Debt Limit - Paying for that which was already spent

privitization works on profits so the poor will not be covered or receive even less in care than they do now with medicare being a government handout..

the solution is to make it single payer like in Europe where the richer pay for the poorer and everyone receives fair and equal care..

this way there will be no debt limit because everyone pays more money into the system.

 

It should be noted that borrowing from the Social Security Trust Fund which started in the 1980's, continued under the Clinton adminstration and under both Democrats and Republicans. It has been bi-partisan borrowing.

We can also note that the Bush tax cuts predominately when to middle and low income workers and resulted in increasing the number of Americans than had a zero or negative income tax liability to 38% of all households. The wealthy are already paying the vast bulk of income taxes which are disproportionate to their income.

Corporate taxation is merely transferred to the consumer in the form of higher prices for products and services which makes America less competitive internationally. Ultimately it leads to lower American employment because of reduced international demand and a higher cost of living for the average American. It always sounds good to say "Tax the corporations more" the tax rate for American corporations is already the highest in the world.

Currently the US government is spending between $25K-$30K/household/yr and there simply isn't a rationalization that supports this level of federal expendatures. While unquestionably taxes will need to increase, hopefully by allowing the Bush era tax cuts to expire, expendatures need to be cut dramatically first. We need to not just balance the budget but also need to reduce the national debt because the interest is exporting the wealth of America to foreign countries.

 

Clinton was under a republican controlled congress and the only way to compromise with them was to agree to borrow from the social security trust fund in lieu of taxes on the wealthy for the nations expenses.

Poorly run corporations that transfer taxation to the consumer will go out of business but the wealthier ones that can afford to absorb tax costs will stay in business by keeping prices low. Or Democrats could target wealthy businesses only by removing subsidies such as seen in the oil companies and finding other ways to tax them specifically at a higher rate.

The last deficit Medicare can be taken care under a single payer system similar to Canada, Americans have been duped into believing the only way to pay for the debt is spending cuts and this is simply not a proper rationalization of the options available.

 

The Social Security Trust Fund was created by a Democrat Congress under Reagan and it was established where borrowing from it was mandated into the law. It is held as Treasury securities which are owned by the US government. I would have disagreed with this and believe it should have been stored as lawful money (gold and silver coins) but it wasn't.

According to the CBO a single-payer health care system would cost an average of $5000-$7000 per person. When compared to private insurance that costs, on an average, less than $4000 per person it is financially unfeasable. Americans are not willing to pay even $5,000/person for health insurance. For the typical family of four that would require $20,000 per year in additional taxation. Not even the wealthy can afford to pay the additional cost of a single-payer system in the United States.

The only way to reduce that cost is by limiting services. As we've seen in Britain the individuals have to carry supplemental private insurance to compensate for the lack of services provided by their government health care program. Canadians come to the United States to secure medical services that are not being provided for in Canada.

In the United States we've also seen what happens with Medicare/Medicaid where the government limits payments to providers. Private provides simply refuse to treat Medicare/Medicaid patients. In WA 96% of private providers refuse to accept new Medicare/Medicaid patients. "Insurance" is only good if it is accepted and in the United States it wouldn't be accepted by private providers.

The United States is a free market economy (excluding government interventionism which corrupts that system) and certain programs such as socialized health care simply won't work here. It is a fact that many fail to understand.

 

Just a random thought...would line item veto help reduce the 'pork' in the budget? Especially when unrelated pork is attached to a bill?

 

The Supreme Court ruled that a line item veto is unconstitutional as it infringed upon the separation of powers established by the US Constitution.

 

A few solutions for a socialist health care system that will eliminate borrowing for debt in health care.

1) Force Physicians to accept government health insurance and accept lower pay for their services.

2) Raise the health care income tax on individuals making over $250 thousand a year to further alleviate the cost burden on the middle class.

3) Enact a health care tax for wealthy corporations that can afford to absorb higher taxes without passing those costs onto the consumer, this way the wealthy corporations will pay more into a pool to subsidize the smaller businesses who cannot afford health care for their employees.

 

None of this would work and here is why.

Item 1. Medicare already attempts to do this and the result has been that primary care physicians, who only average less than $150K/yr, have turned into referral agents. They aren't paid enough to actually treat a patient so they refer them to specialists that charge more which raises the cost of health care. Private clinics cannot be forced to accept patients so they simple refuse to treat government insured patients which means the best care for the dollar is reserved for those who have private insurance. Canada also tried to force all physicians to accept government health insurance and now has a huge shortage of doctors because people simply choose not to go into a profession that takes years of school and doesn't compensate the individual enough for their services.

