Wednesday, February 16, 2011

Death Panels and Taxes

President Obama had barely finished outlining his proposed budget yesterday when FoxNews’ Sean Hannity turned a crimson shade of apoplectic.

Hannity could barely get words out around his outrage:

This is a cowardly budget! I'm going to tell you why because he didn't, he didn’t … and I think there's a set-up going on here! He didn't deal with all the entitlements … and here's what I think he thinks he's going to do, he thinks he can pull off a Clinton! That … he's not going to deal with entitlement reform which is where the real savings would be. He's going to let the Republicans do it! And then he'll, you know, send all the Democrats out there to say Republicans want old people in this country to die and eat dog food!

(Hannity obviously hasn’t priced a can of dog food lately, but I digress).

See it?

Right there in that last sentence? 

Hannity is outraged because he realizes that conservative pundits like himself have been hoist on their own petard. 

He had his rebuttal all set, script written, guests booked – and then the President didn’t cooperate. Ooooh that wraskely wabbit!

A quick review of Fox’s other talking heads confirms the basic observation and you can reverse engineer the pre-game strategy meetings from their universally sucker-punched expressions.  It’s the same slapped-in-the-face look Muhammad Saeed al-Sahhaf, otherwise known as “Baghdad Bob,” had on his face when he finally realized Saddam’s army had been outflanked and American tanks were rolling through the streets of Baghdad directly behind his TV studio. 

Hannity and the usual FoxNews Rogue’s Gallery were all set for the President to propose cuts to the sacred cows of Medicare and Social Security, then they could have launched the Mother Of All Battles: Death Panels II, Obama Killed My Mama!

Instead, the President suggested that Republicans, those supposed flinty-eyed fiscal conservatives, make the first proposal.

House Budget Committee Chairman, Paul Ryan, was also outraged.  Ryan claims the President “punted” by not proposing cuts to entitlement programs.

Conservatives love to be on record hating entitlement programs – but you’d be hard pressed to find a middle class conservative over 65 who doesn’t depend on both Social Security or Medicare for their very existence. You hear a hell of a lot of talk lately about “privatization” and “getting the government out of healthcare,” but the simple truth of the matter is that prior to entitlement programs, when both healthcare and retirement were private affairs, the vast majority of elderly Americans had neither.  American Seniors today damned well remember how their grandparents struggled back in the 30’s and 40’s and 50’s when there were no government run social programs for retirement. They damned well remember the Great Depression when there were no government safety nets and they remember the destitute and the poverty and the hopelessness. And, by God, they damned well depend on those programs today, yes they do.

And yet, and yet, perversely they rail against “entitlement programs” and hate the liberals who made the very programs they depend on each and every single day. 

Of course, to be fair, Democrats hate the President’s proposed budget as well. Democrat Kent Conrad, the Senate Budget Committee chairman criticized Obama’s plan, saying:

"We need a much more robust package of deficit and debt reduction over the medium and long-term. It is not enough to focus primarily on cutting the non-security discretionary part of the budget, which accounts for just 12% of spending this year."

Conrad is correct, however note that he also didn’t specifically mention Social Security or Medicare by name – because whomever does that first is going to get burned in effigy by the opposing party, the public, and the media (which is, of course, exactly what Sean Hannity was so pissed about when Obama didn’t do it). You’d have to be an idiot, or a true patriot, to commit that kind of political suicide.

Here’s the funny part, it’s all a smoke screen.

Well, a lot of it anyway.

Social Security has no impact on the national debt, the deficit, or the budget.  Medicare and Medicaid do, but not exactly in the manner folks like Hannity would have you believe.

