Posted on 06/22/2003 11:46:04 AM PDT by The Old Hoosier
Are We All Socialists Now?
Franklin Roosevelt and Lyndon Johnson would be proud of what the Republicans who run the federal government are doing now: They are planning to add a massive new element to the welfare state.
Cheered on by President Bush, the Republican Senate is poised to approve a bill adding a prescription drug benefit to the already bankrupt Medicare program. So far, there is no organized resistance to the plan in the Republican House.
This new entitlement is politically shortsighted, pandering to forces that could eventually smother the Republican Party. But worse, it is fiscally and morally indefensible.
In the short run, Republicans figure it will help them in the 2004 elections—particularly in the pivotal state of Florida, which George W. Bush barely won in 2000, and which has a large elderly population. In the middle run, however, the GOP may pay a great price for it at the polls. And, in the long run, it could help precipitate an economic and social crisis unequaled since the Great Depression.
A Fiscal Joke
As the Senate Finance Committee describes it, this benefit will give all 40 million Americans currently eligible for Medicare huge annual subsidies to buy drugs. For a nominal monthly premium of $35, a recipient gets a drug insurance plan with a $275 annual deductible. Between $275 and $4,500, taxpayers will cover 50% of the cost of all drugs that a Medicare recipient purchases.
Above $4,500, the benefit lapses until a recipient has paid a total of $3,700 for drugs out-of-pocket (equal to $5,873 in total drug purchases). From there on, taxpayers will pay 90% of a recipient’s drug costs.
Congressional Republicans estimate this will cost $400 billion over 10 years. The estimate is a joke.
"Since the program is an entitlement, there is no fixed budget," writes analyst Stuart Butler of the Heritage Foundation. "Moreover, the evidence from both private and public sectors in recent years suggests that future costs are likely to exceed projections. But even if they are accurate, it is not the next 10 years that matter. It is the years after that, when the full force of the Baby Boom generation hits Medicare and Social Security. Within 15 years Medicare already faces a Niagara of red ink. Adding a drug benefit without serious reforms and constraints on future spending means massive tax burdens on generations to come." Butler may be optimistic.
Medicare is already in the red—even if the government sometimes tries to hide this fact with smoke-and-mirrors accounting gimmicks worthy of Enron. In April 9 testimony before the House Subcommittee on Health, Richard S. Foster, chief actuary of the Centers for Medicare and Medicaid Services (which runs Medicare), stated the program’s bottom line for fiscal 2003. "Medicare, overall," he said, "is . . . projected to draw a net amount of $87.7 billion from the budget."
Fiscal Armageddon
Over the horizon looms fiscal Armageddon.
The two major elements of Medicare are Hospital Insurance (HI, or Part A) and Supplementary Medical Insurance (SMI, or Part B). HI is underwritten by a 1.45% payroll tax paid by all employees and employers (2.9% for the self-employed). By statute, SMI recipients are supposed to pay an annual premium set at 25% of its cost, with taxpayers picking up the other 75%. There are now fewer than four workers per Medicare recipient paying the taxes to cover these costs. By 2030 there will be only 2.3 workers per recipient. (For more info, click here.)
When Social Security and Medicaid (federally subsidized health care for the poor) are added into the fiscal equation for tomorrow’s welfare state it becomes obvious there is no realistic prospect for sustaining that welfare state—even without a prescription drug benefit—unless the government is willing to tax middle-aged working people into poverty.
On July 25, 2001, U.S. Comptroller General David Walker spelled out the problem for the House Budget Committee. "Taken together, the two major government health programs—Medicare and Medicaid—represent an unsustainable burden on future generations," said Walker.
"Assuming, for example, that Congress and the President adhere to the often-stated goal of saving the Social Security surpluses, our long-term simulations show a world by 2030 in which Social Security, Medicare and Medicaid absorb most of the available revenues within the federal budget," he said.
"Absent changes in the structure of Medicare and Social Security," he predicted, "sometime during the 2040s government would do nothing but mail checks to the elderly and their health care providers."
Between then and now, Republicans would find themselves perpetually out-bid by Democrats in their mutual efforts to pander to retired Baby Boomers who had been tutored by government to depend on government.
America would become a socialist country—with an increasingly aggrieved and impoverished bloc of people struggling to pay the taxes to cover the Social Security, drug bills and other medical costs of other people’s grandparents.
Conservatives believe freedom is a moral imperative—for old and young alike. Bloating the welfare state today with a new prescription drug benefit will diminish American freedom now, and could help extinguish it in the future. Republicans who call themselves conservatives should fight the plan, not help push it through.
You nailed it brother, keep preaching.
Bread and circuses anyone? Social holidays? Make work programs? Or did you miss studying that period of Republican history?
Your scenario appears ever more likely. After President Bush's prescription drug rip-off is enacted, and then compounded and expanded by "bipartisanship" (that's when Republicans act like Democrats), an Amnesty for Illegals will be presented as a necessity for the survival of America.
Would we let the likes of AlGore get away with this?
Remember the statement by a Democratic Presidential runner? "Take two tax cuts and call me in the morning"! Well, we have had 2 tax cuts, and at the same time our defense spending has increased. The POTUS gives speeches and (gasp) says "may God bless America" at the end of them. Also when is the last time that Democrats in the house and senate have been seen scrambling for an issue and a way to better the the conservative agenda?
If it IS incramentalism, I'm all for it for we HAVE advanced to a proper goal. More so than we have in a decade!
Hey, don't try to confuse us all with a bunch of outdated words you found in some archaic document or other. The Founding Fathers couln't possibly have foreseen the needs of modern society and the political situation of the current administration. < /sarcasm>
I find you to be right most of the time. IMO you are a lot more knowlegable and insightful than you give yourself credit for.
Maybe not but I guarantee you will appreciate his agenda.
I ain't very smart, but that don't make no sense.
It isn't. It's a multi-trillion dollar moneypit, and a boon to the forces of big, wasteful government. That my be your goal,it may be President Bush's, but I do not share it.
President Bush's Prescription Drugs Wealth Redistribution Act issn't necessary to win re-election, and is taking our party in the wrong direction.
You'd oppose this if AlGore was pushing it. Is it all about blindly following along, just for the sake of votes?
Imagine the cost of asprin if Bayer was the sole producer?
If Standard Oil and kerosene is any indicator then aspirin would be cheaper (inflation adjusted) than at any other time in history under a Bayer monopoly...
Its a well worn myth that monopolies always create higher prices. Past a certain point cheaper alternatives are sought out.
Democracy as created by the Athenians and Republican govt as perfected by Rome (Rome did not invent the overall concept) had as its basis some sort of social welfare program. The Athenian system was not free socialim like we know it-they were more like make work programs--something for something-not a free handout-the citizen had to work for his wage. The Roman Republic was more of what we would call a socialist state because their was no contingent for your bread. It was owed to you just because you existed.
So direct democracy actually is better off at fighting socialist welfare tendancies than a republic which tends to be more welfare oriented in development.
Either we are completely through the looking glass, or the corpse of John Maynard Keynes is now a Freeper.
I would oppose it if Algore was pushing it yes. Blind? Far from it! I don't get stuck on issues and instead look at the overall situation when I see an action plan in play, which I see our sitting POTUS laying out. If Algore were POTUS we would be focusing on issues instead of an overall change in our situation as Dubya' has focused on. I.E. Abortion, Global Warming, World unity, Internal cumbustion engines, power mowers....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.