Random thoughts...

Wednesday, February 20, 2008

Currently, medical spending accounts for about 16% of the GDP of the United States. That is a big number and it's getting bigger. The cost of healthcare is rising at about 7.7% per year or about double the rate of inflation. This rapid rise in costs is one of the main reasons given for the need in 'universal' care.

In the latest government budget the US government is currently occupying about 19.5% of US GDP. If Hillary and Obama get their wish and we somehow end up with 'universal' medical care AND they can keep costs at the same level, the US government will account for more than 35% of all the spending in the US! Guess what? There is no chance in hell that they can do it cheaper. How could they possibly make it more expensive? Because the rate of inflation in government is MONUMENTALLY higher than that in the private sector.

Here are some figures from an article by Doug Bandow:

"In 1967 the House Ways and Means Committee predicted that Medicare would cost $12 billion in 1990, a staggering $95 billion underestimate. Medicare first exceeded $12 billion in 1975. In 1965 federal actuaries figured the Medicare hospital program would end up running $9 billion in 1990. The cost was more than $66 billion."

"In 1987 Congress estimated that the Medicaid Special Hospitals Subsidy would hit $100 million in 1992. The actual bill came to $11 billion."

"The Congressional Budget Office doubled the estimated cost of Medicare's catastrophic insurance benefit — subsequently repealed — from $5.7 billion to $11.8 billion annually within the first year of its passage. The agency increased the projected cost of the skilled nursing benefit an astonishing sevenfold over roughly the same time frame, from $2.1 billion to $13.5 billion."

"In 1935 a naive Congress predicted $3.5 billion in Social Security outlays in 1980, one-thirtieth the actual level of $105 billion."

Before any of you number crunchers and government apologists get your panties in a bunch, I fully realize that the massive increases in spending have come with massive increases in the scope of the programs...but that is sort of my point. IT ALMOST NEVER STOPS. There is always a new program to add or a new group that needs something.

People often misunderstand my comments like these. They often assume that I don't care about the poor or elderly or that I am so pro-business, pro-capitalist, profit-oriented that I don't care about anything else. I do care and I do realize that there are problems, but what I also realize is that 99.999% of the time a government cure is WORSE than the original problem.