The financial crisis in Medicare is so large and so far away that nobody really wants to talk about it. However, reality always intrudes on our fantasies and delusions.
At the center of all this is the concept of a trust fund. Right now, payroll taxes are greater than the program expenses. The difference goes into a trust fund. This is a misleading term, because the governement takes the money OUT of the trust fund, replaces it with an IOU, and throws it into the general fund for use by the greater government. In the last 8 years or so, the general fund has been running a deficit, even though it has gotten additional revenue from this transfer from the social security and medicare trust funds.
In other words, there really is no trust fund for medicare. It’s nothing more than a pile of IOUs. The day is soon coming when the medicare outlays are greater than the incoming funds from payroll taxes. The medicare program will then start to draw on its pile of IOUs. Drawing from this pile means pulling funds from the general fund. This means that instead of medicare helping the general fund, it will start sucking money out of it.
We are run by monkeys! The whole purpose of the trust fund was to pay for the retirement of the baby boom generation. In other words, the baby boomers had to help pay for their own retirement. Even if that was the intent, that is not how things work in reality. In reality, the government spent the extra money instead of saving it away. So, when the bill comes due, it will be the next generation footing the tab.
There are a couple of ways to fix this problem. A large part of the difficulty with medicare is the rising cost of healthcare. If healthcare costs can be reduced, this will reduce the programs expenses. Other ways to fix this include raising existing payroll taxes and/or reducing benefits.
If nothing is done, the government will have to drastically cut spending elsewhere or go bankrupt. I don’t think either of these two options are likely to happen. I’m guessing that payroll taxes will be raised, benefits will be cut, and some major initiative to decrese the cost of healthcare will be implemented. I hope these changes will be implemented by the next president / congress. The crisis won’t really start to hit until 2014, so change might be delayed for quite a few years.
I am pretty pissed right now. My Texas landlord is attempting to stick another $625 dollar charge in ‘damages’ onto my bill. This is on top of the $425 re-let charge. Anyone who knows me well knows that my favorite words in situations like this are ‘kiss my ass’, and ‘go fuck yourself.’
Well, it’s still close to Easter, and I’ve been thinking about that whole violence / non violence thing. You won’t hear this version of Easter in church, but the story of the Easter weekend boils down to God loving his creation so much that he let himself get fucked over by the same. It’s a good thing I’m not God because I would have squashed the little buggers. So, between the parts of the Bible that talk about ‘turning the other cheek’ and ‘if someone makes you carry his bags one mile, go with him two’ and ‘love your enemies’, it seems there is the way of anger and vengence and then there is the OTHER way.
I think I’ll give the other way a shot and see what happens. Perhaps sometimes when you win, you really loose and perhaps this is one of those instances.
http://business.smh.com.au/billionaire-burnt-by-bear-stearns/20080323-214e.html
THE British billionaire Joe Lewis splashed out millions of dollars on Bear Stearns shares just a few hours before the investment bank ran out of money and appealed to the Federal Reserve for a bailout.
Gotta love this. A Brit, lost half his fortune and is asking for someone to bail him out. Sure, I bet it hurts to lose a billion. That’s right, it’s not quoted here but his losses amounted to a cool billion out of his 2.5 billion net worth. I’m not crying for him, because he probably is not going to suffer a lifestyle change. It’s just on paper. This is a LOT different then say Jack and Jill down the street who’s household income went from 60k down to 30k. Jack and Jill can’t make their mortgage, get kicked out of their house, kicked out of the lower middle class right into the lower class. Ouch! That’s gotta hurt. Billionaire investors simply lack real world perspective.
http://www.telegraph.co.uk/
“We’ve been worried for a long time there would be nobody to pay on the other side of our contracts, so we took profits early and got out of everything. The Greenspan policies that led to this have been the most irresponsible episode the world has ever seen,” he said.
Fed chairman Ben Bernanke has moved with breathtaking speed to contain the crisis. Last Sunday night, he resorted to the “nuclear option”, invoking a Depression-era clause - Article 13 (3) of the Federal Reserve Act - to be used in “unusual and exigent circumstances”.
The emergency vote by five governors allows the Fed to shoulder $30bn of direct credit risk from the Bear Stearns carcass. By taking this course, the Fed has crossed the Rubicon of central banking.