Item 2. Many seem to forget that a person earning over $250K/yr is often older nearing retirement age. They probably worked for much less throughout most of their working career and they finally reach a point where they can actually contribute to their own retirement and then the government wants to take away that retirement income. Remember that it takes millions of dollars in a retirement account for a person to retire today and maintain their standard of living and much of the asset accumulation occurs in the last ten years of employment. I know this is true because even though I don't earn $250K/yr I'm close and up until only four years ago I only earned roughly a median income but finally reached to point where I could make major contribututions to my retirement accounts. Currently the US government take more in taxation from me than I can actually save for my own retirement. Too many confuse personal income with personal wealth and the two are fundamentally unrelated.

Ultimately if we were to initiate a single-payer system it would require a major tax increase for the middle and lower income tax workers even if taxes were raised on higher income workers. There simply aren't enough "wealthy" individuals to carry the tax burden. If the average couple was told that their taxes were going up by even $7000/yr they would come unglued and that would only cover about half the cost of the single-payer system for a married couple.

Item 3. Corporations always raise the cost of their goods or services when they have costs added. People love to condemn the big oil companies, for example, but their profit margin is relatively small. The Federal and State governments already earn more from a gallon of gasoline than the oil companies. They cannot afford to pay more taxes without raising the costs of goods and services they provide. Price fixing by the government, which this would entail, has proven to cause disasterous results. Ultimately the People pay the taxes imposed on business through higher prices which lowers the standard of living for the people.

 

item 1 - that is because physicians feel entitled to high pay but if they were all equally forced to accept government insurance the primary care physicians would not have to scam the system because the incentive is removed...the health system needs to move public not private so that everyone is covered and the rich pay for the poors medical debt instead of government loans from China.

item 2 - those who make over 250k a year should supplement their retirement with social security as the rest of the middle class does and not rely only on private accounts, this will justify their higher taxes.

item 3 - the oil companies are the highest profiting companies in the world, they can afford to donate a portion of their profits towards Americas health care via proper tax legislation by the democrats.

 

If I could pay 10% more in taxes and have health care I would do it in a heartbeat and so would most middle and lower income people. The middle class already pays 30% of their income in taxes and get a very paltry return in government services compared to what middle class people in the EU get for their 40% in taxes.

Look at it this way, wages have been declining because of health care costs. Employers have basically put all the money for wage increases into increasing health insurance costs while also shifting some of the cost onto employees. Low and middle income workers would trade a higher tax rate for health care insurance so they could get at least something of a pay increase and stop the uncertainty of how much is coming out of their paycheck for their health insurance.

Many middle class people who buy their own health insurance pay more for insurance than their mortgage or rent. It is the single largest household expense for families with children and it goes up drastically every year. These people would gladly pay another 10% in taxes to get out of that nightmare. My brother pays $1100 mortgage and $1400 for family health insurance each month. He is a staunch republican but he would rather pay 10% more in taxes. It would be far less than the $1400 a month in health insurance.

Wages would rise and worker mobility increase if employer provided health care was replaced by tax funded health care.

 

While I don't disagree that the US govenment is spending far too much per household, between $25K-$30K/yr, with little of that benefiting the average person the fact is that the CBO estimated that the cost per individual for a single-payer health care system would cost far more than a 10% increase in taxes per household. Per the CBO the average cost would be between $5K-$7k/yr/person. While each of us pay a different amount in income taxes if anyone wants to calulate how much their taxes would increase simply add that $5K-$7K/person increase to their current tax liability.

This is true although the greatest increase in the cost of health care is predominately related to Medicare where the costs average about $14,500 per person. The high cost of health care in America is predominately related to Medicare which is responsible for about 50% of all medical expendatures while only insuring about 26% of the population.

At the sametime employers do provide health insurance for a large percentage of the population and statistically it costs more than the average cost of private insurance because it covers more services. Employees do often contribute to these group plans and the average costs have gone up. My most recent information is from 2009.

Yes, rates and co-pays have gone up about 10%-15% since 2009 but even with that would only reflect less than a $45/mo increase per month for a family and only $1/mo for a single individual at the 15% increase rate.

Once again based upon actual statistical information from 2009 this is a gross misconception of the cost of private health insurance.

Once again those costs have unquestionably increased since 2009 by about 10%-15% but it is still substantially lower than the CBO estimated costs. While out of pocket expendatures, such as co-pays for office visits, are not included private insurance remains far less expensive than a single-payer system run by the government.

Read more: Average Cost of Private Health Insurance in the USA | eHow.com http://www.ehow.com/about_7319135_average-private-health-insurance-usa.html#ixzz1UcjTJjOW

Nice theory but it probably wouldn't happen. There would be no increase in wages as employers would generally use the savings to reduce the costs of their products and services.

