Unintended Consequences

Unfortunately, programs inculcated as a nation drives itself toward becoming a welfare state are configured with little thought of conditions obtaining beyond their enacting time-frames. In 1937, when Social Security became operative, average life expectancy for men and women born that year was 63 and 65, respectively, meaning that multitudes were never expected to draw benefits. Those born in 1900 had life-expectancies of 46 and 48 years respectively, meaning that most of them were not expected to live to retirement age or even close.

The law of unintended consequences always plagues good intentions. When Medicare became operative fulltime in 1967, life expectancy for men and women was 67 and 75 years, respectively (all races). The government outlay in Medicare payments in 1967 was $3.4 billion. The accumulative inflation-rate since 1967 is 600%, so that figure was $20.4 billion in today’s dollars. The Medicare outlay this year will be $588.7 billion minus $78.1 billion in premiums for a total of $510.6 billion, or an increase in 46 years of 2,003%, enormous by any standard.

Population increased 1967-2013 from 200 million to 310 million—55%—so that has to be factored in the equation—more people living longer—thus an increase in Medicare payments could not have been expected to amount to just 55%. People born this year have life expectancies of about 76 and 81 years, respectively, for men and women. These statistics are from HHS, U.S. government. Twenty-five percent of Medicare payments are made in the last year of an old codger’s life, thus adding to the problem – age-weakened/sickened people living much longer than anticipated in 1967 or even now. An 85-year-old male in 2010 could expect to live 7 more years, according to HHS.

Social Security collections and benefits are based on irrefutable data and therefore totally unsusceptible to corruption. Contrarily, Medicare and Obamacare are based on what the market/government will bear, both honestly and dishonestly. Suppose Medicare payments had merely quintupled (increased by 500%) since 1967 as the population increased by a tenth or so of that percentage. The outlay in 2013 would be about $100 billion, not $510.6 billion. The costly difference between SS and these programs accrues to the fact that people/corporations/pharmaceuticals/government and the medical profession have vested interests in them, with profit and/or corruption the driving forces and virtually no accountability.

The national debt stands at $17 trillion, far beyond comprehension. Annual deficits run at $1 trillion, meaning the nation subsists on borrowed money without a prayer under current circumstances to crawl out of the hole, just mostly pay the interest on debt and print money. Obamacare is slated to cost $1.8 trillion over the next decade, with the government claiming $771.3 billion in revenue to take care of new Medicaid expenses, not nearly covering the shortfall.

Another $1 trillion is slated for spending on subsidies until 2023 for insurance payments for individuals making up to nearly $46,000 per year, $94,200 for a family of four. This should give an idea of what the government expects the insurance premiums to be—out of sight. This leads to the obvious design of the president, to wit, keep raising taxes—everyone’s taxes—to pay for a program so absolutely unpredictable as to be beyond reason.

The figures are shocking, especially when thinking of the immense graft and waste that will attach to Obamacare, just as with Medicare and Medicaid. That which belongs to the government belongs to no one and is thus subject to whatever fraud/gaming that can be contrived to subvert it. The projected ten-year spending of $2.8 trillion means nothing. No one has any idea what the actual cost will be except that it will be far more than projected.

The president understands the pitfalls and by executive order or some such instrument nullified until 2015 the hugely important part of Obamacare (enacted for enforcement in January 2014) requiring businesses to furnish employee-insurance via government fiat, the result being businesses installing part-time jobs to beat the law. This enhances the recession and makes the elections in 2014 critical to the nation’s solvency. The shutdown that has just been lifted only puts off until after January the same battle over righting the U.S. financially, with a new threat of shutdown.

There have been no winners in October, but plenty of whiners.

And so it goes.
Jim Clark