Thoughts on national health care

“Obamacare” is a disaster in waiting. There is no way that tens of millions of people can be added to a system while achieving cost savings (unless there is heavy rationing). The cost estimate I’ve seen for Obamacare is $1.6 trillion. As Ron Paul has noted, you can triple that with most government programs (case in point, Bush’s prescription drug plan). The U.S. simply doesn’t have the money for “national health care.”

Few have noted that the existing system, although preferable to Obamacare, is also doomed. Fewer indeed have noted that the health care system is already largely socialized; more than half of health care spending is Medicare, Medicaid, etc. And even fewer than that have noted that Medicare and Medicaid account for the majority of the unfunded entitlements (i.e. the difference between benefits promised and what will be collected in taxes and premiums). Medicare, not Social Security, is the largest Ponzi scheme in the history of the world.

In fact, according to these guys, Medicare’s future liabilities are $89 trillion. Let me repeat that: $89 trillion. To give you some perspective on how massive that sum is, total federal tax receipts for 2007 and 2008 averaged around $2.5 trillion a year (so far this year, receipts are down over 30%). Obviously there is no way the U.S. will ever pay for future Medicare liabilities. It couldn’t do it if it taxed everyone 100% of their income. The figures keep climbing, too. The government is adding another ~$2 trillion to the debt this year alone.

What the government should do is repudiate (or at least restructure) its current debt. It should use this framework to overhaul the health care system. The government should phase out all entitlements– all of them– because all of them are unconstitutional, unsustainable, criminal Ponzi schemes. For all of you who were expecting your Social Security and Medicare benefits, well, what can I say? The government already spent the money and then some. Don’t shoot the messenger. The treasury is empty except for a colossal mountain of IOUs. It is simply immoral for us to find more foreign government suckers to buy our debt (which we can’t ever pay back) just so we can have our “right” to costly health care. We don’t have a “right” to ride the backs of Chinese peasants who are forgoing their own consumption to fund ours.

So I’ve outlined what the government should do. What will it actually do? I’m guessing that it will do what it always does and take the path of least resistance (i.e. the one that’ll get politicians re-elected). The Republicans and Democrats will compromise on an awful non-solution or things will remain as-is. In either case, the government will keep trying to find suckers — the Chinese government, the Japanese government, mom’s mutual fund, etc. — to buy escalating piles of treasury debt. The promises will remain: “Don’t worry folks, your programs are safe.” Eventually there won’t be any more suckers to buy our debt, or perhaps escalating unemployment will trigger massive inflation as the government encourages the banks to start lending out their reserves (the reserves they gave the banks in exchange for worthless “toxic” assets). Don’t be surprised to see a full-fledged dollar crisis and massive inflation. Things will get ugly in a hurry. Eventually rationing will begin in earnest. People will slowly realize that all that Social Security and Medicare they were expecting just isn’t going to be there. Their money won’t buy anything. They’ll have full health care, but they won’t be able to get in to the doctor or get the treatment they want.

And the lies will continue until the bitter end.

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