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I woke up this morning to a beautiful day and streaming video with people talking about the impending budgetary disaster in health care entitlements of all sorts, whether Medicare, Medicaid or pension programs.

But..... not one person talked about 15 USC, medical monopolies or similar.  All were talking about how these plans are economically unsustainable due to being underfunded instead of where the real problem lies -- that the "benefits" being promised are increasing in cost due to acts that, in virtually any other industry would be considered felonies across the board, whether it be a refusal to quote a price, billing out at 2, 3, 5 10x or even more than the claimed price, discriminatory pricing that is flatly illegal under Robinson-Patman for anything that is a tangible good and more.

The simple matter is that while wider discussion is (occasionally) happening on what is about to happen nobody in either the BubbleVision or political field is talking about the why, nor proposing the most-simple of solutions: Enforce the damned Rule of Law.

This issue is not difficult to resolve in terms of how to fix the problem.  The issue is simply this: If you take this issue on in an honest fashion then a large percentage of GDP instantly disappears.  While that will very-quickly shift to other areas of the economy and in fact will lead to a huge growth boom as it will make the United States far more competitive on the world economic stage that shift will not be painless and the firms and individuals that will lose their "special snowflake" status that currently allow them to rob you blind with impunity spend a hell of a lot of money lobbying Congress to both establish and protect those privileges.

The fact that the BubbleHeads including people like Daschle, who was pontificating this morning, continually refuse to address the underlying issue head-on and call it what it is is nothing new.

If, however, we fail to demand that these jackasses cut that crap out and stop protecting a cadre of "businesses" that have as their first and foremost model ripping you off wholesale to the point that roughly 15% of all economic activity and growing is impounded by them using force as a consequence of exemptions, laws, and flat-out refusal to enforce existing law that by any reasonable reading ought to render them all felons IS AN OUTRAGE.

Wake the hell up America and demand that these jackals cut the crap -- or you will suffer the consequence of an economic catastrophe.

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If you wonder why I have pretty-much given up on America and "the world" at large, this would be a big part of the reason.  It is acts like this, which are peddled as "science" but are nothing but outrageous frauds that rob, maim and even kill people, yet go unpunished, that make quite clear that there is no such thing as "The Rule of Law."

Robert Lustig is a paediatric endocrinologist at the University of California who specialises in the treatment of childhood obesity. A 90-minute talk he gave in 2009, titled Sugar: The Bitter Truth, has now been viewed more than six million times on YouTube. In it, Lustig argues forcefully that fructose, a form of sugar ubiquitous in modern diets, is a “poison” culpable for America’s obesity epidemic.

A year or so before the video was posted, Lustig gave a similar talk to a conference of biochemists in Adelaide, Australia. Afterwards, a scientist in the audience approached him. Surely, the man said, you’ve read Yudkin. Lustig shook his head. John Yudkin, said the scientist, was a British professor of nutrition who had sounded the alarm on sugar back in 1972, in a book called Pure, White, and Deadly.

1972.

The man who wrote that had a group of nutritionists and the food industry band together and destroy his reputation and career.  Your doctor played along with the complicity of the pharmaceutical industry, even though doing so would both******you blind financially and make you blind literally through diabetes and other metabolic-related diseases.

It was in fact the Government's recommendations on "what to eat" that coincided almost exactly with the explosion of obesity and diabetes.  It was that set of "recommendations" that led McDonalds' -- and everyone else -- to shift from frying their potatoes in tallow, or beef fat, to vegetable oil, a substance you could never eat in meaningful quantities by consuming the actual vegetables involved (simply due to volume) and which, absent mechanized processing, would never exist at all in the form of actual oil.

Nutrition scientists are angry with the press for distorting their findings, politicians for failing to heed them, and the rest of us for overeating and under-exercising. 

Uh huh.

The problem is that you were not only wrong you intentionally ignored contrary evidence and cooked "studies", along with drawing conclusions from observational studies which cannot (ever) prove causation; they can only disprove an evidentiary link.

That didn't stop them from declaring causation where it couldn't be proved and now we know did not exist.

And by the way, Ancel Keys, the man responsible for a lot of the crap "advice" we have been given, knew of the contrary evidence.  He, like the Globull Warming screamers of today, claimed Yudkin was issuing "propaganda for the meat and dairy industries."

Sound familiar -- including the recent threats aimed at those hold contrary views on Globull Warming?  It should, and you might want to pay attention to the fact that when it came to Yudkin he was right and Keys was wrong.

Oh, and not only was Keys wrong, he was demonstrably wrong using his own data:

Although Keys had shown a correlation between heart disease and saturated fat, he had not excluded the possibility that heart disease was being caused by something else. Years later, the Seven Countries study’s lead Italian researcher, Alessandro Menotti, went back to the data, and found that the food that correlated most closely with deaths from heart disease was not saturated fat, but sugar.

