Tuesday, January 31, 2012

“The Road to Hell is Paved with Good Intentions”

Everyone who is a conservative at heart is faced with an enormous dilemma when it comes to the question of Medicare.  Putting aside, just for a moment, the fatal flaws of the program, it is a socialistic scheme that does not meet with the intent of the Constitution and the founders’ framework for a limited federal government.  On the other hand, Medicare is now ingrained into the nation’s mindset as an entitlement that is no longer to be questioned, as the Left knew it would be when they sent us down this road.  People like my parents have come to depend on it.  Consequently conservative politicians are in a no-win situation on this topic.  They cannot propose scrapping the program and still remain viable candidates, and yet to propose ways of “saving” Medicare – at least to my way of thinking – is contrary to conservative ideology.  It seems conservative voters have little choice but to accept a candidate who, by standing up for Medicare, promises not only to continue but to further enshrine the systems we oppose and which are guaranteed to contribute to our eventual failure as a nation.

For this reason I’ve given a lot of thought as to how we could have it both ways – save Medicare but do it in a way that requires the application of conservative principals such as personal responsibility.  I have concluded, upon deep reflection, that it cannot be done. The Medicare system is too deeply and inherently flawed to save it at all, never mind do so in a way that satisfies a conservative like me.  Consequently we need a candidate who is brave enough to do the unthinkable and propose ending it.  We won’t get one, of course, but as long as I’m dreaming here’s what I think that candidate should say:

Imagine if I gave a stranger a credit card with no spending limit and then I arranged for the bill to go to you.  What do you think might happen?  Do you think the stranger would be a wise and careful consumer with your hard-earned money like you are?  Would he make tough choices and show concern for your financial security?  Or do you think he might forget about that and spend without regard to the way it affects you?  If you can understand what could go wrong with this arrangement, then you should understand the inherent flaw of the Medicare system.

Under Medicare the consumer has little to no natural incentive to restrict or curtail consumption.  The predictable result is an unnaturally high demand for healthcare services, which in turn leads to shortages and/or skyrocketing healthcare costs, as we’ve all witnessed in the past several decades.  Next, well-intentioned politicians with no understanding of economics will step in and further exacerbate the problem by placing artificial controls on the prices of Medicare services, which further limits availability and drives prices higher yet for everyone else.  We then have what is commonly referred to as “a mess.”

At its start, in 1966, Medicare cost $3 billion, ..."The House Ways and Means Committee estimated that Medicare would cost only about $12 billion by 1990 (a figure that included an allowance for inflation). This was supposedly a 'conservative' estimate. But in 1990 Medicare actually cost $107 billion."’ In 2011 that amount rose to $485 billion, and by 2021 it is forecast to be nearly $821 billion. 2     Do you think maybe the politicians don’t know what they’re doing here?

Medicare spending has grown at a much faster rate than our gross domestic product and every year it consumes a larger and larger share of our national budget.  “...CBO’s projections suggest that in the absence of changes in federal law... Federal spending on Medicare (net of beneficiaries’ premiums) and Medicaid would rise from 4 percent of GDP in 2007 to 7 percent in 2025, 12 percent in 2050, and 19 percent in 2082.3

Most Americans recognize that we are already in dire financial straits even as I speak.  How can anyone believe that we can continue on this road any longer? 

For some, the concept of healthcare as a limited commodity is uncomfortable to accept, but that is the reality.  Healthcare in and of itself is not a constitutionally guaranteed right.  How can it be when such a guarantee would require that others be indentured to that obligation?  Healthcare is ultimately the product of the labor of other people.  We become dangerous to our fellow man when we presume the right to that labor, or the right to the labor of younger generations who must bear the cost.  So to those who claim Medicare is a moral issue, I say, “Yes it is.” It is immoral for people to use the power of the state to force others to pay for their healthcare without limitation. 

But all of this does not mean that people must forego good quality healthcare once they retire, as certain folks would like us to believe.  Our undue reliance on government to solve these problems has severely damaged the free market process, but it can be restored because all of the necessary elements remain in place.  We have willing suppliers ready to provide a market for willing consumers.  We must begin by getting the federal government out of the healthcare business, which brings me to the subject of Medicaid. 

