Medicare Financing to Run Out in 2024 Without Fix (Broke)

[Soul Crusher]

Medicare Financing to Run Out in 2024 Without Fix
By Drew Armstrong - May 13, 2011 12:08 PM ET

http://www.bloomberg.com/news/2011-05-13/medicare-financing-to-run-out-in-2024-without-fix.html



Medicare, the U.S. health insurance program for the elderly and disabled, won’t have sufficient money to pay full benefits starting in 2024, five years earlier than last year’s estimate.

Social Security, the federal program that provides income to retirees, will run out of funds for paying full benefits in 2036, one year sooner than projected last year, the U.S. government said today in an annual report on the program.

Both projections have been affected by a slower-than- anticipated economic recovery, according to the report. The estimates for funding add urgency to negotiations between Democrats and Republicans on ways to cut spending to reduce the U.S. budget deficit.

“Projected long-run program costs for both Medicare and Social Security are sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided,” according to the report summary.

The 2010 health-care overhaul backed by Democrats extended the life of Medicare, though more must be done to shore up the program’s long-term funding, Treasury Secretary Timothy Geithner said in a statement distributed with the report.

“If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare,” he said in the statement. “If we do not do more to contain health-care costs, our commitments will become unsustainable.”

Republicans demanding that the U.S. cut its budget deficit have proposed privatizing Medicare by giving individuals a subsidy to buy coverage from private insurers.

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

[Soul Crusher]

Obama and the far left communists   "spend more - everything is fine"   

[kcballer]

Time to raise consumption taxes!

333 did you realize - Assume a broad Federal Sales Tax of 7 percent applied to the value of all consumption expenditures, which in the United States is about 70 percent of GDP.  Also, assume an estimated average price of gasoline per gallon for the U.S. obtained from the Energy Information Administration of $3.84 per gallon and an estimated consumption of 138 billion gallons per year and that these values stay constant.   Assume also that expenditures stay as forecast by the Congressional Budget Office and that GDP grows as they have forecast.  The results are plotted in Figure 2 and show the gap between revenues and expenditures shrinking with a surplus by 2014 of 134 billion dollars and then surpluses all the way until 2021.  As a share of GDP, these new tax revenues would raise the American tax to GDP ratio by about 5 percentage points which would bring it to about the OECD average.

[Soul Crusher]

Time to raise consumption taxes!

333 did you realize - Assume a broad Federal Sales Tax of 7 percent applied to the value of all consumption expenditures, which in the United States is about 70 percent of GDP.  Also, assume an estimated average price of gasoline per gallon for the U.S. obtained from the Energy Information Administration of $3.84 per gallon and an estimated consumption of 138 billion gallons per year and that these values stay constant.   Assume also that expenditures stay as forecast by the Congressional Budget Office and that GDP grows as they have forecast.  The results are plotted in Figure 2 and show the gap between revenues and expenditures shrinking with a surplus by 2014 of 134 billion dollars and then surpluses all the way until 2021.  As a share of GDP, these new tax revenues would raise the American tax to GDP ratio by about 5 percentage points which would bring it to about the OECD average.

Fuck that.   We are already taxed too much.   

[kcballer]

Fuck that.   We are already taxed too much.   

Ah yes the great aversion to paying taxes. 

[kcballer]

Also think of the boom in tax revenue from amnesty.  That right there will cover the shortfall.  Close a few loop holes here and there, increase the consumption taxes and BAM.  Fiscally solvent and able to afford medicare without deficits.

[kcballer]

Besides aren't you always trumpeting economics as sound fiscal policy?   

[Kazan]

Time to raise consumption taxes!

333 did you realize - Assume a broad Federal Sales Tax of 7 percent applied to the value of all consumption expenditures, which in the United States is about 70 percent of GDP.  Also, assume an estimated average price of gasoline per gallon for the U.S. obtained from the Energy Information Administration of $3.84 per gallon and an estimated consumption of 138 billion gallons per year and that these values stay constant.   Assume also that expenditures stay as forecast by the Congressional Budget Office and that GDP grows as they have forecast.  The results are plotted in Figure 2 and show the gap between revenues and expenditures shrinking with a surplus by 2014 of 134 billion dollars and then surpluses all the way until 2021.  As a share of GDP, these new tax revenues would raise the American tax to GDP ratio by about 5 percentage points which would bring it to about the OECD average.

Why?  Everything we buy, sell, hell even when we get paid is taxed. So lets just slap another tax on top of everything else so the federal government can continue to be irresponsible?

[Soul Crusher]

Social Security deficits now ‘permanent’
By Stephen Dinan
The Washington Times
12:55 p.m., Friday, May 13, 2011


Social Security will run a permanent yearly deficit when looking at the program's tax revenues compared to what it must pay out in benefits, the program's trustees said Friday in a report that found both the outlook for Social Security and Medicare, the two major federal social safety-net programs, have worsened over the last year.

Medicare's hospital insurance trust fund is now slated to run out of money in 2024, or five years earlier than last year's projection, while Social Security's trust fund will be exhausted by 2036, a year earlier than the prior projection.

