Healthcare spending and Social Security to hit over $3 trillion a year

**Prince** · 02-20-2013, 10:04 AM

Healthcare spending and Social Security to hit over $3 trillion a year

by J. D. Heyes

(NaturalNews) A new report from the non-partisan Congressional Budget Office paints a bleak economic picture for the country in the near-term: Spending on Social Security and government-provided healthcare will consume a staggering $3.2 trillion a year by 2023, or just slightly less than all federal outlays in fiscal year 2012.

The CBO said spending for both line items will double over the next decade, further eroding U.S. fiscal health and endangering the country's future - unless the unlikeliest of events occurs and Congress acts to mitigate the damage.

The congressional researchers did not lay out a plan to fix the long-term imbalance between revenues and spending on retirement and healthcare benefits, but the agency said any action taken sooner rather than later would reduce the impact - if lawmakers could only agree on a course of action.

More government equals higher costs: Why are we surprised?

"Unless the laws governing these programs are changed - or the increased spending is accompanied by corresponding reductions in other spending, sufficiently higher tax revenues, or a combination of the two - debt will rise sharply relative to (the U.S. economy) after 2023," the CBO warned.

This report is just the latest siren bell in the night by the CBO, warning a do-nothing Congress and an obstinate president about the real fiscal cliff that is fast approaching, and it comes as the Legislative and Executive branches dig in for yet another battle over the federal deficit in the months ahead.

"Deciding now what policy changes to make to resolve that long-term imbalance would allow for gradual implementation, which would give households, businesses and state and local governments time to plan and adjust their behavior," said the CBO.

Last June, congressional researchers estimated that federal health programs would swallow more than 25 percent of U.S. gross domestic product (which currently stands at about $15.5 trillion a year) by 2037 if nothing is done to reform benefits.

In fiscal year 2012, total federal spending for Medicare, Medicaid and Social Security was about $1.6 trillion; heathcare spending alone was $885 billion, Reuters reported.

The CBO's estimate, which is based on current law, as well as trends in government collections and outlays, said that by 2023 spending for those three programs alone will surpass $3 trillion; Obamacare will add another $134 billion in costs to provide coverage for about 26 million people who will receive insurance through expensive new state-based "exchanges."

So much for 'cost control'

Expanded healthcare coverage under Obamacare, by the way, is nowhere near the $50-65 billion per year President-elect Obama said it would cost. The CBO says the coverage under the Affordable Care Act will cost more like $1.3 trillion over the next decade. Part of the reason for the higher costs is that more businesses are expected to cut costs by getting rid of employer-based health insurance and forcing workers into the state-sponsored, taxpayer-subsidized exchanges. In August, the CBO estimated that figure to be around four million people but the number rose to about seven million people in this latest report.

Among the CBO's estimates:

-- Medicare, the program for some 50 million older and disabled Americans, will likely remain about three percent of GDP until 2019, then climb a half-percent by 2023, for a total of $1.1 trillion.

-- Medicaid won't grow as fast: It is forecast to be about 2.2 percent of GDP by 2023, when it is expected to cost about $572 billion for some 84 million recipients.

-- Social Security outlays, currently estimated to account for nearly 25 percent of government spending in 2014, are estimated to be about five percent of GDP for most years through 2018, when the outlay will climb to 5.5 percent of GDP in a decade.

**Big Pimpin** · 02-20-2013, 10:56 AM

Time to raise the minimum age to receive SS and Medicare to 70, then quickly phase it out after .gov tells the average idiot there never a guaranteed payout from the SS and Medicare taxes they stole from them.

And with any luck, this will begin the serf revolution.

**LAM** · 02-20-2013, 12:46 PM

Originally Posted by Big Pimpin

after .gov tells the average idiot there never a guaranteed payout from the SS and Medicare taxes they stole from them.

have you ever seen an economic report on this from any independent or government entity? do you know why that is? because it never happened...

Social Security taxes were collected from workers and added up to more than the amount of benefits paid to retirees. This buildup of surplus was intentional, the government wanted to build a reserve that would cover the benefits of the baby boomers. This surplus was invested in special U.S. government bonds that are legally obligated to pay the stated rate of interest, and then repay the principal when they mature, according to the terms of the bonds. then the proceeds (or profits for the sake of simplicity) was spent on other government programs.

learning economics from tv and politicians only guarantees one thing, that you won't know a single thing about it.

**oufinny** · 02-20-2013, 01:59 PM

Originally Posted by LAM

have you ever seen an economic report on this from any independent or government entity? do you know why that is? because it never happened...