By now the story should ring familiar.  When started in 1966 Medicaid initially covered 4 million people at a cost of about $1 billion.  Today, Medicaid.gov (“Keeping America Healthy!”) proudly informs us that “Medicaid and CHIP provides health coverage to nearly 60 million Americans.”4   The cost? Well it was nearly $400 billion in 2011 excluding administrative costs.5    This is what happens when the decisions about spending are taken out of the hands of local communities and placed far away in the hands of bureaucrats.

Government run health programs don’t fix our healthcare problems they multiply them.  They remove free market conditions that are necessary for the system to work, and they invite massive fraud, allowing dishonest people to get rich at taxpayer expense and away from taxpayer control.   Someone once said, "The road to hell is paved with good intentions."  It's time for us to take heed of that advice and get off this road we're on.


  1. What a magnificent post CW. Great job with the research and facts. Unfortunately, your conclusion is probably the correct one - nothing can really be done to correct the huge failure of medicare - other than increasing the retirement age - maybe.

    I do believe that, as you point out, people are irresponsible with other people's money. Hence, if people have to pay premiums based on how healthy they are can maybe change that. It happened at some companies (Safeway) to curb healthcare costs. People should pay more if the illness is self inflicted (may be hard to prove - i.e. I have high cholesterol even though I am in shape).

    What a mess!

    1. Thank you, Patrick. Yes indeed – it’s a mess.

  2. You wrote, "Do you think maybe the politicians don’t know what they’re doing here?" Nope, they know exactly what they are doing ... buying votes while simultaneously suppressing liberty.

    I will be back to comment again, time right now is limited but wanted to note the above.

    Great post, CW!

  3. Ok, I'm back (I see you cringing - hehe). Here's what I don't get and maybe you can help me out here - if we want to eliminate a program like this, why isn't it being done? What is the problem? If instituted it can be un-instituted can it not? I simply don't see the problem.

    Don't misunderstand, this can't be done with a wave of a magic wand. But it can be done over a generation or so, can it not? I realize the rug should not just be pulled out from underneath people. I'm not heartless.

    Help help help. I just don't see the problem with getting the national government back to its root functions.

    1. “...if we want to eliminate a program like this, why isn't it being done?”

      Who is “we?” You and me and a small fraction of the nation? Ask the average person on the street if they want to scrap Social Security or Medicare and they will say, “No.” That’s why none of the candidates are suggesting undoing Medicare or anything even close to that (with the exception, perhaps, of Ron Paul and look where that’s gotten him).

      But what about the Constitution? What about our rights?

      Such questions are why I wrote “What Makes a Right a Right?” When the majority of the populace no longer agrees about what your rights are, and when this includes the very people who are supposedly elected to enforce those rights, all bets are off. It is essentially us against the mob.

      The only way this is going to change is if someone can persuade the mob to see why it’s wrong or why it’s ultimately not in their interests or the interests of their children to keep going down this road. That’s why I suggested the speech I wrote explaining it in the most basic way possible and reassuring people that their needs can still be met.

      The only other alternative I see is for mass action on our side. If everyone were to cease working for period of time and starve the gov’t (and the mob) of the taxes they need, we might finally get their attention. But this would be next to impossible to arrange.

    2. FYI:

      “Entitlement Cuts Opposed By Americans, Poll Finds”

      “Poll: Taxing the rich favored over Medicare cuts”

      “Poll: 70 Percent of "Tea Party Supporters" Oppose Medicare Cuts”

      “Poll: Most Americans say Medicare is worth the cost”

      That's what we're up against.

    3. And all that you have cited is the reason it will take at least one generation to make changes. And it should, IMO. This just isn't all that difficult.

      Your speech recco is great, CW. Too bad no one will deliver such.

      So my conclusion is ... a politician is worthless with respect to changing things. And we appear powerless to change things. What's left. Oh, I got it - the States. And IMHO that's where it has to start. Not nationally, but in each State.

      Say, maybe I will send your speech to my newly elected VA Delegate and VA Senator. They are a couple of conservatives. Trust you don't mind.

      As for your final recco (cease working for a time) ... here's an alternative thought - no one drives any where for any reason (save an emergency) for 48 hours. One full weekend. That would put a crimp in the tax base. And if that didn't get any reaction, do it again.