Social Security is funded via the Federal Insurance Contributions Act (FICA) from a dedicated Social Security withholding tax on every US worker’s paycheck.  Let me spell that out for the slow people in the class, Social Security is not funded from Federal Income Tax, but rather from a specific income withholding with matching funds from employers. A separate payroll tax funds Medicare. The combined tax for both of these programs is 15.3%, half (7.65%) paid by you, half by your employer. If you’re self-employed, you pay all 15.30% but the “employee” part (since you’re both the employer and employee) is deductible from your federal income tax (so, technically if you wanted to argue the point, I’m wrong – a small, very small, percentage of federal income taxes do, in a way, go to Social Security. Sort of. If you’re self employed).  FICA withholdings are paid into a trust fund, the Federal Old-Age and Survivors Insurance Trust Fund.  Each month Social Security checks are issued and paid for out of Social Security revenues, any shortfalls are made up from the trust fund.  Under most circumstance, Social Security takes in more, a lot more, than it pays out – for example in 2007 the fund, between FICA tax revenue and interest on the fund, took in $2.2 trillion more than it paid out.  Last year, because the economy sucked, the fund lost a bit – but not much in the grand scheme of things.  When the program first started way back in the 1930s there were roughly four people paying into the program for every one person collecting a check. Now a lot of folks likened Social Security to a Ponzi scheme – which it is, after a fashion. But see a Ponzi scheme works, as long as there are more people paying in than checks being sent out.  Currently there are about three people paying in for every check going out, and as the Baby Boomers retire that ratio will drop to roughly two to one where it will hold and then slowly climb back up over the next couple of decades as the Boomers die off. There’s a lot of talk of Social Security “going broke” and it will, about 30 years from now, if nothing is done or if the population continues to age without regaining a more natural balance – both of which are extremely unlikely.

Whoa, hold on there, Jim, I hear you say in that outraged tone you use when you’ve watched too much FoxNews, the Trust Fund is joke, those filthy bastards in Congress keep raiding it!  Um, yes, that’s how it’s supposed to work.  The trust fund isn’t some huge pile of cash stashed under Ben Bernanke’s mattress.  Social Security revenue is converted into Special Series government bonds, sold to the public, and used to finance the business of the United States. That’s how it’s supposed to work as defined by Title 42 of United States Code, Section 401(a).  At the moment, the Fed has about $15 trillion in outstanding obligation, i.e. the amount the government would have to pay if every single one of those bonds were cashed at once.  And yes, that would most certainly bankrupt the country, just as if every member of a bank chose to withdraw all their funds at the same time would bust the bank – which is why there are certain safeguards in place to prevent both events.  Yeah, ok, Jim, but why then all this hoopla about the trust fund? Because currently Social Security payments are made from revenue (those FICA withholdings you see on your check stub each week), when outputs exceed input the difference will have to be made up from the trust fund – that point, if nothing else is done at all – will be decades from now. And even then, all it means is that the US Treasury would have to make up the difference from its obligation, in other words we’d have to use federal tax dollars to make up the shortfall.  Again this is assuming that nothing is done, at all, in the next couple of decades.  A tiny increase in the percentage of FICA withholding, for example, would shove that deadline back another decade, or further. So would upping the retirement age from 65 to 65.5 or 66 or even 70 – you know, as the population ages and people remain active longer and longer and want to stay in the work force. A restored economy would also significantly add to the fund.  There are many, many simple and painless and even desirable solutions to this distant problem – most of them are those “common sense” solutions you hear so much about from Conservatives pundits.

Now, here’s the part nobody ever mentions: it could go the other way just as easily. I.e. if we were to experience another sudden population increase, another Baby Boom (perhaps at the end of this war) the fund would eventually get another huge increase pushing the date of accounting back many decades – and that is if no modifications to the current program is made in any way – add that to the current projections and you’ll find that the program could remain solvent for nearly another century.  Here’s the really funny part, you don’t need to have more babies, a population surge could be induced in other ways – say by encouraging large scale legal immigration.  Something else to note: a lot of illegal immigrants pay into Social Security via stolen or falsified Social Security numbers; very very few get anything out, that’s like free money for the rest of us – to the tune of billions – which more than offsets the cost of those who defraud the program, illegals and valid US citizens alike. Kick out the illegals who contribute to the Social Security fund, and you get to pay for the cheats. Didn’t think of that, did ya?  That’s OK, neither did Rush, or Glenn, or Sean, and Palin is making the derp derpa derp noise in her head  – which is just another reason not to listen to any of them. Just saying.

