Talking Point: Debt and Medicare

Are Medicare & Medicade the Problem?

First, Medicare is not part of the general budget deficit & associated debt problem. That's because Medicare, like Social Security, has a dedicated fund separate from the general fund. It should be managed as a separate dedicated fund, not lumped into the general budget debate.

Second, if we spent per capita what every other industrial nation spends on health care, we would not have a long-term Medicare solvency problem. If we simply focus on cutting Medicare and Medicaid, we’re just shifting the rising costs to those least able to pay them: the elderly, the disabled and the poor, or people on their death bed. Is that the American way?

Solutions: First, we need to cut health care costs (not services). Second, in the next few decades, we all need to pay a little more out of our FICA payroll deductions to cover the fact that the baby boomers are reaching old age (maybe from 1.45% to 1.75% or something). After the wave of baby boomers passes, the deductions could decrease. Finally, if Congress insists on mixing the dedicated fund of Medicare with the general fund, then we should insist on cutting corporate welfare and increasing revenue from corporate profits to help meet Medicare's needs.

Wanna take Action? Start by calling Senator Kerry's office and tell him to get better control of his message (He is one of the super committee members). Here's a recent statement of his:

... the real problem for our country is not the short-term debt. We can deal with that. It’s the long-term debt. It’s the structural debt of Social Security, Medicare and Medicaid, measured against the demographics of our nation.

Unfortunately, his statements are playing into the hysteria that is enveloping the mentality that these safety nets should be cut. We need to re-frame the debate.

For Your Convenience:

• Contact the US Senate

Sources:

DemocracyNow! August, 12, 2011.

Wall Street Crash

"The Wall Street crash doesn't mean there will be any general or serious business depression."
-- Business Week
November 14, 1929

Sources: "The working person's history of the great depression," Show me the Money, Issue 10, Autumn 2001.

Once Upon a Time

"The outlook is for the end of the decline in business during the early part of the 1931, and steady... revival for the remainder of the year."

-- The Harvard Economic Society's Weekly Letter,
November, 15, 1930

Note: In 1931, the economic squeeze of the depression forced the Harvard Economic Society to suspend publication of the Weekly Letter.

Source: "The working person's history of the great depression," Show me the Money, Issue 10, Autumn 2001.

Second Helicopter in Two Weeks

I don't remember hearing about another helicopter shot down less than two weeks ago in Kunar province. A search of Google news and Google suggests it was mentioned by obscure outlets. This post, with "Kunar" and "Helicopter" in the labels list will rank high on Google 'cuz there ain't no competition.

I guess that's par for our debilitated, commercial mainstream media; a US helicopter gets shot down and it isn't news if no Americans die.

I'm reminded of Orwell and the perpetual war.

GDAE Podcast Episode 49

• Economist James Galbraith: Reality check on the Washington "Debt Crisis".

• Journalist, media critic and political analyst John Nichols: The Unraveling Murdoch News Corp media empire. Were crimes also committed in the United States?


• Ralph Nader: Common Ground with the Tea Party? This might be true for the principled libertarians within the Tea Party.

Play Episode 49 (32 min):

Sometimes it's Worth Saying the Obvious

It took a while, but now it is generally accepted that the United States of America is a world Empire. There are references to "US Empire" on mainstream magazine covers, numerous books lay out the history in detail and now we even hear references to the US Empire in decline.

What isn't as widely acknowledged, but should be generally accepted is that the United States, and the World for that matter, is in the midst of a class war. Sadly, some of the inertia in the class war resides in common people who perpetuate the notions that 1) government is inherently bad and 2) that if we are going to have taxes at all, then the taxes on the wealthy class should be very low so they can invest and create jobs.

A government of the common people can be a very beneficial thing. Ask someone with Veterans medical care, someone who benefited from the GI Bill who wouldn't have been able to go to college without it, someone with a monthly social security check or someone with medicare. I could go on with the highway system, which some smart people would deride that saying the car corporations pushed the US government to fund the highways and that we should have invested in mass transit instead, but you get the idea; if we the people have a shared vision, we can efficiently and effectively use our government to pool the resources to do it. That great American "can-do" thing. So, future visions of a Utopian anarchism aside, a government of the people, as opposed to "of the corporations", is a good thing.

"But if the government spends the money it will displace it from being spent in private sector and distort the free market." Frankly, the private sector does a fine job of distorting the free market with speculations that have no connection to the real economy and do not provide jobs. The tax cuts for the rich don't just go to buying McMansions and Hummers, that money chases the next speculative bubble and distorts commodity prices in ways that make it impossible for dairy farmers to buy the grains they need. The private sector isn't investing to avoid and manage the next environmental disaster or rehabilitate our crumbling sewers, bridges and other infrastructure. Lots of money chasing the next bubble, but not investing in world class broadband digital infrastructure. Why? Investments in tangible things that affect the real economy are difficult, and many "rich people" want to get richer quicker "in the market", not get their hands dirty with long term investments difficult and risky things like developing new innovations. The magic of the "invisible hand" of wealthy people is more a myth than a reality.

So, it is becoming passe' to say that the Wall Street class caused the problem, were bailed out by middle-class tax payers, are continuing to get tax cuts and the cost is falling on middle class tax payers. We see it in "austerity" plans and "debt control" plans that are taking the form of cuts to programs that help the lower and middle class people, cuts that forestalled investment in infrastructure maintenance, environmental restoration and much more. And we're told that we cannot raise taxes on the wealthy 1% of the people who now hoard 40% of the nation's wealth.

There is a phrase that describes the struggle surrounding this situation and it's "class war."

Wealth Gap and Revolution

Lately I've been dwelling on the social strains caused by the wealth gap in the US. Everyone should know the difference between "income gap" and "wealth gap;" income being the annual revenues and wealth being the accumulated revenues or savings. The wealth gap is actually more pronounced than the income gap, but both have been growing for several decades. A recent statistic on wealth gap:

The top 1% of Americans own 40% of the wealth.

The word hoarding comes to mind as does a famous quote:

There is, inherent in the capitalist system, a tendency to self-destruct. - Schumpeter, 1942.

We see it happening before our very eyes playing out in the Washington budget debate. The notion, that giving the wealthy class, or owner class, tax cuts to spur growth is a widely held belief in our society. But this simplistic rule only makes sense when money is tight and production capacity at factories is tight and in need of investment to expand, neither of which hold today; we don't need any more production capacity and even if the owner class were to produce more, the commoners don't have the money to buy the stuff.

What we face is a market that is saturated with production capacity, but no money among we the little people, because the money is being hoarded and used for non-productive speculation. Buying commodities, like grains, industrial metals, oil & gas, have become disconnected from the real economy and turned into a gambling playground for the wealthy (not just Americans).

The tendency is for this kind of hoarding to create social instability (dare I say "revolution"?).
People are catching on to this, and the big questions are 1) will we get to the point where enough people become so destitute that they don't have anything, and thus don't have anything to loose if they rise up? 2) will the honest, wise wealthy people change policies before this happens, if only to save themselves?

Stay Tuned.

Sources:

Show Me the Money, Zine, Autumn, 2001, Tony Honeycut.