The trustees stressed that exhaustion of the trust funds doesn't mean the programs will stop paying all benefits. Social Security could fund about three-fourths of benefits past 2036, and Medicare could pay 90 percent of benefits past 2024 under current trends.

The figures come as Congress and President Obama are wrestling over whether to make major changes to the entitlement spending, and Republicans said the new projections should force the debate to turn in their direction.

"Today's report makes it clearer than ever that doing nothing is not an option. The failure to act means current as well as future beneficiaries, will face significant cuts even sooner than previously estimated," said three top House Republicans on the Ways and Means Committee, which oversees both programs.

Treasury Secretary Timothy Geithner, the managing trustee of the boards of trustees for the two programs, said the report shows the need to act "sooner rather than later," but said Mr. Obama has actually put forward an outline calling for changes to stabilize the finances for the major entitlements programs.

And Health and Human Services Secretary Kathleen Sebelius argued that Medicare would have been in worse shape without the new health care law Democrats passed last year, which reduced billions of dollars of Medicare payments.

Social Security began running an annual deficit in 2010 when looking at tax income and benefit payments. The gap right now is made up by payments from the trust fund, which in theory has built up over the years when the program ran an annual surplus.

Charles Blahous, one of the trustees, said the gap between tax revenues and benefit payments is now "a permanent feature of the program's finances going forward."

Still, Michael Astrue, the Social Security Administration's commissioner, said the gap was not a major issue compared with the broad size and scope of Social Security.

"It is a rounding error in terms of its significance, in my opinion," he said.

© Copyright 2011 The Washington Times, LLC. Click here for reprint permission.

[Soul Crusher]

Medicare, Social Security Funds Expiring Sooner, U.S. Says
May 13, 2011, 4:18 PM EDT
More From Businessweek
By Drew Armstrong and Brian Faler



May 13 (Bloomberg) -- Medicare, the U.S. health insurance program for the elderly and disabled, and the Social Security trust for the disabled and retirees are running out of money sooner than the government had projected.

While Medicare won’t have sufficient funds to pay full benefits starting in 2024, five years earlier than last year’s estimate, Social Security’s cash to pay full benefits runs short in 2036, a year sooner than the 2010 projection, the U.S. government said today in an annual report.

Both forecasts were affected by a slower-than-anticipated economic recovery, the government said. The estimates for funding add urgency to talks between Democrats and Republicans on ways to cut spending to reduce the U.S. budget deficit.

“Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided,” according to the report summary.

T he 2010 health-care overhaul backed by Democrats extended the life of Medicare, though a greater effort is needed to shore up the program’s long-term funding, Treasury Secretary Timothy Geithner said in a statement distributed with the report.

“If we do not do more to contain health-care costs, our commitments will become unsustainable,” said Geithner, a trustee of both Medicaid and Social Security, in the statement.

Debt-Limit Deal

When Medicare and Social Security funds run short, they will pay less in benefits rather than stop paying entirely. Social Security would have to cut payments by 23 percent, while Medicare would reduce by 10 percent what it pays hospitals and other inpatient care providers.

Congress is debating potentially sweeping changes in the federal budget as part of a deal to raise the government’s $14.3 trillion debt limit, which the Treasury Department said will be needed by Aug. 2.

Two groups of lawmakers have held private meetings to negotiate a deficit-reduction plan while President Barack Obama met yesterday with Senate Republicans, a day after meeting with their Democratic counterparts.

Republicans demanding that the U.S. cut its budget deficit have proposed privatizing Medicare by giving individuals a subsidy to buy coverage from private insurers. Lawmakers such as House Budget Committee Chairman Paul Ryan, Republican of Wisconsin, said today’s forecasts were justification for action.

“Leadership is required from both sides to ensure that Medicare and Social Security are saved for current seniors and strengthened to meet the need of future generations,” he said.

Time To Respond

Democrats, who have resisted changes to Social Security, said the trustees’ analysis shows there’s time to respond.

“The current situation does not necessitate rushed or severe action,” said Senate Finance Committee Chairman Max Baucus, Democrat of Montana. “We must continue to protect the Social Security benefits our seniors count on.”

The Social Security trust fund that finances aid to about 10 million disabled Americans and their dependents will be the first to dry up, with funding scheduled to run out in 2018, according to the trustees.

The fund, when combined with a separate and much larger trust fund paying benefits to seniors, has enough money to stay solvent until 2036.

Spending Law

Social Security law requires program spending to match revenue, so a lack of action by lawmakers by that time will mean benefits will have to be cut 23 percent -- or the Social Security payroll tax increased to 16 percent, or a combination, the report said. Congress has never allowed the program’s two trust funds to be depleted.

Medicare, to stay solvent for the next 75 years, would have to immediately raise payroll taxes by 24 percent, or cut current benefit payments by 17 percent, Cori Uccello, a senior health fellow with the American Academy of Actuaries in Washington, said in a phone interview.

The longer the U.S. waits to address the coming shortages in Medicare and Social Security, the more painful it may be, said Uccello. A U.S. delay in extending Medicare’s fiscal life may force cuts for current beneficiaries rather than diminishing them for people who enter the program several years from now.