To review, Social Security does not affect the current debt, deficit, or budget. Social security is in no immediate danger.  The Social Security Trust fund is functioning exactly as designed.  And social security is not an entitlement, or a freebee, or redistribution of wealth, or any other such bullshit, it is retirement insurance backed by the US Government and nothing more.  It’s not a crisis – though pretending that it is makes good political hay with a rather large conservative voting demographic that spends most of its time being scared shitless of one damned thing or another.  If the Obama budget had mentioned Social Security in any way whatsoever, today you’d be hearing the words “Death Panels” on every conservative talk show in the county – and Hannity’s reaction is proof positive of how disappointed those conservative pundits are that it’s not.

Medicare is another story.

Medicare was designed to function much like Social Security (and was, in fact, created as part of the Social Security Act of 1965).  Because of massive increases in medical costs, far beyond the annual cost of living increases covered by Social Security, Medicare spending increases significantly from year to year and this year will make up over 20% of the Federal budget.  As of 2008, costs exceed revenues and the program will go broke within the next ten years if nothing is done, and likely sooner if medical costs continue to increase at the rate they have historically.  Americans pay on average double per capita in medical costs what the citizens of every other advanced nation in the world do.  And this nonsense of “the best medical system in the world” is exactly that, utter nonsense. That is a complete and total myth, a lie Americans tell themselves so they can feel superior instead of facing the easily proven truth – and the idiots repeating this lie loudest are the ones without medical care. The American medical system isn’t even in the top ten, hell it isn’t even in the top thirty, and is in point of fact this year ranked 37th by the World Health Organization, barely above Slovenia in things like access, life expectancy, preventable deaths, basic health, rate of infection or sickness, prevention, immunization, education, infant mortality rates, affordability, long term care, pre-natal care, and so on in nearly every single category that matters.  And the costs of medical entitlement programs are the second largest cause of our current financial woes.

Again, to review, we pay twice as much for about one third the medical care that all those “socialist” countries do.

Which was the whole damned point of healthcare reform.

You remember healthcare reform, right? The same exact reform that Sean Hannity and others of his ilk protested so vehemently? The same reforms that Sarah Palin condemned as Death Panels? The same reforms that Conservatives fought so hard against and the reforms they’re trying to repeal and defund right now? Oh, yes, that healthcare reform. Heh heh. Oops. Perhaps they should have participated in the process, instead of acting like spoiled children.  The President tried to make decent healthcare available to all Americans for a price we all could afford and the Right not only vilified him for it, they labeled him an enemy of America. 

Now they’re upset that he didn’t bend over so they could rape him some more? 

Ryan’s wrong, Obama didn’t punt, he did an end run.

If Conservatives want a realistic budget, they will have to fix healthcare. 

Healthcare reform is a dirty word in America specifically because Conservatives made it a dirty word.  So, if they want to fix the second largest expenditure we have, they are going to have to be the bad guys. 

You makes your bed, you lies in it – those are the rules.

And that takes us to the final piece, the single biggest expenditure we have and the Conservatives’ biggest and most bloated sacred cow: Defense.

You want to talk about entitlement programs? You want to talk social welfare? Government bailouts? The money loaned to the auto industry, the money given to Wall Street, the money spent on every single welfare cheat and Social Security fraud and illegal alien anchor kid sucking up space in one of our public schools combined is nothing compared to amount of taxpayer dollars thrown at the defense industry.   We cannot balance the budget, we cannot pay off the national debt, we cannot reduce the deficit, unless we drastically reduce defense spending. Period. 

The Secretary of Defense knows this, he has taken steps to significantly reduce his budget.

It won’t work.

Here’s why:

Conservatives will do everything in their power to put that money right back.

Let me give you an example:  Speaker of the House John Boehner condemned the President’s budget for not going far enough, for being cowardly, for not trimming away the fat and the pork and the things a deeply indebted nation must do without.  The Speaker feels so strongly about this that he threatened to shut down the government, actually shut down the government, shutter the doors and turn off the lights.

But what Boehner failed to mention is that while he castigated the President for not cutting non-essential programs, Boehner himself is the leader of a large group of congressmen who insist that the military buy an “alternate” engine for the already enormously expensive F-35 Joint Strike Fighter.  That airplane was supposed to be a jack-of-all trades military fighter, a single ring to rule them all if you will. Stealthy, fast, fighter, bomber, vertical take-off, carrier capable, multi-mission configurable, and etcetera and everything including the kitchen sink and a cappuccino maker – and it was going to do all that at half the cost of the very, very expensive F-22.

