Tuesday, April 12, 2011

On 'Dependency' Whiners & Preserving Medicare


One thing I can't abide is a guy that's got his, nicely ensconced and worth millions, and then he bellyaches about the less well off being "dependent" - specifically on the government. And so, in his latest anti-American people rant, elitist columnist for the WaPo Robert Samuelson sounds off as he complains about how so many Americans (46.2%) are dependent on government and don't even realize it. Those he sets up for scrutiny include (by the numbers):

- Dependent on Social Security: 46.5 million

- on Medicare: 42.6 million

-on Medicaid: 42.4 million

-on food stamps: 36.1 million

-on Veterans Benefits: 3.2 million

All told, at least 46.2 % of the American population dependent on at least one government benefit. This, Samuelson declares, "shows the incredible extent of their dependency".

So what the hell does he expect? Does he believe all those people consciously chose dependency? Does he think or believe that they're all like him, who get to write a column three times a week for over a quarter million bucks a year? And have so much disposable income that he can afford to lose 20% or so in a market correction?

To hear blabberers like Samuelson, who's forever going off on "entitlements" and "dependency", you'd think the whole frickin' country was overwhelmed by bums and deadbeats whose only talent is seeking government handouts. Never does it occur to this dingbat the reason could well be a systemic failure of the economic system itself, which actually regards unemployment and under employment as a "cost benefit" (as per one Alan Greenspan speech ca. 1997) which helps to keep the inflation rate down (every 1.3 million out of work keep it down by 1% since they can't spend and drive it up). Thus, inefficiency is built into the system.

Don't believe me? Look at the recent stat cited by The Financial Times observing that as of last week the 'productive capacity" of the country was down to 64.2 %. This means that at any one time, only 64.2 % of the working age population were actually working either full time or part time. So what about the other 36.8%? Well, you might start by asking one of the 300-odd FORTUNE companies that either downsized them in order to squeeze more work from fewer people, or who shipped their jobs off to Bangladesh or Beijing. Or you might ask one of the millions fired from their job because they had to stay home to take care of a seriously ill or incapacitated loved one. The reasons are endless.

But basically, in a nutshell, the rapacious capitalist economy has no room for compassion, heart or humanity. It is a machine predicated and crafted on brutal efficiency and if certain human elements don't quite fit in, they are discarded like yesterday's fishwrap. They certainly aren't assisted or integrated into alternatives as in European Socialist systems.

And while we're at it, WHY is Samuelson so selective in his dependency scolding? How about sparing some of that invective for the rich bastards that will get another $140 billion over the next 2 years in extended Bush tax cuts, and the defense establishment which now spends 58 cents of every dollar on weapons and other toys. Last year, the U.S. squandered $698 billion on weapons and arms alone, or more than six times more than second ranked China ($113b)! What's wrong with this picture?

Samuelson goes on to claim that we "deploy government casually to satisfy any mass desire, correct any perceived social shortcoming or remedy any market deficiency" but this is arrant twaddle. A family for which food stamps stands between them and starvation, certainly isn't about satisfying a "craving" but survival! A guy who through no fault of his own has been out of a job over two years and finally gives up and applies for Social Security disability certainly can't be faulted for dodging a market "deficiency" - when that market regards him as redundant by the age of 55 (according to a FORTUNE 500 white paper released in 1996).

But this is what we can expect from pundit elitists who don't have to worry about standing in a food stamps line, far less losing all or most of their 401 k. Hell, good ol' Samuelson probably can afford to invest in ETFs, as well as hedge funds and laugh all the way to the bank. As he laughs at all those who are "dependent" in one manner or other, through no fault of their own.

On a related matter, regarding what he considers a huge "dependency" - that of Medicare, let us hope President Obama carefully thinks through any plans for Medicare changes, before his speech tomorrow night. One thing he must not do is play into the vicious hands of the austerity hawks like Samuelson, or Teepee-driven scolds like Boehner, McConnell or any of the tea baggers. There are actually ways to mend Medicare's finances without destroying it for those who need it, and for whom Paul Ryan's plan would mean the end of the line, literally.

Consider the following simple strategies:

1) Allow Medicare to bargain for the lowest cost prescription drugs like the VA does. This would solve the huge problem of exploding drug costs at one time. Given these costs are rising by 9-14% a year they represent a huge drain on the national budget. By putting Medicare and the VA bargaining in the same class, I estimate that up to $50 billion a year can be saved. Much of this could be enabled simply by switching the Medicare options to generics. For example, substituting lovostatin for regular commercial statins like Zocor.

2) Eliminate finally all the Medicare Advantage plans! This in fact was one of Obama's early targets in the health reform wars, and he needs to come back to it. These plans were inserted into the parlous 2003 Medicare Prescription Drug law as a means to bleed standard Medicare down, and they have. They consume nearly $12 billion more per year (according to the Government Accounting Office) than standard Medicare, and those costs have directly pushed the program closer to insolvency. Worse, those receiving only the standard benefit have been forced to pay higher premiums to support those on the Advantage plans. Eliminating them would save $120- 140 billion over the next 10 years.

3) Reinstate the FICA tax (eliminated for two years as a result of the December Bush tax cut extension agreement) and when resumed, increase them to at least 8.4% to make up for the two years of lost revenue (which funds both Social security and Medicare). After two or three years, the regular 6.2% rate can be resumed.

4) Consider seriously raising the FICA limits for higher incomes levels, at least to $250,000 to help pay for both Social Security and Medicare shortfalls. People at the upper end need to bear in mind they're part of this country too and need to help out. Remind them of John F. Kennedy's famous quote: "If a nation cannot save the many who are poor, it will not be able to save the few who are rich"

5) You must not, NOT allow the Bush tax cuts to be extended again next year no matter how much political pressure the Rs exert, and we know they will exert a lot. As it is, the giveaway in December added nearly $900 billion to the deficit that could have been totally avoided - i.e. by allowing both the middle class and higher income Bush tax cuts to finally expire.

Instead of using tax cuts as an easy sop, like the Repukes do, explain to middle class voters why eliminating them actually redounds to their long term interests, because those monies saved will help to stabilize and assure their benefits programs, in Medicare and Social Security. Explain using simple math how obtaining those later benefits in old age is far superior to receiving barely $500 a year now in tax cuts. Thus, trying to duplicate the Medicare benefit on one's own would cost nearly $180,000 assuming one could find a provider. The measly $500/year tax benefit would come to barely $25,000 after FIFTY years!

The preceding shows there's no need for any draconian devices.I would include in that the Simpson-Bowles recommendation to raise Medicare deductibles and co-payments. Already, the costs of Medicare to be covered by individuals are frightfully high (in my case over $3,000 a year) and we don't need them any higher. Rather than accept this, please think of using one of the steps listed above.

I wish Mr. Obama good luck in his speech, and trust that whatever he finally comes up with it will be the right thing, and certainly better than Paul 'Scrooge' Ryan's laughable idiocy.

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