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User Info Get Your Mouth Off His Schwantz; entered at 2019-07-27 11:01:57
Posts: 203810
Registered: 2007-06-26
@Frieza - Medicare is currently running off the accumulated Treasuries in the so-called "lock box" (which isn't, of course.) This is why its full impact doesn't show up in the budget deficit; they're spending accumulated capital in large part, basically.

When they run OUT of said accumulated Treasuries they can't do that anymore. Present law prohibits them from running beyond tax receipts + that accumulated set of funds for Medicare (Medicaid, on the other hand, is a pure entitlement and has neither tax or asset base it can draw on.) Medicaid is ALSO misleading in that some of it is paid for by the states. The problem with cutting off Medicare wholesale is that in expansion states Medicaid is available to ANYONE who is low-income with no other option, so if you toss Medicare those older people will wind up instantly in Medicaid, and you've saved nothing. In ALL states if you're broke and wind up in a nursing home Medicaid pays for it, so after the "gone" Medicare system causes a retiree to blow up their checking account in two months guess where that winds up? Medicaid.

They'll keep collecting the same Medicare tax but it's tiny. To bring CMS into balance on a cash basis they'd have to roughly multiply the Medicare tax by SIX! That's never going to happen, so instead they'll just toss the constraint on CMS not being able to spend on the Medicare side beyond tax receipts + accumulated Treasuries.

As soon as they do that the entire impact of CMS' net spend shows up in the formal deficit figures. That plus the expected acceleration in spend over the next five years (~7-8% compounded) is going to blow the roof off the deficit immediately when this occurs.

Last modified: 2019-07-27 11:03:40 by tickerguy

2019-07-27 11:01:57