Yeah. Sure.

Today, the F-35 is single most costly weapons program in the history of the United States.

Yes, you read that correctly, the F-35 program is costing us more than the Manhattan Project, the crash program which created the first atomic bombs during WWII. The F-35 airplane program costs more, enormously more, than the nuclear powered aircraft carriers it will someday land on. The airplane, which was supposed to save us money, is now years overdue, uncounted billions over cost, and mired in technical problems that will probably kill a few dozen pilots before they’re fixed – if they ever are – and it won’t do one goddamned thing to help our soldiers, sailors, and airmen fight the conflict they are currently engaged in any way whatsoever.  

If ever there was program ripe for some trimming, it’s the F-35.

Instead, Boehner wanted to spend $450 million of your tax dollars to develop and manufacture an “alternative” engine for the airplane that will never be used. Why? Well, because that engine would be manufactured in his home state, that’s why.  Just for reference, that $450 million is more than twice what Alaska’s Bridge to Nowhere would have cost.  The difference being that bridge would have eventually paid the money back in tolls, the F-35 program won’t.  Worse, having two different engines, made by two totally different competing manufacturing lines, would require two differently trained ground crews, logistics chains, and technical schools to maintain and operate – oh, and by the way, the parts aren’t interchangeable. Those of you experienced in military operations, especially maintaining military systems at combat ready in a war zone, should understand exactly what I’m getting at here – sooner or later, this kind of bullshit kills people, usually pilots. Taken far enough, it will lose the war for you. (There’s also a certain degree of irony here, given that the folks behind this nonsense think that multiculturalism and pluralism are bad for people, but good for airplane engines.  Again, I digress. Excuse me).

But wait, it gets better.

President Obama, President Bush before him, the last three secretaries of Defense, the heads of the Air Force, Navy, and Marine Corps,  and dozens of lawmakers have repeatedly tried to kill this goddamned worthless engine – but John Boehner, who trumpets fiscal responsibility, insists that it be made. Over the next three years, that engine would have cost you, the taxpayer, more than $3 billion – the cost of one Nimitz class aircraft carrier.

$3 billion.

That’s one airplane.

No, strike that. That’s one component of one airplane.

Now, take the entire Department of Defense and multiply it times 100 Senators times 435 Congressmen and you’ll have some idea of where your money is actually going and why we’ll never, ever, ever, ever, ever, ever get a balanced budget unless we first do something about Defense.

John Boehner would have you believe that the tiny handful of women who get some government assistance for their $90 Planned Parenthood abortions are robbing you blind.  The Tea Party wants you to believe that teachers are stealing your money, that paying the highly educated professionals who are teaching the next generation how to successfully compete in an ever more complex world (not to mention giving them the basic skills they will need to maintain the technological marvel that is the F-35) aren’t worth paying a living wage and that our schools aren’t worth funding. Conservatives would have you believe that it’s the National Endowment for the Arts, or after school programs for poor kids, or government cheese that is bankrupting the country.

But it’s not.

It’s arguing over programs that aren’t broken.

It’s paying twice as much for half as much healthcare.

It’s billion dollar jet engines.

It’s trillions in greed, and selfishness.

It’s self serving hypocrites just like Sean Hannity and John Boehner. 

That’s exactly what it is.



Note: in a late vote today, the alternate jet engine for the F-35 was finally killed by Congress.  John Boehner voted to keep the program.


  1. This comment has been removed by the author.

  2. Extending the Bush Tax cuts add 3.9 trillion to the deficit in its first 10 years. That's more than the entire budget Obama just proposed. When has any family or business sat down at the table with their "in the red" balance sheets and have the first thing that comes to their mind is to decide to reduce their income? We've been drinking the Reagan koolaid and eating our seed corn for too long.
    We need to stop pushing the debt to our grand children and local government and do pay as you go taxes.

  3. I knew what you meant, Lee, even before you corrected your comment ;)

    And you're right - the simplest, long term, and most common sense solution to America's financial problems would be to let the Bush Error tax cuts expire.