Social Security taxes were collected from workers and added up to more than the amount of benefits paid to retirees. This buildup of surplus was intentional, the government wanted to build a reserve that would cover the benefits of the baby boomers. This surplus was invested in special U.S. government bonds that are legally obligated to pay the stated rate of interest, and then repay the principal when they mature, according to the terms of the bonds. then the proceeds (or profits for the sake of simplicity) was spent on other government programs.

learning economics from tv and politicians only guarantees one thing, that you won't know a single thing about it.

This does nothing to explain why the SS fund will become insolvent. I know the reason but you get my point LAM. That is the means to fund it the govt used but it is not an explanation why it is an issue now and will be in the future.

**LAM** · 02-20-2013, 02:52 PM

Originally Posted by oufinny

This does nothing to explain why the SS fund will become insolvent. I know the reason but you get my point LAM. That is the means to fund it the govt used but it is not an explanation why it is an issue now and will be in the future.

because the babyboomers account for roughly 30% of the total US population and workforce and they also held/hold the majority of the high paying "middle-class" jobs (around the 65-70K mark) which are going away and being replaced with low wage jobs in the service sector.

lower paying jobs means less taxes being collected and going into the fund, also with a collapsing economy future payouts on certain bonds, etc. will continue to decrease as inflation continues to increase and the costs of goods and services. SS payments are not indexed for the real rate of inflation either. the COLA is another bullshit measure of inflation just like the CPI and is closer to about 40% of the real inflation rate.

birth rates in the US are at record lows, so there is no big "population boom" like there was post WWII when the babyboomers were born. birthrates are decreasing because the cost of raising children is more than most can afford on the low wages being paid in the service sector.

generally who has the largest family's in the US and most country's in the OECD? those on the lower end of the income and education ladder. which means a surplus of low skilled workers which pushes wages down even further.

it's a numbers game, always has been and always will be.

**Swiper** · 02-20-2013, 02:59 PM

LOL another govt program the govt fucked up.

How about letting people keep their money and save for their own retirement/health care rather than having govt do it? they fuck up everything they get their corrupt hands on.

**LAM** · 02-20-2013, 04:16 PM

Originally Posted by Swiper

How about letting people keep their money and save for their own retirement/health care rather than having govt do it? they fuck up everything they get their corrupt hands on.

see the Great Depression as for how well that antiquated method worked out...

the savings rate and the income quintile is close to

1st - 8%
2nd - 6%
3rd - 2%
4th - .10%
5th - 0.7%

with the majority of US workers in the 3rd to 5th quintiles. and lets not forget the banks are paying less than 1% APR on savings and checking deposit accounts and the real rate of inflation is closer to 4.5% a year. so there is no true interest earned on deposit accounts anymore in the US. rates have steadily declined since the 80's and are at record lows today. banks don't need deposits anymore not when they can "borrow" from the FED at 0%.

so you see in reality "your plan" sucks balls....

**Swiper** · 02-20-2013, 05:18 PM

Originally Posted by LAM

see the Great Depression as for how well that antiquated method worked out...

the savings rate and the income quintile is close to

1st - 8%
2nd - 6%
3rd - 2%
4th - .10%
5th - 0.7%

with the majority of US workers in the 3rd to 5th quintiles. and lets not forget the banks are paying less than 1% APR on savings and checking deposit accounts and the real rate of inflation is closer to 4.5% a year. so there is no true interest earned on deposit accounts anymore in the US. rates have steadily declined since the 80's and are at record lows today. banks don't need deposits anymore not when they can "borrow" from the FED at 0%.

so you see in reality "your plan" sucks balls....

lol your plan is more govt. so you finally admit govt is the solutions to our problems. lmao.

so you think people are stupid and can't save for themselves?

**Prince** · 02-20-2013, 07:04 PM

The main problem in this country is our massive corrupt government, and yes I think most people are stupid, hence the reason they participate in this illusionary democracy that caters to the very wealthy and big corps.

**LAM** · 02-20-2013, 07:20 PM

Originally Posted by Swiper

lol your plan is more govt. so you finally admit govt is the solutions to our problems. lmao.

so you think people are stupid and can't save for themselves?

and I stated that when and were exactly? the answer to that would be never....

you fix what is broken but we all know that doesn't happen in the US. but your idiotic "anti-government" rhetoric doesn't hold any water because if it was simply a function of government then ALL governments would function like it does in the US, but they don't...because lobbying isn't allowed anywhere in the world like it is in the U.S

save themselves, hugh..., more conservative "rugged individualism" bullshit that you gobble up with both hands as it's shoved down your throat my millionaire politicians in government....

I got some Enron stock to sell you kid wanna buy it?