 

While I don't disagree that the US govenment is spending far too much per household, between $25K-$30K/yr, with little of that benefiting the average person the fact is that the CBO estimated that the cost per individual for a single-payer health care system would cost far more than a 10% increase in taxes per household. Per the CBO the average cost would be between $5K-$7k/yr/person. While each of us pay a different amount in income taxes if anyone wants to calulate how much their taxes would increase simply add that $5K-$7K/person increase to their current tax liability.

This is true although the greatest increase in the cost of health care is predominately related to Medicare where the costs average about $14,500 per person. The high cost of health care in America is predominately related to Medicare which is responsible for about 50% of all medical expendatures while only insuring about 26% of the population.

At the sametime employers do provide health insurance for a large percentage of the population and statistically it costs more than the average cost of private insurance because it covers more services. Employees do often contribute to these group plans and the average costs have gone up. My most recent information is from 2009.

Yes, rates and co-pays have gone up about 10%-15% since 2009 but even with that would only reflect less than a $45/mo increase per month for a family and only $10/mo for a single individual at the 15% increase rate.

Once again based upon actual statistical information from 2009 this is a gross misconception of the cost of private health insurance.

Once again those costs have unquestionably increased since 2009 by about 10%-15% but it is still substantially lower than the CBO estimated costs. While out of pocket expendatures, such as co-pays for office visits, are not included private insurance remains far less expensive than a single-payer system run by the government.

Read more: Average Cost of Private Health Insurance in the USA | eHow.com http://www.ehow.com/about_7319135_average-private-health-insurance-usa.html#ixzz1UcjTJjOW

Nice theory but it probably wouldn't happen. There would be no increase in wages as employers would generally use the savings to reduce the costs of their products and services.

 

agreed and even if government did not regulate businesses for the use of that incentive those cost savings would ultimately be passed onto the consumer which means more money in the pockets of the middle class and less overall debt.

 

That is true as it would probably reduce the prices of goods and services which would benefit the people by providing a better standard of living. Unfortunately that minor gain would be overwhelmed by the estimated new taxation required for a single-payer system estimated to cost between $5K-$7K per person.

 

Old people have a lot of health care needs. That is why the private insurance industry would not cover old people which led to the establishment Medicare. It is expected by all but the most ignorant that covering health care for old people is more expensive than covering a younger healthier population.
Even so, the government could double its health care spending and cover the entire population.

No, it is what my Brother actually pays. I have seen his bills.

When you consider that most private health insurance is totally inadequate it should cost less than the more comprehensive coverage the government provides. You should be comparing the cost of private plans that provide the same coverage as the government does if you are going to offer a realistic comparison of cost and spending.

Employers would certainly try to pocket as much of the savings as possible but that would most likely prove illusory as competitors decide to take less as profit and give some as higher wages and lower prices to gain advantage in employee quality and market share.

Employers would have to raise wages to keep employees who were stuck to their jobs by health care concerns from fleeing. Once one employer offered higher wages to poach workers all the rest would have to follow, it would happen, it is simple competitive business practice.

The cost of health care is a goodly portion of employee compensation and the source of a lot of headaches and heartburn. Once employers are relieved of that ever increasing expense they will be able to direct resources to more profitable endeavors. US manufacturers point to the US health care system, which puts enormous costs on them, as the single biggest impediment to global competitiveness. None of their international competitors have such costs.

A single payer system would also attract a lot of businesses from the EU and elsewhere looking for skilled workers and lower wages in the biggest market in the world. For decades EU companies have eyed the US as a prime place for expansion but the insane health care system has made many conclude that it is too risky because of the impossibility of planning accurately for health care expenditures. Many foreign executives are so baffled by the US health care system that they will not even consider the US as a place for expansion.

 

Apparent ignorance related to the passage of Medicare in the 1960's and private insurance. 50% of retirees had private health insurance in the 1960's and it was the other 50% that did not that the government was addressing with Medicare. Private insurance at that time could be purchased like life insurance based upon the age of the person when they enrolled and the premium was basically fixed based upon age of enrollment for life (e.g. the insurance company could raise rates but if a person enrolled at 25 their rate would always be based upon that 25 yo enrollment rate even if they were 65). The point being that insurance for retirees was readily available and was actually very affordable for those that enrolled in private health care contracts when they were young. Medicare destroyed this type of private insurance plan.

