Unfunded medicare: 30T. False premise that its a problem?

Discussion in 'Economics' started by scriabinop23, Feb 2, 2009.

  1. We all read it everywhere. Soc sec, medicare, etc... Unfunded 30-40T. Total real liabilities are many trillions over assets. We are all bankrupt.

    Let me pose an alternative thought, a very simple one. If you hold the money supply fixed (or relatively fixed), medicare spending or any liability can never grow sustainably to these epic levels simply because there is not enough money out there to purchase them in these quantities.

    Finally, a little extra thought. Think of medicare spending like our China import addiction. Imagine we are exporting medicare spending to never see it come back. Again, a false premise. Even if medicare spending makes up 50% of GDP going forward, all of the workers in the health care space will actually have money to spend and circulate.

    Even borrowing to pay for it poses an interesting dilemma. Granted you don't print new money, the only ones willing to lend in perpetuum will be the new health care economy's workers. Even then, with a relatively stable amount of money in the economy, it seems to me that there will be inevitable price pressure downwards on health care services. There is a fixed amount of savings to invest in bonds at any arbitrary interest rate, and that will pose a practical limiter to medicare spending in government deficit.

    I guess this means if we ever get a health care bubble with 40-50 PEs across all of the space, that is your opportunity to short.

    I see enormous price pressures coming forward on health care providers (10 years out).
  2. spinn


    There should be a law stating that the minimum health insurance deductible would be $5000.

    Then people would truly realize how corrupt doctors are.
  3. TGregg


    The whole mess is FUBAR. We've taken the worst of socialism to create a system that can do nothing but get bigger. First, we don't charge the buyers (patients) directly for the service provided, so they have no incentive to economize. Then we don't even charge them indirectly - we bill their employers. Add in a court system and an oversupply of trial lawyers and we've built a system where it's easier to settle a case for a few grand than go to court. All this will send the cost of healthcare soaring.

    But we can do more. :)

    Let's add lots of government oversight. And more lawsuits, so doctors have to run every test imaginable to cover their @$$. That'll really send it up.

    But wait, we can do even more! :)

    Then we made it a right for the old and the poor.

    Yay! But wait, we can do even more!

    Let's make it a right for everybody! Yay! Something for nothing! Free healthcare. Let unemployment smoke up to 10 points. This'll pass, you know it will. Government health care. Public hospitals of the same caliber and aroma as public restrooms. Oh sure, the working class (people who do not depend on government handouts - AKA "The Rich") will be able to opt out. At first. But when people see how miserable this is, they'll want that misery spread evenly and that opt out will end. There'll be medical tourism for the truly wealthy. Fly to some tropical paradise for a luxury heart transplant, or liposuction. But for the cattle, it's a line to Hell.
  4. spinn


    Not exactly true.What is happening in medicine is no accident......

    DRs are paid to keep people sick and nobody cares much because insurance pays for it.

    Let people pay $200 to refill their prescription to lipitor for a while and see if things dont change.

    DRs are true sociopaths.