    4. You may be on to something, Mrs. AL. I’m a great believer in returning power to the states but even there it’s a question of what people are willing to do. How do you envision using the state to make these changes? How does it start?

    5. Well I am going to start by sending your recommended speech as I indicated (with your permission). Only Q is, do you want me to reference your blog or give them your email address? Up to you.

      My entire focus right now is encouraging my State officials to take action. Unfortunately, it is an uphill battle given that the States have been so suppressed for so long. But it needs to happen, IMHO (I can be really wrong about this).

    6. I don’t think you’re wrong, Mrs. AL. You can send my email address. Thanks for passing it on!

    7. BTW ... if you haven't had the opportunity and have the time, check out Hardnox's most recent. It's a doozie.

      Will compose info for State electededs this date. Will let it sit for a short time and revisit. Will let you know any reaction if you don't hear from them directly.

    8. Mrs. AL, thanks for the plug.

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  5. CW,

    Good post - we are up the proverbial creek without benefit of paddles. I have thought of a variety of plans - but they depend on personal responsibility and political courage. Ain't happening right? Right.

    We could and should shrink Medicaid by tightening up on qualifications, but we probably need to have some (much diminished) safety net. The hue and cry would be deafening from the left (liberals, democrats, progressives, socialists, whatever) complete with more Republicans pushing wheelchair-bound grannies over cliffs.

    I think that the only way may be for the younger generations to rise up and refuse to play this stupid game.

    1. Thanks, CS.

      If only people could stop the automatic deductions to their pay and refuse to pay taxes. That would put a crimp in the federal gov’t!

  6. CW,
    Good post and spot on. The problem started when State's Rights took a back seat. The States rolled over for big government when presented with the carrots. They never saw the big stick.

  7. Thank you, Hardnox!

    I think we're all in agreement. The states need to get back the control they were intended to have.

  8. A conservative-dominated congress with the necessary nads would pass the following:

    Citizens of the United States as of January 1, 2014 and age 60 or above as of that same date shall receive Medicare Part A for the remainder of their lives. Additionally, they shall receive $2,400 per annum in twelve monthly installments to spend as they wish. There will no longer be Medicare Parts B and D.

    Citizens of the United States as of January 1, 2014 and age 55 or above, but less than 60 shall receive receive Medicare Part A less a 50% co-pay and $1,200 per annum in twelve monthly installments to spend as they wish.

    Medicaid and SCHIP will end January 1, 2014 as will Medicare for anyone under the age of 55.

    Payroll taxes for Medicare shall cease effective the date this bill becomes law with the President's signing.

    1. Hey there, drpete -

      I think any phase out plan should be done in conjunction with reversing legislation that serves to limit competition among health insurance companies or that otherwise serves to keep healthcare costs unnaturally high. They need to fix the tort laws as well.

      I would also add one thing to your list which is that anyone under 55 should receive back all of the money they’ve paid in Medicare taxes up to that time, plus interest. This could be done as a tax offset over a period of time or by whatever means is the least disturbing to the federal budget, but it must be done.

      No matter how it’s ultimately done, the phasing out of Medicare should expose how ironically and inherently unfair are these programs designed by the party that’s supposedly obsessed with fairness. One day could be all that separates someone who gets to enjoy the promised benefits of Medicare from someone who’s told that he doesn’t qualify for full benefits because he’s only 59 or 54. Life doesn’t get much more unfair than that, and it was all gov’t imposed at the behest of the Left.

  9. In 1935 the Supreme Court held in Perry v. United States that -- among other things -- Social Security was NOT a contract. Congress can repeal SS with no obligation to contributors anytime it wishes. The hold in Perry would likewise apply forward to Medicare. Thus, the United States has zero obligation to pay back anything.

    What progressivism has done via government cannot be made right, CW. A newborn today gets a slap on the backside and a bill for $60,000 to pay off the nation's debt.

    To pay back said debt, she will forego new clothes, braces, camps and vacations, a prom dress, a car, and much much more. Business will, therefore, not produce those things. There will be severe recession. Just a matter of when.

    Certainly a pantload of laws and regulations must also be repealed. Indeed, the national government must shrink by 80%.