Let me guess -- you never heard of that, did you?  Nor did your doctor change his mind, nor did the so-called "nutritional advice" dished out.  In fact it hasn't changed today; go into any hospital and what you will be plied with for "food" is high-carb, sugar-laden (directly and indirectly via grains and starches) trash.

It's even worse -- the same is true for cholesterol.  Despite repeated attempts to show that eating cholesterol raises blood levels it hasn't been able to be demonstrated.  Yet you hear repeatedly that eating cholesterol-laden foods (like eggs) are "bad" and the reason is a claim that something scientists know does not happen will occur.

When it comes to saturated fat, the sort that I eat with abandon and which is found in animal flesh the claim is that it causes heart disease.  Uh, no.  The data says the opposite:

In 2008, researchers from Oxford University undertook a Europe-wide study of the causes of heart disease. Its data shows an inverse correlation between saturated fat and heart disease, across the continent. France, the country with the highest intake of saturated fat, has the lowest rate of heart disease; Ukraine, the country with the lowest intake of saturated fat, has the highest. When the British obesity researcher Zoë Harcombe performed an analysis of the data on cholesterol levels for 192 countries around the world, she found that lower cholesterol correlated with higher rates of death from heart disease.

Again, given the evidence how can any so-called medical "professional" dish out disproved claims?

And by the way, the 2015 "dietary guidelines" published by the US?  They still (intentionally) omit the above.

So here's the question to you: Why is anyone involved with this scam walking around free instead of being under criminal indictment for the over one hundred million Americans (say much less those world-wide impacted by the same) alive today that have been severely harmed (roughly half of all adults in the US have metabolic syndrome) along with the millions that have died as a direct and proximate result?

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This is an interesting piece, but not because of the root numbers in it.

In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States.

Today, entitlement spending has swelled to nearly 70% of the annual federal budget.

Things are about to get a whole lot more complicated. The 20-year baby boom that took place after World War II is now beginning to result in a retiree boom.

For context, Druckenmiller points out that in 2030, the average age of an American citizen will be older than the average age of a resident of Florida today.

This demographic trend is going to create an entitlement spending catastrophe.

It doesn't have to, and the root of it isn't "entitlement spending", in the main.

Let's think this one through.

Social Security is funded by a "one in 8" tax, basically.  That is, about one dollar of every $8 you earn up to a given cap is confiscated before you ever see it.  You think it's half that, but it's not because the other half is paid "by your employer" and this fiction is maintained so you don't revolt.

However, your offered wage is reduced by that amount -- guaranteed.

So let's assume that we have a 2.5:1 ratio as is put forward.  That sounds horrifying, except that it's a temporary problem (it lasts 20 years, roughly), and then everyone involved in "causing" it is dead.  Further, there will be some that will "file late" for Social Security in an attempt to get more -- a strategy that only works if you live a very long time in terms of total funds, and lose their bet because they will die before the break-even is reached.  In fact, actuaries don't care if you make this bet because they know that on balance while some will win, some will also lose and it will all even out.

No, the problem here is not the "one in 7.5" tax for Social Security.  It is the one in 34 rate assessed for Medicare.

To put not too fine a point on it, Medicare and Medicaid (combined) are roughly double the outlay of Social Security and yet they are funded at a rate of less than 1/4 that of Social Security via taxation.

Further, Social Security outlays are indexed to alleged inflation, which is intentionally machined to show smaller than real figures, and thus there is a built in depression of Social Security obligations in real terms, especially over long (20, 30, 40+ year) timeframes.

Social Security itself is unlikely to go broke.  If it does "run out of money" 30 years hence there will be some reduction in benefits, but remember that even a 1% inflation "miss" against reality over 30 years turns into a 35% reduction in real expense.  In other words the "you'll only get 70% of your promised amounts" out of Social Security claims are probably dead wrong; you'll get the entire amount but it will be short in purchasing power by 30%.

The disability fund is another matter; that's bankrupt now and politicians have been stealing from the retirement fund for a while to cover it up.

On the other hand Medicare and Medicaid spending is going up at a radical rate compared to inflation, government-stated or not.  How bad is this?

Fiscal Year 2005, for example, spent a total of $652 billion.

Fiscal Year 2015 spent a total of $1,297 billion, or close to a clean double in 10 years.

This was not mostly-centered in Medicare -- that is, retirees.  Medicaid went from $182 billion to $349 billion, damn close to a double standing alone.  In other words it was across-the-board in all age groups served.

That's a 7.2% growth rate which far exceeds alleged inflation -- inflation allegedly was up 20% over the same 10 years, or an annual rate of about 1.8%.

In other words that segment of the economy as spent by the government went up at a rate four times that of general prices.

Need I remind you what happens any time two exponential growth curves have a different growth rate?  Go look at Leverage; there's a damn good reason that this is covered in the front of the book because if you don't understand and deal with it nothing else matters.

This, and only this, is the cause of all of the federal debt expansion, pension fund problems both private and public and the detonation that will occur in the federal budget and forward liabilities unless it is stopped and reversed.

