Monday, June 15, 2009

Are there no islands in the Fever Swamp?

I dropped "Comments From Left Field" from the Sith blogroll for serial incompetence.

Today, I stopped off at "The Daily Kos" for port side edification.

As luck would have it, the very first story I looked at proposed a "simple" version of the single-payer health insurance plan that consisted of eliminating the social security tax and replacing it with a 10 percent payroll tax apparently dedicated to funding medical care.

Some of us might wonder how we fund Social Security after making that move. That is where the silver lining comes in.

Yes, a blogger published this plan at The Daily Kos. But problems were quickly pointed out in the comments section, and the blogger almost as quickly understood the problems:
Stupid on my part. The numbers I've had in my head are from our total MediCare and Medicaid expenditures, which were $750 billion in 2007, and have little do do with the $850 billion collected from FICA etc.

Clearly I need to spend more thought on this, though I believe that this is the way to go for paying the bills, though to maintain a robust Senior Retirement plan the rate will obviously have to be higher, more like 13-14% shared.

Well, almost understood the problems. Social Security is on the fast track to insolvency with a weakened economy and burgeoning expenses brought on by boomer retirement. Ditto for Medicare, since the bulk of medical expenses occur during the twilight years. Seven percent for FICA probably won't cut it without an associated cut in benefits (how do we define "robust"?).

But let's assume that FICA can remain the same. The idea was to fund medical care through payroll taxes.

It turns out that the proposal was entirely based on dubious reasoning. The writer took total health care costs for 2007 and tried to devise a tax plan for today that would raise that amount of money.

The problem is obvious: Health care spending is increasing rapidly.

The source used by the Kos kid
to provide a $2.4 trillion baseline for 2007 went on to project an increase to $3.1 trillion by 2012.

I suppose that leaves the option of cranking the payroll tax up a percentage point or so every year.

Some liberals seem to have faith that there will always be enough "rich" people to tap for the added costs, but these numbers reflect huge percentages of the GDP. As a percentage of rich person income and/or assets the numbers are unsustainable.

Now take a guess why conservative critics predict that single-payer health care will result in lower quality rationed health care.

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