**LAM** · 02-20-2013, 07:38 PM

Originally Posted by Swiper

lol your plan is more govt. so you finally admit govt is the solutions to our problems. lmao.

big government is required to allow the formation of large firms and powerful MNE's. it's why the US has the most in the world and it's why they are no "small government" country's with large firms...

but since you have zero comprehension of how econ works in the real world, you wouldn't know this, recognize it or understand how this comes to be.

**Swiper** · 02-20-2013, 07:46 PM

Originally Posted by LAM

and I stated that when and were exactly? the answer to that would be never....

you fix what is broken but we all know that doesn't happen in the US. but your idiotic "anti-government" rhetoric doesn't hold any water because if it was simply a function of government then ALL governments would function like it does in the US, but they don't...because lobbying isn't allowed anywhere in the world like it is in the U.S

save themselves, hugh..., more conservative "rugged individualism" bullshit that you gobble up with both hands as it's shoved down your throat my millionaire politicians in government....

I got some Enron stock to sell you kid wanna buy it?

who are you calling kid, chump?

you think govt is the answer to all what is wrong with it. people like you are the reason why so many people are dependent on govt. you think it's helping people when it does the opposite. you're too stupid to understand that. you're a lost cause. move along.....

**Big Smoothy** · 02-20-2013, 08:40 PM

Originally Posted by LAM

This surplus was invested in special U.S. government bonds that are legally obligated to pay the stated rate of interest, and then repay the principal when they mature, according to the terms of the bonds. then the proceeds (or profits for the sake of simplicity) was spent on other government programs.

Indeed.

A shell game.

Medicare will be an even larger share of GDP.

To repeat what one knowledgeable poster who works in the financial field wrote:

The US can do 3 things.

1. Impose austerity measure (massive cuts), 2. Default or 3. print more money.

He think the govt. will print more money.

Either way, the US is headed for tough times.

I am 43. By law we have to pay into SS.

I am glad I have not paid or filed taxes in 11 or 12 years.

**HFO3** · 02-20-2013, 09:56 PM

damn, your either brave or unemployed? not paying taxes for 11-12 years, why?

**Zaphod** · 02-20-2013, 11:06 PM

Social Security isn't even part of the federal budget. Social Security History

It has it's own independent source of dedicated revenue with surpluses going to buy US bonds which get cashed in to cover any shortages.

The problem today is that there is so much disinformation being put out there it takes some actual effort to get to the truth. That's what the government is counting on. You being too lazy to get to the truth.

**LAM** · 02-20-2013, 11:50 PM

Originally Posted by Zaphod

The problem today is that there is so much disinformation being put out there it takes some actual effort to get to the truth. That's what the government is counting on. You being too lazy to get to the truth.

yep...and when it comes to optional reading that takes any effort, the US is a lazy bunch. much easier to listen to the pundits and politicians on the idiot box so they can tell you how to think and what to believe.

**Big Smoothy** · 02-21-2013, 07:09 AM

Originally Posted by HFO3

damn, your either brave or unemployed? not paying taxes for 11-12 years, why?

I live in Asia.

Don't have to file if you're income is below a certain, very low amount.

**Big Smoothy** · 02-21-2013, 07:11 AM

Originally Posted by Zaphod

Social Security isn't even part of the federal budget. Social Security History

It has it's own independent source of dedicated revenue with surpluses going to buy US bonds which get cashed in to cover any shortages.

That is....*cough* was....the Social Security Trust Fund, correct?

Most/all of that money was spend on other things.

Last year, SS paid out more than it took in, 27 years a head of schedule.

**LAM** · 02-21-2013, 07:52 AM

Originally Posted by Big Smoothy

That is....*cough* was....the Social Security Trust Fund, correct?

Most/all of that money was spend on other things.

Last year, SS paid out more than it took in, 27 years a head of schedule.

the only thing that was spent was the interest earned on the bonds that were purchased with monies provided by the fund, this was by design and always the plan. it was not "raided" like the right wing politicians on tv love to say like M. Bachman and the rest of the mental midgets of the radical right. they know how to get their constituents fired up and they know none of them understand any of this stuff.

one could almost say that the boomers intentionally fucked those who would be exiting the workforce after them or at the minimum they don't really care what happens as they will be dead.

**Big Smoothy** · 02-21-2013, 12:16 PM

Originally Posted by LAM

the only thing that was spent was the interest earned on the bonds that were purchased with monies provided by the fund, this was by design and always the plan. it was not "raided" like the right wing politicians on tv love to say like M. Bachman and the rest of the mental midgets of the radical right. they know how to get their constituents fired up and they know none of them understand any of this stuff.

one could almost say that the boomers intentionally fucked those who would be exiting the workforce after them or at the minimum they don't really care what happens as they will be dead.

Thanks for the info on the interest, LAM.

I never thought of/cared about/focused on the "raided" aspect.