    But, what do you expect from a bunch of people who spend billions on weight loss gimmicks instead of engaging in simple diet and exercise?

  4. Talking about a problem is *exactly* like doing somthing. Wait is that a religious or business principle?

    Nice post.

  5. My retirement age, which I won't reach for a couple of years is 66, and I think for my son, who won't get there for 30 it is 69.

    Simply lifting the cap on FICA will cure SS problems for several more decades.

    If one cherry picks, the US has the best health-care system in the world. I know of nothing at the level of the Mayo clinic and associated hospitals. The great teaching hospitals of NYC, I use NYU-Tisch, are unmatched although I suspect that one can find multiple peers. I also have very good health insurance, which is part of my retirement package, Medicare coming up and the VA as a backup.

    This is not a level reached in most of the US. For my last hand surgery the surgeon's fee was $17,000. I've no idea what the hospital bill was, I had reached my insurance annual cap so I never saw it.

    As for the F-35, I think they tried this before under McNamara and ended up with something too heavy for flight decks. But you/we are never going to do anything about DoD, see Eisenhower's farewell address on that subject, nothing has changed.

    Good post.

  6. A few thoughts on Social Security: We wouldn't be having the shortfalls we are experiencing in the trust fund, had it been treated like a trust fund, rather than as additional general revenue. Every President has done it, and Clinton raised it to an art form, showing budget surpluses that only existed if you treat FICA as general revenue. Take away the government's credit card & set FICA contributions off-limits. That's going to have the side effect of driving our budget shortfalls to truly eye-popping proportions (as if they aren't already), but it's going to give Americans a true picture of what kind of cuts - and/or tax increases - are going to be required to actually balance the budget. And it's going to make Social Security work the way most Americans have thought it was supposed to work for the last half century.

    Secondly, raise the FICA cap. Hell, I'd be for eliminating it altogether, but that ranks me in with guys like Stalin & Marx, et. al., with the Hannity crowd. The idea behind the cap is supposed to be that a guy making a mil a year isn't going to want to retire on a grand a month, so we let him contribute up to the point at which he will likely draw out & let him contribute the proceeds above the cap to a private fund. Only, Social Security is about not wanting our elderly living on the street, and a guy making a mil a year can pay the FICA & still find the money somewhere to provide for his retirement at 45.

    Healthcare? Don't get me started...oh wait, you already did. My Mom is from Germany, only one of 5 sisters who left the country. I have a lot of relatives over there. The healthcare those people get make what we have here in America look truly, truly sad. Republicans like to talk a lot of nonsense about waiting for weeks in writhing pain with an exploding appendix for an operating room to become available, but anybody who actually bothers to take a first-hand look at how their system works knows that's a bunch of bullshit. My uncle, following surgery for a heart attack, actually got a recovery period at a freakin' spa afterward. Show me the private health insurance program over here that provides anything like that. With medical costs spiraling here in the U.S., and the quality of care declining, as you point out in your article, the simple truth is that single-payer healthcare is coming to America, and that quite soon. Get used to it, everyone else has. And they love it. Ask a Canadian. This is about a gravy train. For HMOs, for hospitals, for doctors and for pharmaceutical companies. They are making a hell of a lot of money off our current 'world-class' healthcare system, and they're willing to donate large portions of the steaming wads they're earning to the GOP to ensure things stay this way for another decade or so.

    Immigration? This is one of the few things that Bush actually had the right idea on; he nailed the solution. Every illegal alien currently in the U.S., please report to your nearest ASC center, let us take your picture & fingerprints, and here is your shiny new green card. Welcome to America. You now work for minimum wage, on the books, and pay taxes. Just like everyone else. If Johnny-GOP wants a job picking strawberries so god-damned bad, he can line up at the office along with you. Everyone in Mexico thinking about coming up? Report to the checkpoints in El Paso, San Diego & Brownsville, let us take said pictures & fingerprints and here's your green card. Welcome to America. The benefit to the guys who patrol the border here? Anybody they see humping the Sonora at 3AM you can shoot; they're up to something we won't like.