Based upon the CBO the cost to cover the other 74% of the population would require far more than doubling taxation and spending. It would require covering 222 million Americans at between $5000-$7000/person. If we split the difference and use $6K/yr/person the cost would be $1.3 trillion per year. That would be about four to five times the current Medicare portion of FICA/Payroll taxes (rough estimate on my part). Remember that today Medicare isn't even generating the revenue required to cover expendatures from its portion of FICA/Payroll taxes and just to maintain it is going to basically require doubling it's portion of the FICA/Payroll taxes. If we were to address both the shortfalls in funding for Social Security/Medicare plus adding another $1.3 trillion in expendatures then FICA/Payroll taxes would have to triple to roughly 40% of wages. Can everyone afford to have 20% of their income going to the government off the top with no deductions? What would a 20% Payroll tax for business do to our international competiviness and how many US jobs would be lost? We could kiss companies like Boeing goodbye as it is barely competing with Airbus today on prices.

If we didn't use FICA/Payroll taxes then the additional $1.3 trillion expendature would require doubling of income and all other general revenue taxation today. This could not be levied exclusively on the wealthy and it would require thousands of dollars in taxation for the 38% of households that pay no income taxes today. Always remember that the $1.3 trillion amount will increase every year requiring more taxation in the future.

People should be allowed to choose how to provide health care for themselves and their family. It is far less expensive to do with private insurance even when additional costs are included. A single-payer system run by the government is the most expensive means for providing health care and denies the Right of the Individual to determine how best to provide for their own health care needs.

Government should, at most, provide a safety net for those that through no fault of their own cannot afford to provide for their health care needs. This safety net should be provided for by the States, not the federal government, as the States are the direct government of the People and are chartered through their State Constitutions to provide for the needs of the residents of the State.

 

agreed sick people put a strain on businesses and they stop health care coverage thereby putting their employees in emergency rooms and raising US debt.

the best answer to reducing the debt limit is a single payer system where everyone pays into a pool to help those who are ill....

 

It's actually federal law that puts those without insurance and that are unable to pay for services into the emergency rooms instead of sending them to out patient clinics that can provide the same health care services for less than 1/3rd of the cost.

In short this is about providing a safety net for those that require but cannot afford health services.

We already have a federal program to provide health services to those that require health services but cannot afford to pay for those services. It's called Medicaid. True, it doesn't do that which it was designed to do but instead of a new proposal how about fixing the existing program!!!

Forcing individuals into a very expensive government run single-payer system to provide a safety net that was previously created by Congress is irrational. We're already paying taxes for the safety net and its up to our government to make it work. The government doesn't need more money but instead it needs to overhaul the system so that it does what its supposed to do.

The sad part is that in 2009 Congress, or at least the Democrats that controlled Congress, had an opportunity to lower the costs of health care in the United States but instead of addressing that they mandated "Obamacare" on America. They completely ignored anything that would reduce the cost of medical services, such as changing the law so those in need of services would be sent to an out patient clinic as opposed to emergency rooms, and they voted against providing competition for prescription drugs and privare insurance. They could have increased private health insurance coverage by simply providing a dollar for dollar tax credit for premiums paid by individuals. They didn't fix Medicare or Medicaid or address the shortfalls of revenues related to expendatures by revising the programs so that they would be financially viable in the future. Instead they came up with a trillion dollar plus spending bill.

 

A safety net is a bad idea because that is what causes the higher debt limit, the answer is forcing the healthy to pay for the sick.

Most of the sick are elderly and they represent a small number compared to the entire population so it should be in their interests to support a single payer system where the majority who are younger pay for their care.

President Obamas health reform forces insurance companies to start a pool to pay for everyone, in the future it will be converted more socialist where the government takes control over the pool and thus no more high national debt...

 

No it isn't. Where did such a silly idea come from?

Medicare "insures" the elderly and is paid for by the entire working population through FICA/Payroll taxes.

With the 11th District Curcuit Court of Appeals ruling that the individual mandate and penalties are unconstitutional, a decision that the Supreme Court will probably agree with when it hears the case, this becomes an empty argument.

 

This is a point many people overlook and, in my opinion, the single largest mistake of Mr. Obama's administration regarding the economy. The current payroll tax cuts are specific to 2% off the previous 6.2% across the board. If one looks up the numbers the old 2008 Economic Stimulus Act tax rebates, would find it cost nearly the same as our current payroll tax credit (and the 2009 Making Work Pay refunds). The CBO noted costs in the vicinity of 110-115 billion $ for the three separate programs. The difference between the current tax cuts and the old refunds is its function is entirely objective.