But being the interest was spent, SS still paid out more than it took in 27 years ahead of schedule.

I have 24 years to go to collect as I'll 67 when I qualify for the first take. Correct? I'm 43. I paid in for 12-14 years, took a break and will be back in the US within the US to work.

**Swiper** · 02-21-2013, 05:58 PM

most likely theres not going to be anything there for you to collect in 24 years. don't count on it. I sure don't. And if there is its not going to be much as the dollar will be worth next to nothing.

**Big Smoothy** · 02-21-2013, 08:40 PM

Originally Posted by Swiper

most likely theres not going to be anything there for you to collect in 24 years. don't count on it. I sure don't. And if there is its not going to be much as the dollar will be worth next to nothing.

I will have to pay into it as I'll be returning to the US for a spell soon, but if there is anything when I'm 67 (if that age of eligibility is not raised by then) I will consider it candy or beer money. Or, I suppose at that age, tea money.

**Zaphod** · 02-22-2013, 08:20 AM

Originally Posted by Big Smoothy

That is....*cough* was....the Social Security Trust Fund, correct?

Most/all of that money was spend on other things.

Last year, SS paid out more than it took in, 27 years a head of schedule.

And much of that trust fund is in the form of US treasury bonds. Which, when cashed in, must be paid out to social security at face value plus the interest. There is plenty of money. The only ones that want to do away with social security are the ones disseminating false information about it because they want to grab the money in it. The trust fund is for exactly that, when social security must pay out more than it takes in. 27 years early? No big deal. There's been nearly 80 years of surplus going into the trust and the 27 year difference prediction for a shortage didn't take every economic eventuality into account. Baby boomers won't live forever.

**Big Smoothy** · 02-22-2013, 10:02 AM

Originally Posted by Zaphod

And much of that trust fund is in the form of US treasury bonds. Which, when cashed in, must be paid out to social security at face value plus the interest. There is plenty of money. The only ones that want to do away with social security are the ones disseminating false information about it because they want to grab the money in it. The trust fund is for exactly that, when social security must pay out more than it takes in. 27 years early? No big deal. There's been nearly 80 years of surplus going into the trust and the 27 year difference prediction for a shortage didn't take every economic eventuality into account. Baby boomers won't live forever.

Zaphod,

I do not know anyone who wants to do away with social security. That is not even realistic.

As for your "then" to "now" comparisons of surpluses.....

That was then; this is now.

So, you think David Walker is lying?

SS is not solid and it's not gauranteed in 24 years.

**LAM** · 02-22-2013, 05:00 PM

Originally Posted by Zaphod

And much of that trust fund is in the form of US treasury bonds. Which, when cashed in, must be paid out to social security at face value plus the interest. There is plenty of money. The only ones that want to do away with social security are the ones disseminating false information about it because they want to grab the money in it.

and instead of bonds "they" want to privatize it so those monies can be used in the bogus Wallstreet casino and disappear (via wealth transfers) during another manufactured bubble/burst cycle just like with the US housing market.

**Swiper** · 02-22-2013, 08:36 PM

nothing but a Ponzi scheme. if a company ran SS like the govt does, they'd be arrested and thrown in prison for 150 years. govt lies cheats and steals. the sad part is the people are too stupid to realize it. what a shame....

**LAM** · 02-22-2013, 10:02 PM

Originally Posted by Swiper

govt lies cheats and steals. the sad part is the people are too stupid to realize it. what a shame....

a government that is of the 1% and only serves the 1%.

**Zaphod** · 02-22-2013, 10:26 PM

Originally Posted by Swiper

nothing but a Ponzi scheme. if a company ran SS like the govt does, they'd be arrested and thrown in prison for 150 years. govt lies cheats and steals. the sad part is the people are too stupid to realize it. what a shame....

No, nothing would happen to them. You remember the financial meltdown? It was pretty recent.

**LAM** · 02-23-2013, 12:51 AM

Originally Posted by Zaphod

No, nothing would happen to them. You remember the financial meltdown? It was pretty recent.

Swiper is an ideologue, he refuses to acknowledge that large firms and capital control the US fed government and dictate all the major policy enacted. large firms and special interest groups only spend billions of dollars a year and groups like ALEC atually write the policy and hand it over to the legislators. apparently none of this matters in his world.

**Big Smoothy** · 02-23-2013, 07:14 AM

Originally Posted by LAM

and instead of bonds "they" want to privatize it so those monies can be used in the bogus Wallstreet casino and disappear (via wealth transfers) during another manufactured bubble/burst cycle just like with the US housing market.

The privatization was 3% or so.

I was never for it. (See Chile as an example.)

Privatization was never going to happen and it will not happen.

And I agree with LAM - that would be awful.

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