As Gary North points out, Medicare's hospital fund is already bankrupt:
This is taken from a March 25, 2008 press release from the U.S. government's Department of Health and Human Services.How is medicare going to make up the difference? It is going to sell off non-marketable Treasury IOU's back to the Treasury? What is that going to mean? Here is North again:This year the HI Trust Fund will spend more than its income, and from 2009 through 2017, about $342 billion will need to be transferred from the Federal treasury to cover beneficiaries' hospital insurance costs.
The hospital trust fund is the heart of Medicare.
If the trust fund were filled with corporate bonds or bonds issued by foreign governments, the sale of trust fund assets would not have any effect on the Federal deficit. But because the trust fund contains nothing but Treasury IOUs, it will have an effect on the deficit. It will raise it.Like Bernie Madoff's scam, the government's medicare/social security scam is about to be overloaded with money demands. The government won't be able to meet these demands given its current expenditures and income stream. Aside from printing money, the only option the government has is to cut expenditures. Got the picture? So where are they going to cut? The young that they can patch up and put back into the workforce, or those whose working days are over?
This means that funds from general revenues must pay Medicare obligations this year. Problem: General revenues in fiscal 2009 are expected to be $1.8 trillion in the red...Part of that general fund deficit is covered by Social Security revenues (FICA). These revenues are paid into Social Security by employers and employees. Excess revenues after Social Security payouts are transferred to the Treasury in exchange for nonmarketable IOU's from the Treasury.
The increase in the debt for Social Security's trust fund does not appear on the on-budget debt of the U.S. government, i.e., the debt reported by the various government debt clocks. It is off-budget debt. The public is unaware of this.
This cookie jar is expected to be empty in 2017, as the Trustees report. But the recession is creating unemployment. Unemployed people do not pay FICA taxes. So, the 2017 date is optimistic. The cookie jar could be empty as early as 2013, according to Prof. Kent Smetters of the University of Pennsylvania's Wharton School.
Smetters is an expert on the issue of the two programs' trust funds. His 2005 testimony before Congress on the off-budget unfunded liability -- $83 trillion -- is here (pdf).
If you are no longer working, the government considers you a burden. You have already had your "good years". (Translation: "Good years" = Taxpaying years)
Overall, one-fourth (24 percent) of the elderly population reports their health status as fair or poor. Chronic conditions requiring increased contact with the medical care system and ongoing health care costs are more prevalent in the elderly population than in the non-elderly population. Does and overburden govenment that is living off the hope that the Chineese will continue buying its securities really want to deal with all these added expenses of the elderly? That's what they are going to "manage" out.
When you here government managed care, think government decisions on who gets what care and when.
Bottom line: There are two steps that need to be taken, let the young start saving up and buying their own health insurance. Under their own control, they are not going to put their money into nutty programs that kill them off when they get older. For those trapped, Bernie Madoff style, in the current system, well, they stripped Mrs. Madoff of her playthings, including her house, her furs and her jewelry. It's time to follow Ron Paul's advice and strip the government of its playthings, wars here, wars there, outposts here and outposts there and use the money to pay for healthcare for the elderly Americans who built this country, but were conned by their government that now wants to kill them off.