Note carefully that we spend as a nation roughly double as a percentage of GDP what other developed, G20 nations spend on health care -- and virtually all of those other nations have socialized medical systems.

Socialism is always less-efficient than capitalism because there is no reward for innovation in a socialist system; you cannot take market share from someone else since market share is not a function of market success or failure.

This, in turn, means we're definitely overpaying by more than twice for medical care; we are in fact probably overpaying by as much as 80% across-the-board.

It is not hard at all to find examples of people being billed 10 or even 100x a price in another nation for a given thing.  It is cheaper for me to fly to Narita, Japan, round-trip, and have an MRI done there by more than 50% than the average amount charged for the same scan here in the United States.

While you can in some cases get that scan done for a few hundred bucks here they're all $200 or so in Japan, and most people grossly overpay here in the US.  Why?  Because of various practices that all amount to consumer deception, extortion, price-fixing or all of the above -- all acts that are supposed to be crimes.

Let's say you go to the ER "in-network" on your alleged health insurance.  While there some doctor sees you.  He isn't in your network and you get a bill for hundreds or thousands from him.  The hospital administrator should be imprisoned for allowing this along with the doctor who did it; you neither consented to such a bill nor in many cases had any ability to refuse, but the administrator could have required that said doctor be "in network" to be there or if not that he take the same reimbursement rate as if he was.  He didn't and thus they both took advantage of your "in extremis" situation to bilk you.  That's supposed to be illegal as a matter of general consumer protection yet not one person has gone to prison for it -- ever -- that I can find a record of.

Drug companies set prices by nation based on various things, including GDP and what they think their drug is "worth" in terms of your life or health.  It's illegal to restrain trade (15 USC, Sherman, Clayton and Robinson-Patman) yet that's exactly what they do, with the help of the Federal Government, in that if you get on a plane and buy a suitcase full of some drug at a much cheaper price to try to bring it back and both make a profit while dropping the cost here in the United States it is you rather than they who will go to prison.

It is virtually impossible to get a binding quote on a procedure from nearly all medical facilities in advance.  The notable exception are places like The Surgery Center of Oklahoma, which posts "all-in" prices.  I note that said prices are typically one third to one fifth of what is charged in hospitals that don't post prices, including hospitals in the same general area of the country.  Gee, I wonder why, and then one wonders why there haven't been thousands of criminal indictments and lawsuits alleging racketeering and extortion filed against the administrators and doctors in all the other hospitals.

Here's the reality folks, and it's a matter of arithmetic, not politics:

If we stop this right now the Federal Government would immediately and permanently run a roughly $400 billion a year surplus.  In other words your purchasing power would go up rather than down every year and the federal debt would slowly be retired at a rate of about a trillion dollars every three years.

In addition the "entitlement bomb" being discussed in the linked article would instantly and permanently disappear.  It simply would not exist; the short-term stress on Social Security would be manageable without material changes to the program due to the inherent understatement of inflation in the CPI used to link benefits and over the longer, indefinite time horizon the program remains stable.

Finally, were we to stop this keeping the Medicare impact on Seniors as it is today would allow Medicare to almost entirely disappear.  The reason is that Medicare is an 80/20 program; if the base cost of medical care decreases by 80% (and if we only equal the socialist nations it would fall by 50%; we can do better than that with capitalism) then exactly zero needs to be spent for the cost to an actual Senior to remain the same.  However, since we did promise such an 80/20 program keeping that promise is not an irrational act and thus some spending (about 1/8th to 1/5th of what it is now) would remain.  Likewise, Medicaid is currently basically-zero cost for beneficiaries; if the cost of care drops by the expected amount we might well be able to get rid of many of the beneficiaries entirely since they would be able to afford to pay cash.

FISCALLY SPEAKING THE ENTIRE PROBLEM RESTS HERE -- AND NOWHERE ELSE.  IF WE FIX THIS WE NOT ONLY ARE OK AS A NATION FROM A FISCAL PERSPECTIVE WE PROSPER.  IF WE DO NOT FIX THIS AS A NATION WE FISCALLY (AND PROBABLY POLITICALLY) DIE.

THIS IS NOT POLITICS, IT IS ARITHMETIC.  ARGUING OVER OTHER MATTERS WHEN IT COMES TO OUR POLITICAL SYSTEM, UNTIL THIS IS ADDRESSED, IS STUPID AND SERVES ONLY TO PROTECT THOSE WHO ARE CURRENTLY ROBBING YOU BLIND -- LITERALLY.

INSTEAD WE SHOULD BE DRAWING UP LISTS OF PEOPLE AND FIRMS TO BE INDICTED AND IMPRISONED.  AFTER JUST THE FIRST FEW WERE SERVED THIS ENTIRE EDIFICE OF FRAUD WOULD COLLAPSE IN UPON ITSELF AND PRICES WOULD FALL LIKE A STONE.

WE EITHER DEMAND AND ENFORCE THIS NOW OR NOTHING ELSE MATTERS.

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