The current faux debt crisis was to avoid default and credit rating downgrade. Which we managed to escape the former. But if the parties really wanted to avoid both, they would not have walked out. There are other things at play. Members the GOP walking out multiple times (as did Mr. Obama) over tax increases during the debt ceiling crisis should ring a bell. The issue here was not the debt, but the taxes. Republicans must have their current tax cuts because of its undermining effects on social security. Every SS dollar we fail to collect from payroll taxes we subsidize from general revenue, and we all know where this leads. In this case Republicans clearly had the upper hand as no President would want the default to be in his hands.

Under the previous Economic Stimulus Act and Making Work Pay tax rebates, the adjusted gross income cutoff point was south of 200k$, whereas the current tax cuts have no target. When we cut across the board, we are increasing the proportion of income available to the wealthy and decreasing disposable income of the poor and middle class. What we should be striving for is a higher disposable income for the lower class (proportional to payroll tax cut/refunds) than the upper class. Another way to say this is the money consumed per dollar of tax refund or rebate increases as the salary decreases. This puts money back into the economy directly and has a greater effect on job creation rather than a more capitalist re-investment strategy of the wealthy. There is nothing wrong with the latter tactic necessarily, but with unemployment being the foremost cause of the current economic situation and 'debt crisis' any disposable income spent will be recycled exponentially. This would lead one to believe the juxstapositional cause of the crisis is not unemployment but high end investors where the capital moves in a closed loop. We recognized this to be true in 2007/2008 where high interest rates put housing/banking/big business investments in check.

And as long as the debt ceiling imposition rules congress, the American people sit idly in wonder how we have come to this point. When every day our congress debates it increases their own personal revenue and the ability of the wealthy and business to donate capital through lobbyists etc with those earmarks and discretionary funds. With the added benefit of the congressional majority holding their anti-ideologues in check while victimizing the people's paychecks. But we can't complain because we are receiving 'tax cuts'.

In short, there is no debt crisis it's just politics. And until we get over the tax situation we will not come out of this economic downturn without massive Keynesian re-investment (which we already know from the past 3 years cannot work in itself).

 

There is actually a debt crisis but it is being hidden by many factors.

First of all is the fact that the national debt is an obligation of general taxation and is unrelated to FICA/Payroll tax revenues. Social Security/Medicare are not currently generating deficit spending because more FICA/Payroll taxes have been collected than spent but the servicing of the debt created by borrowing from the Social Security Trust Fund which is paid for with general taxation or borrowing is creating deficits.

The Federal Reserve is also keeping interest rates artificially low which amounts to theft of income from those that own the Treasury securities, such as T-Bills, because their investment is not earning fair market value. This is really costly to the US economy because millions of retirees have their retirement funds tied up in Treasury securities. The less income they have the more it hurts the economy because they cannot spend (consume) with money they don't receive as interest on their investment.

A large percentage of the US debt, about 1/3rd as I recall, is also owned by foreign governments, banks and investors. This debt is also serviced with general tax revenues and that money is being sent overseas. This also adversely effects the US economy because that money is not being spent in the US. Out taxes are literally being sent overseas.

We can expect certain things to happen in the future and one is that interest rates are going to rise as the Federal Reserve cannot keep them low indefinately. As the interest rates rise so does the percentage of general taxation required to service that debt. The more tax revenues are used to service the debt the fewer tax dollars are available for necessary government services and programs. Taxation will have to be raised while at the same time government services and programs will have to be reduced simply to service the national debt. This isn't a small tax increase but instead represents a huge tax increase in the tax rates for everyone.

The national debt is going to drive a doubling of the general tax revenues and most seem to ignore this fact.

 

A safety net raises the debt limit because it is simply one big welfare program. Once there is a public health system there will no longer be a need for a safety net.

Medicare is a big safety net that should become socialized so it is no longer a welfare program and physicians cannot reject it any longer because of low reimbursement compared to the free market.

President Obamas health care reform moved a step closer to reducing the debt limit by moving health care towards a general expendature taxation system instead of just funded through payroll taxes.

 

No safety net means no more defict? Please explain?

Medicare collects half what each participant costs. The difference is debt.

Lets say we socialize it and force doctors to take what we collect (half what medicare pays now). With a big pay cut, what is the incentive to remain a doctor in the US? Who is going to spend the years in school, and go deep in debt to earn less than an engineer with a 4 year degree?

So you want to leave you kids with huge debt and no medical care - how compassionate....

 

I just wanted to take a moment to correct this erroneous statement. Social Security/Medicare are funded with FICA/Payroll taxes exclusively and to date those taxes have collected over two trillion dollars more than the total expendatures. There is no debt when the tax revenues exceed the expendatures. It is true that these surplus funds are rapidly being depleted but as of today neither Social Security or Medicare have generated any debt.