This graph appeared in the print edition of the Sunday NYTimes. Analysis of the graph reveals a dip in revenue that exactly coincides (time wise) with a spike in spending.
Its creators employ a clever distortion relating to the current deficit situation. They put the 'entitlement spending' at the top of the graph, in order to illustrate that the magnitude of entitlement spending happens to correspond in magnitude to the deficit. This suggests that in order to eliminate the deficit, one should focus on Social Security, Medicare and Medicaid.
The truth is, it is the spike in the graph of 'other spending' around 2007-08 which pushes the Social Security, Medicare and Medicaid lines up, correspondingly, over the revenue line. Inverting the graph, (placing Health & Social Security spending at the bottom), would be far less disingenuous.
While the deficit could surely be offset by the elimination of Social Security, Medicare and Medicaid spending - it is wrong to conclude that such spending is the actual cause of the deficit.
In pondering health care reform, consideration of deficits should be directed to their cause, not merely at an easy target.
One proposed Senate bill proposes an expansion of government bureaucracy. The House proposes a similar expansion. This will undoubtedly adversely affect spending efficiencies.
ReplyDeletePoint - Counterpoint.
ReplyDeleteOK, oversimplified but entertaining.
entertaining for sure! but both point and counterpoint represent distortions - for example:
ReplyDelete1) fire insurance can be purchased at 'replacement value', while health insurance is lately limited to a dollar amount (because insuring one's health can be quite open ended)
2) insurance company investors seem to have a no-lose proposition in that their rates (and thus their returns) are set by regulators, not just the market
3) the post office provides more kinds of services to the public than does the private package delivery services - a suite of services that is determined by a public purpose, not profitability. i'm not sure the characterization 'bankrupt' is relevant to their operations.
4) etc....
Well ... the Post Office is considering decreasing hours, limiting services, etc. No matter what you call it, the USPS hasn't been fiscally sound for awhile.
ReplyDeleteAlso, since January 2008, United Healthcare investors haven't exactly been prospering. (Although the chart now looks promising.)
Besides, were there a government plan, whom do you think would administer such a plan?
As for Social Security, the scandal that is the history of this program is that the federal government from the beginning looked at the tax revenue stream as it's piggy bank to use for other programs, thus setting up the classic Ponzi scheme. Then, they decided that social security benefits were income and thus taxable, notwithstanding that these funds were the result of a previous double tax. Now, the end of the Ponzi scheme in sight, they announce no more cost of living increment for seniors who paid with their own sweat into this "fund." Ugh ...
ReplyDelete