If you have read my Social Security post, and come to terms with it….this one will scare your pants off.  Social Security is a mild problem in comparison.

I don’t even know where to begin, so I will point you to a 6 page report written by the CBO in 2002.  This report says that because Medicare is so expensive and we are choosing not to fund it with revenue we will see dramatic growth in debt and therefore interest.  This interest growth will overwhelm our budget.  According to this report in 2075 our operating budget will be 40% of GDP.  Forty percent of everything we make in the US will go to pay for the Federal Government!  Social Security, Medicare, Medicaid, and interest on the debt will make up 82% of the Federal Budget if that report turns out to be accurate and we don’t address this.

That report is out of date.  It assumed that we’d have 20 years of surplus from 2000 to 2020.  Obviously, that is not the case.  I have asked the CBO if they have an updated version of this report.  Their response was no, and they don’t plan to.  They only generate reports at the request of congress.  As you review this report, pay special attention to Figure 2 on page 3.  As you absorb this, realize that historical tax receipts vary as widely as 15%-20% of GDP, and this forecast was based on the assumption that we would be running budget surpluses from 2000-2020.

If you think that Government run Medicare and Medicaid and the new Federal version of the MassHealth plan are a good idea… The Seattle Times reported that Walgreens in Washington state will no longer accept new Medicaid patients as of April 16 because they losing money filling those prescriptions.

We need reform, we need cuts, but this isn’t the way to do it. It will end badly.

Filed under: Uncategorized | Posted on March 20th, 2010 by Holly

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