We cannot afford the Affordable Care Act.
And the Morbid Dynamic…
v "We are spending 40 percent more than what we take in," Michelle Bachmann asserted during a Republican presidential debate on Oct. 11, 2011, at Dartmouth College in Hanover, N.H.
v When verifying the statement above Politifact said. “It turns out, she was actually lowballing the number. The correct percentage by which federal spending exceeded revenues in 2011 was 56 percent, not 40, but Bachmann’s broader point is correct. We rate her statement True.” http://www.politifact.com/truth-o-meter/statements/2011/oct/11/michele-bachmann/bachmann-right-spending/
v By 2020 the federal government will be spending 20-25% of revenues on debt interest. http://www.cbo.gov/publication/42466 (download the spreadsheet) The higher 25% is derived from the CBO’s alternate fiscal scenario which figures slow growth.
v “Just to Clarify: we’re not talking about paying down the federal debt, just keeping up with the annual interest charges on it…So America will be spending more on debt interest than China, Britain, Brazil, France, Canada, Australia, Spain, Turkey, and Israel spend on their militaries combined.” Quote: After America P5, Mark Steyn info source: www.rickety.us/2011/01/2009-defense-spending-by-country/.comv http://www.usdebtclock.org/ verifies the debt to be $16 trillion or $140,312 per tax payer on September 22nd 2012.
v The Debt is just the tip of the iceberg. After World War II we were, proportionally, in similar bad shape debt wise. This time around we have “unfunded liabilities” to aggravate crisis.
v Unfunded liabilities dwarf the debt. Pension plans and insurance companies are legally obligated to fund future obligations. Actuaries measure their saving and investing to ensure this. Government, however, does not follow any such rule for its future obligations like Social Security, Medicare, or state government employee pension plans. Why? Because politicians would have to tax us severely to fund promised giveaways from their intergenerational-neighbor-robbing schemes. Instead the weasels make us promises to get elected, but postpone the day of reckoning until after they’ve retired.
v Unfunded liability: Describing any liability or other expense that does not have savings or investments set aside to pay it. www.financial-dictionary.thefreedictionary.com/Unfunded+Liability
v USA Today estimates unfunded liabilities at $61 trillion. “The $61.6 trillion in unfunded obligations amounts to $528,000 per household.” http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm
v http://www.usdebtclock.org/ shows the unfunded liabilities at $120 trillion and over $1million per taxpayer on Septemeber 22nd 2012. Your children might not live in a million dollar house, but they are destined to make payments on one.
v “Terrifyingly, those entitlements (which include Social Security, Medicare, and Medicaid) will consume all tax revenues by 2049 if taxes remain at their historical norms.” http://blog.heritage.org/2011/07/29/morning-bell-struggle-to-solve-debt-limit-crisis-goes-on/
v “Just a reminder: We are in trouble. I have argued that the real national debt is about $130 trillion. Let’s say I’m being pessimistic. Forbes, in a 2008 article, came up with a lower number: $70 trillion. Let’s say the sunny optimists at Forbes got it right and I got it wrong. For perspective: At the time that 2008 article was written, the entire supply of money in the world (“broad money,” i.e., global M3, meaning cash, consumer-account deposits, checkable accounts, CDs, long-term deposits, travelers’ checks, money-market funds, the whole enchilada) was estimated to be just under $60 trillion. Which is to say: The optimistic view is that our outstanding obligations amount to more than all of the money in the world.” Kevin D Williamson http://www.nationalreview.com/exchequer/246159/our-debt-more-all-money-world
v Lying with astounding, and surreal claims: The “Affordable Care Act ACA will: Reduce the deficit by $143 billion over the next ten years, and by $1.2 trillion more over the following decade And it will provide coverage to 32 million more people, or more than 94% of Americans.” Claimed by Nancy Pelosi, Democrat and former Speaker of the House. The truth is that ACA will add to our debt.
v The ACA expands Medicaid by at least 17 million people including all adults, now including childless and able-bodied adults, who earn 138% of the Federal Poverty line. http://www.kff.org/medicaid/quicktake_aca_medicaid.cfm Taxes to fund the ACA collected from “Cadillac insurance” naively assumes employers and unions will keep those insurances even though taxes will make them more expensive. Some savings from Medicare assumes the Independent Payment Advisory Board (IPAB) will be successful in cutting Medicare reimbursements without angering the biggest voting bloc enough to cajole Congress to override them with a supermajority (A Constitutionally dubious supermajority requirement, passed by a simple majority –what a crock). Obamacare has made rationing of elderly healthcare more likely, but not a sure thing. Could a lopsidedly geriatric voting base elect an IPAB rejecting supermajority? You bet.