    1. It may be legally possible, drpete, but it’s morally wrong and I doubt that people who’ve been paying in for 10, 20 or 30 years are going to stand for being told that they get nothing out of this deal. I suspect most of them would fight tooth and nail to keep Medicare going if the alternative is that they end up with zero. No conservative who proposed such a plan would have any hope of getting elected.

  10. CW and DrPete ... have read your comments back and forth with keen interest. Thanx for dealing with this. Seems to me no matter what is done when, someone/group is going to get the fuzzy end of the sucker. And though that is indeed a bite in the shorts, I don't know how it can be avoided if these programs are to be eliminated, even over time.

    1. Hi Mrs. AL:

      I guess we have to decide if we’re discussing real solutions (albeit with the slimmest chance of ever becoming reality) or if we’re content to merely fantasize and keep going the way we’ve been going.

      The poll info I linked to above shows that there is little interest in dissolving Medicare, even among the Tea Party. That’s AFTER people have been inundated with reports of the program’s massive cost overruns and inevitable collapse somewhere down the road. Do you believe people who’ve paid in thousands of dollars over 10, 20 & 30 years and who seem to still believe in the program are going to sit back idly and watch it get cancelled when they stand to lose everything they’ve put in? And yet their votes would be ESSENTIAL to electing conservatives willing to phase out Medicare.

      People could be re-paid over the number of years remaining until they reach 65 (so we’re talking over periods of 10-40 years). That cost could be offset by the savings on Medicare and Medicaid and any other of hundreds of programs that a truly conservative congress and president could eliminate. The budget would still probably be far better off in the long run (and perhaps even in the short run), and as I said before, giving people back what they’ve paid in is the only moral thing to do.

    2. What we have are entire generations who have been sold a bill of goods over time. No one wants to "give up" anything. No one wants to sacrifice. No one wants to do the hard thing. As long as I can continue in relative comfort, who cares seems to be the attitude. This isn't unusual or unexpected. What am I willing to give up? What are you willing to give up?

      These are hard and exceedingly personal issues, CW. Me, golly I don't want to give up anything. Don't think I should have to. That said, I had a routine appointment with my FP/GP shortly after Obamacare was passed. What troubled me most was having my paper records put onto computer and thus able to be accessed so readily. Violent invasion of privacy from my POV. So I asked my Dr. person what happens if I go off the medication I am on (still only on one at my age and I am blessed). He gave me the scoop. If things get too bad, I will stop seeing any doctor for any reason and I know the consequences. May not be pretty but that's where I net out.

      Sorry to babble again.

    3. This comment has been removed by a blog administrator.

  11. Analysis, CW, would suggest that you and your husband person would come out near-even if you stopped paying into Social Security and Medicare today, and managed your own retirement and future medical needs yourselves. Breakeven was somewhere between age 45 and 46, that depending on whether eligibility age were increased again.

    I also question your moral argument. The government has no money it doesn't take from people in the private sector. To pay back people under 55 for what they "contributed" over the years would mean taking first from others. The only possibles would be today's and tomorrow's children. Moral?

    1. Drpete –

      Please pardon me for being a sourpuss about it by I am hardly consoled by knowing that if the system had ended 5 years ago we would come out even. If the system had never been started, we would have that plus the thirty years of contributions we’ve made.

      Because of it's design I would say that the system has been immoral in one respect or another for everyone involved.

  12. "the Road We're Traveling" (Stuart Chase) is one of power, control, and money. It is not one that thinks well of humanity. Greed comes to mind.

  13. CW, here's the URL for the video you posted at my place:


    Now, it should post as the video, not just the link.

  14. Okay, I see it didn't; must be a blogspot thing. Another way is to do the right-click thing, then "copy embed html". Let's see if that works:

    1. Nope; that didn't work, either. I'm going to just post exactly what you did at my blog, which is this, without the quotation marks: "http://www.youtube.com/watch?v=ZMs87s-YL6k". Let's see what happens:


    2. Nope!

      Well, I'm sure there must be a way to do it, and that Blogspot has instructions posted somewhere. But I don't know. Sorry, man.

    3. Thanks, Brian. Seeing as how you're trying to be so helpful I will overlook that you called me "man." :)