  7. God, I just don't know how to write out a short reply, do I? LOL!


    Budget savings? Hell, you want to know a way to save the taxpayers a lot of money right off the bat? Run the procurement process exactly the way it currently is done, but add one thing. Once all the bids are in, for stuff like paper clips & copier paper, have someone in the GAO get a frickin' Sunday paper & check the sales ads. If the item being bid on can be found there cheaper, send a detail down to the local Office Depot in a convoy of deuces, walk in and say, "We'd like 5000 of this, and can we get a raincheck?" There are a lot of pure pork-barrel items that need due attention, as you point out, but if our government could seriously buy #2 pencils for less than ten bucks a box, we'd be on a good track.

    By the way, I was doing some back-reading in your post stack, and you still haven't mentioned whether I've earned a spot in the zombie bunker for suggesting adding Pink Floyd's 'Run Like Hell' to the iPod... :)

  8. Canadian here.

    Our health-care system is cheaper than yours because we don't have anyone trying to skim profit off the top. Sure, the doctors, nurses and other health professionals make money. And the drug companies make money. And the hospital administrators make money. But for us, that's where it stops. There's no insurer who's getting rich and no hospital boards of directors getting rich.

    There are lots of things we could do to cut costs even further. I would like to see us doing bulk purchases of drugs and medical equipment instead of buying as individual provinces and territories. I think there might also be savings in providing some specialised medical services at regional centres instead of trying to provide everything in almost every province. (We do this in the Northwest Territories now, because we're much too small to provide all services here.) I also think there would be savings in cutting the administrative duplication of multiple health boards.

    But all of those are things you guys in the States can't even start talking about as long as you have the system you have now.

    I'm a small-government libertarian, but even I have to say that there are some things that make more sense for the government to provide instead of asking individual taxpayers to pay one at a time. Things like roads, police, and, yes, health care just ought to be paid through tax dollars.

  9. Great post, Jim. Anything else I'd add has probably been said, so I'll leave it at that.

  10. This comment has been removed by the author.

  11. Excellent post! I linked to it so I can point people to it easier.

  12. While I agree the cost of the F-35 is getting out of hand, the original goal was a reasonable one to shoot for. It wasn't one exact plane to fulfill all those roles, it is a family of as similar as possible planes. Then use those similarities to drive down costs.


  13. Well, if it isn't any of those $90 Planned Parenthood abortions, I'll bet it's those dirty unions. (the argument being made here in Ohio, you know, after our new governor raised the salary for his politicly appointed heads of departments and cut their staffs' salaries).

    Sigh. Do we really have to refight the 50s-80s again?

  14. Great post. In my opinion, the difference between “Liberals” and “Conservatives” is not that one promotes government spending and the other does not; they both love to get their hands into the publicly funded cookie jar.

    The difference between them is whom they favor with the pork they so dearly enjoy spreading. The “Liberals” seem to enjoy spending on social programs, those that benefit the average citizen. The “Conservatives” seem to enjoy spending on defense and tax laws that benefit the rich (also known as “Corporate Welfare”).

    Sadly, the people we have hired to run our government are interested in one thing, and it ain’t seeing to the best interests of this country. They are interested in gaining and maintaining political power. Period. So if anyone thinks that any politician in this country will tell us that we have to do without (either in the form of increased taxes or reduced services) in order to straighten out the mess we are in, they have another think coming.

    For anyone interested in a closer look at the military industrial complex, I recommend a documentary entitled “Why We Fight.” It will simultaneously enlighten you and piss you all the way off.

  15. On a lighter note, the reason why stuff like this burrows its way into the heads of drooling Fox minions is the same reason this happens:


    An inability to analyze a situation & foresee the end result.

  16. So much to say about life before social safety nets, and about the relentless effort in the last 30 years to dismantle all government programs and turn them over to profit-making private sector thieves, that I won't even get started.

    Raising the cap on social security: Recently, someone defensively and angrily asked me how it is fair to expect people who earn more money to pay social security taxes on 100% of their income. He was incensed at the mere idea of it.

    First, most of us have not argued for that because we know it would never fly, so we've argued only for raising the cap a few percentage points. (Only 2% would take care of it for decades, but it wouldn't necessarily put the benefits back to where they should be for widows and children, which unbeknown to most people until they need those benefits, have been severely cut back by the Republicans over the last 20+ years.)