--Editors: Steve Walsh, Adriel Bettelheim

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net.


http://www.businessweek.com/news/2011-05-13/medicare-social-security-funds-expiring-sooner-u-s-says.html

[kcballer]

Assume a broad Federal Sales Tax of 7 percent applied to the value of all consumption expenditures, which in the United States is about 70 percent of GDP.  Also, assume an estimated average price of gasoline per gallon for the U.S. obtained from the Energy Information Administration of $3.84 per gallon and an estimated consumption of 138 billion gallons per year and that these values stay constant.   Assume also that expenditures stay as forecast by the Congressional Budget Office and that GDP grows as they have forecast.  The results are plotted in Figure 2 and show the gap between revenues and expenditures shrinking with a surplus by 2014 of 134 billion dollars and then surpluses all the way until 2021.  As a share of GDP, these new tax revenues would raise the American tax to GDP ratio by about 5 percentage points which would bring it to about the OECD average.

It'll be funded and then some.   

[Soul Crusher]

How about we cut spending instead of continuing to make fantasy land promises that can never be met?

[240 is Back]

How about we cut spending instead of continuing to make fantasy land promises that can never be met?

neither party will do that.

the only things ppl in office will cut?

dems: tax breaks for rich, oil and corporations
repubs: NPR, PP, oor medicare.

There is so much fcking pork and NEITHER party will touch it because it'll alienate some chunk of the voter base who gets a paycheck from the pork.

[kcballer]

How about we cut spending instead of continuing to make fantasy land promises that can never be met?

I just showed you they can be met.  Current obligations can be met and then some.  The surplus can be used as an endowment type fund for medicare. 

Then you throw in a large new tax base - amnesty.  Bam!  You make it even sweeter.   

[headhuntersix]

Yeah...new tax base of illiterate bean pickers and fench painters. Not to mention people who have already proven they'll readily break the laws of MY FUCKING COUNTRY to make a buck. Latino's are no different then Indians or Polish people. There is a process to get into America. They need to follow it. The Dems want a new and bigger minority to lie to and create a voter base. The average Elite Lib wants no part of some greasy border jumper. The only good part about this who mess is that latino's tend to work hard and at some point will realize that the Dems aren't doing a thing for them...this will take generations and we'll be a smoking junk heap by them.

[Soul Crusher]

Niall Ferguson's 4 Reasons Why US Dominance Is Over
CNBC.com ^ | Thursday, 12 May 2011 | 1:46 PM ET | By: Jeff Cox

________________________ ______________-


LAS VEGAS—The era of US economic dominance is rapidly coming to an end as an “American Gothic” age sets in and China becomes the new global leader, economic historian Niall Ferguson said.

Four primary factors—some caused by the financial crisis and others stemming from separate geopolitical issues—spell the final stages of the American age, Ferguson told attendees at the Skybridge Alternative Investment (SALT) conference here.

“The big story of your lifetime is that this period of Western predominance came to an end on your watch,” he said. “That happened because the developing part of the world is achieving the Industrial Revolution that the Americans experienced. This period is going to continue until China becomes the biggest economy in the world.”

For Ferguson, a professor of economics and history at Harvard, projections of economic gloom for America are hardly new.

He’s been critical of US debt and the profligate spending that has brought the nation to a budget deficit approaching $1.5 trillion.

He’s not the only one to predict that China is about to overtake the US on the global stage. But in a room full of hedge fund pros, the warnings weigh heavy for an industry just recovering from the financial crisis and the public black eye it sustained during the economic meltdown.

In his SALT presentation, Ferguson used slides to demonstrate a number of economic trends, not least among them the superiority of Chinese students particularly in math, and the nation’s tireless work ethic.

But it is a mix of what he called “Four Reasons to Feel American Gothic,” a message he punctuated with a slide of the famous Grant Wood painting, that pose the gravest threat to US hegemony.

The factors he cited:

The “mother of all Keynsian fiscal binges” in which the government spent nearly $1 trillion on stimulus from which there will be a “hangover” with only the timing at question. “Fiscal gaps this large are really hard to close by means of austerity,” he said. “If you don’t believe me, ask the Greeks, the Irish and the Portugese.”

A “massive monetary binge” in which the Federal Reserve ultimately will print money to the tune of nearly $3 trillion.

An ensuing spike in commodity prices, a process that has gone on virtually unabated since the beginning of Fed intervention and for which there has been a recent pullback. “It’s not just that people in the West get cheesed off and stop believing when the Fed says inflation is low,” he said. “It’s because high prices create geopolitical instability.”

China “is not the Soviet Union,” meaning the nation doesn’t have the same destabilizing economic conditions that brought down the former Communist republic.

In all, the obstacles posed against the US maintaining its global dominance will be too much to overcome, he said.

“The fiscal crisis of the United States is not going away. It is coming here soon,” Ferguson concluded. “The key decisions not just for the next four years but for the next 20 years will take place in Asia, not in the US. Welcome to the future.”