You wouldn’t know the magnitude of the crisis at hand by reading the nightly news. It’s all a game of confidence management. The government has bailed out an investment bank by taking on risk the market was not willing to take. This means that the investment banks are crucial to the health of the financial system as a whole and cannot be allowed to fail. This means that these banks will be regulated in the future by an act of congress. Money from the government always comes with strings attached.
There will be more talk on how to fix the financial markets, but the reality is that as long as house prices drop in value the problems in the banking world will continue. Everyone knows this and that is why I am expecting a major piece of legislation to be proposed which will attempt to prop up the price of housing. Attempting to prop up the price of real estate won’t work because the government doesn’t have the money to make a large enough difference. For so long, the economics of housing were sustained not by wages and income, but by increases in the value of the house itself. Now that housing is declining, the economics won’t support home purchases until it is again supported by wages and it’s cheap enough to offset the risk of further decline.
On a side note, one of the bloggers I have been reading has been going on about deflation for quite some time. I’m inclined to agree with him now much more so than before.
When it comes down to political protest, there are two ways to get what you want. You can drive over another with a tank or you can lie down in the path of one. The birth of our own country is a great example of violent protest. The independence of India from British rule and the success of the civil rights movement in this country are great examples of non-violent protest. There are no guarantees of success with either approach. Using violence is certainly the more obvious and direct way to get things done, and non-violence seems so much harder and messy. I will say this, it’s hard to demonstrate the fruits of the spirit with a gun in your hand.
love, joy, peace, longsuffering, gentleness, goodness, faith, meekness and temperance.
Just something for thought. I’m far from being an advocate of nonviolent protest, but the moral authority from this approach cannot be denied.
The Supreme Court is getting to make a decision on the right to bear arms. The case revolves around a Washington D.C. ban on guns. The discussion seems to resolve around public safety. What I don’t really understand is the difference between gun, knife, baseball bat, fist, etc violence. Sure, you really can’t do a drive by without guns unless you are a ninja with poisoned throwing stars. If there is a will there is a way. Are you any safer with a knife sticking out of your chest rather than a few holes? You are probably dead either way.
The following is a revised list of the seven deadly sins, written by one of the great men in history.
- politics without principles
- wealth without work
- commerce without morality
- knowledge without character
- pleasure without conscience
- science without morality
- worship without sacrifice.
The seven social sins from the Catholic Church, modernized
- Environmental pollution
- Genetic manipulation
- Accumulating excessive wealth
- Inflicting poverty
- Drug trafficking and consumption
- Morally debatable experiments
- Violation of fundamental rights of human nature
The seven keys for improving your life, via Joel Osteen
- Keep pressing forward.
- Be positive toward yourself.
- Develop better relationships.
- Form better habits.
- Embrace the place where you are.
- Develop your inner life.
- Stay passionate about life.
And here is his mug. For some reason I get a gag reflx when I see his book in the store.
and I am going to name my pets after them. It’s what I should have said; it would have been worth it just to see his reaction.
Tolstoy. Presuming his owner hasn’t found him yet.
I don’t get excited about the C# / Java ideological wars. However, I do prefer to work in Java. The style of documentation for Java is more readable, the IDE’s are more helpful in pointing out your own errors, and the language is named after a daily beverage that is close to my heart. What’s not to like?
Oh yeah, I should get to the point. The Governement likes to use client authenticated SSL sockets all over the place. In a typical SSL transaction, the client decides if it should trust the server. With client authentication, the server must also decide if it trusts the client. This involves both sides exchanging their digital identity and comparing against a list of trusted parties. Things are easy so long as you are a browser visiting websites. Writing low level code to do the same thing is not simple or obvious. It’s hard enough in Java, and actually a bit easier in .NET …. sort of.
With Java you are forced to supply every piece of the puzzle, but it is well documented. The challenge is figuring out the flexible and yet non-obvious API. .NET takes the complete other approach. There is a VERY limited API and even less documentation. I suppose people don’t authenticate clients often in the world of .NET. It’s like a very simple black box with no hints to tell you what you might need to do. In the end, me and 2 other guys spent the better part of the day literally just trying different combinations of things. This strategy does work, it just takes all day. I ended up getting something going, but it was the sheer luck of the irish. Why can’t microsoft just put some danged documentation in their code that mentions HOW. Gaaaaah!
It was a good thing the woodpecker wasn’t around … I might have struck out in anger!