    Second, why is it fair to tax someone earning $106,800.00 or less on 100% of their income, but "unfair" to tax 100% of the income of someone making more than that?

    As one example of two income extremes: Why is it fair to tax 100% of my son's income-a young man who's worked as a cook 6-7 days a week for the last year-and-a-half, including double shifts multiple times a week, to earn less than $25,000.00 a year, while it is unfair to tax Bill Gates on 100% of his earned income?

    It's fair to tax 100% of the income of a family living on $50,000.00 a year, but it isn't fair to tax 100% of the income of a family living on $500,00.00 a year?

    Do these people ever hear themselves? And, really, just who among us is suffering from a sense of entitlement?

  17. A few nits.

    The total Social Security/Medicare tax has been lowered to a total of 13.3% for this year,(4.65 and 1.45 respectively) 5.65 (down 2%) for the employee share and the balance of 7.65% unchanged from prior years by the employer.

    There is no cap on the Medicare portion and that remains at 1.45% for both employee and employer.

    Quite eye opening though on the other issues.


  18. aggirl, yep, you are correct. I accidentally took my figures from last year's column instead of this year's on the GAO table. Thanks for correcting my mistake.

  19. To quote G.K.Chesterton: "The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected."

    Nothing has changed since his time, has it.

  20. Excellent post. I tend to think about Medicare and Medicaid from the perspective of a clinician trying to get reimbursed for services rendered. I haven't often thought about the underlying economics.

    Most people who think the US has a great health care system are the "haves" rather than the "have-nots". I'm no health policy or public health expert, but I believe that there are 3 criteria necessary for a country's health care system to be considered "good": adequate health insurance, access to decent primary care physicians, and access to specialists and sub-specialists. (I am leaving out basic public health necessities such as adequate vaccination programs, clean water, and reasonable sanitation, among others...)

    I don't know the actual statistics (and don't have the time right now to do the research), but I strongly suspect that the majority of the American population does not have access to health insurance, good PCPs, and well-trained specialists. I do, and consider myself lucky for it.

  21. 6 things could fix the U.S. problems with money:

    1. Remove the FICA income cap.

    2. Gov't pensions and medical care must be paid into by the individual being covered.

    3. Flat tax on income from any source with no ifs, ands, or buts (i.e. no exemptions or write-offs whatsoever).

    4. Balanced budget amendment and no one who is in state-wide or nation-wide elected or appointed offices gets paid until the budget is passed by Congress.

    5. Extend slander and libel laws to cover politicians and media statements that are misleading. The price = community service at the local level most affected (and some stuff at the national level would have Cheney working in every county in the US that's lost their sons and daughters in his Oil Wars).

    6. Stop thinking that doctors and nurses are making a lot of money on health care. Look more closely at the 'administrative costs' that insurance carriers (including Medicare insurance plans) charge. Yes, there's fraud in the system, but it is trivial money compared to what the corporate boards are skimming off the top. If an insurance plan executive made only as much money as their highest paid physician, there's be a great deal of money freed up for other uses.

  22. If you want a true long term fix, you need to declare corporations are not people and have no rights except those explicitly granted to them.

  23. In my opinion, most of the conservative angst over the social safety net has nothing to do with the abstract concept of socialism, and everything to do with the Great Society.

    In other words, SS and Medicare for People Like Us (hardworking, churchgoing, *cough*white*cough* real Americans)...no problem.

    Taxing us to pay for unearned benefits for the underclass? It's SOCIALISM!

    There's a hard core of libertarian ideologues--be they pundits, politicos or plutocrats---who muddy this issue terribly with blanket condemnations of collective action and communism.

    But the masses of white working class Reagan Democrats have no problem with old-style entitlements.

    They just don't want liberal elitists like Obama cutting their Medicare for the benefit of no good welfare queens.

    This insight is the key to understanding the supposedly hypocritical Tea Party "get your government hands off my Medicare" thing.

  24. Obama's budget plan and fiscal plans are well received with staunch opposition. I would welcome public debates on this one.


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