If so, the assumed savings by “rationing with our eyes open” to quote Obama’s head Medicare guy Don Berwick, will not materialize.
v Some funding for The Affordable Care Act cannot be counted, because it’s a tax that will be paid by the number one consumer of healthcare – the government. In other words the government is taxing itself. The $47 billion that the government will collect from fees and excise taxes on medical devices and drug imports will be paid by consumers, the same way sales taxes are paid by consumers. Government pays 40% to 50% of nationwide healthcare expenditures. In reality, only about $23.5 billion of the $47 billion can be counted as a net gain from those taxes because the government will be paying $23.5 billion more as a purchaser of those products. Tax info: http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act Health spending info: http://www.politifact.com/truth-o-meter/statements/2010/feb/16/joe-biden/biden-overstates-role-medicare-medicaid-us-health-/ & http://spectator.org/blog/2011/01/06/did-governments-share-of-healt
v Congress has consistently failed to estimate the cost of government health care, always low-balling the figures.
v The actuary who provided the original cost estimates for Medicare acknowledged in 1994 that, even after conservatively discounting for the unexpectedly high inflation rates of the early ‘70s and other factors, “the actual [Part A] experience was 165% higher than the estimate.”
v When Congress debated changes to Medicare’s home care benefit in 1988, the projected 1993 cost of the benefit was $4 billion. The actual 1993 cost was more than twice that amount, $10 billion. http://blog.heritage.org/2009/08/04/health-care-reform-cost-estimates-what-is-the-track-record/
v There is a morbid dynamic which pits the elderly against our children and vice versa in order to pay for Obama Care. Do we ration healthcare for seniors or ransom away the future for our children by saddling them with debt? Consider the money loser that is Medicare:
v The typical person paid around $64,971 in Medicare payroll taxes over his lifetime. Likewise, after netting out Medicare premiums, he’ll receive around $173,886 in lifetime Medicare benefits. The net? He can expect to receive around $108,915 more in benefits than he paid in taxes over his lifetime. http://www.aei-ideas.org/2009/08/have-seniors-really-paid-for-their-medicare-benefits/
v The Affordable Care Act seeks to shrink the $108,915 in order the pay for the expansion of government healthcare for non-seniors. If its weapon, The Independent Payment Advisory Board, is successful it is treacherous for Grandpa, Grandma, Pop, Pa, Paw Paw, Oma, Pappy and MeMaw. If the IPAB is unsuccessful, it means everyone who has a Grandma, Grandpa, etc. will be paying out the nose in taxes for debt accumulated by Obama Care. At some point, there will not be enough rich people to bear the burden of debt interest payments. The math is inexorable; it will hit everyone.
Conclusion: The federal government has two resources, the citizens of today and the citizens of tomorrow. Because tomorrow’s citizens do not vote presently, it is far easier for politicians to tax them. When politicians borrow from foreign and domestic sources, it promises to pay them back with interest. If there is the slightest bit of squeamishness with investors who disbelieve America’s ability to repay, they will bolt. What might cause investor disbelief? A new healthcare program that costs more than promised? Perhaps the debt itself and the amount of money dedicated to the interest will arouse doubt. When investors bolt, Uncle Sam will have to promise higher returns with higher interest rates to attract them back. The 20% of expenditures directed to servicing the debt will be remembered with fondness - remembered like warm sunshine. Sunshine from a setting sun that is.
There was once a time when we passed on prosperity to future generations. Today, the weasel politicians of our neighbor-robbing-state have found it easier to rob from future neighbors. Instead of passing on prosperity – we pass on our burdens.