “cut” in a budget that grows spending by 3.5% compounded annually is an outrageous lie as well.

But while railing against this is appropriate and necessary, none of it will matter if we don’t deal with the medical problem now.

Within approximately two years Medicare, Medicaid, Social Security and interest payments will consume all tax receipts.  At some point before that happens the markets are nearly-certain to deduce that we are not serious about attending to the budgetary imbalance as we’re then borrowing to pay the light bill in the Capitol, say much less anything important like Defense.  

When, not if, that recognition occurs there is literally nothing that The Fed or the Government will be able to do about the ensuing flight from assets in this country, as the only remaining step available to the government to fund this escalation of spending will be outright confiscation of some form.

As I have no indication at present that anyone on The Hill will even discuss the fundamental arithmetic that lays behind this irrefutable truth, say much less reduce it to legislative language and introduce it as a bill despite severalyears of attempting to do so, I am forced to recommend that you prepare for the worst.

I hereby withdraw my formerly-expressed guarded optimism.

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