Sometimes it really makes me wonder why there are so many obvious truths and trends in our economy and society that I, a mere lonely blogger literally sitting on the couch in my basement, am able to see that the politicos, mainstream media and our so-called business "leaders" are unable to see. I guess it's because I have deliberately positioned myself as a outsider, and thus really could not give a shit less how things turn out for the various charlatans, frauds and hucksters who completely dominate those segments of our society these days.
This basic point hit home again this week when I read a Reuters article about a recent Congressional Budget Office (CBO) report on the expected rise in government health care program costs over the next decade:
Government spending for Medicare, Medicaid and other healthcare programs will more than double over the next decade to $1.8 trillion, or 7.3 percent of the country's total economic output, congressional researchers said on Tuesday.So why did I find that particular statistic that I highlighted in bold, bad as it is, so interesting? Maybe because back on August 3rd of last year in my post, "Spending on Medicare and Medicaid is Absolutely Out of Control," I wrote the following:
In its annual budget and economic outlook, the non-partisan Congressional Budget Office said that even under its most conservative projections, healthcare spending would rise by 8 percent a year from 2012 to 2022, mainly as a result of an aging U.S. population and rising treatment costs. It will continue to be a key driver of the U.S. budget deficit.
As you can see, going back to the first quarter of 2008, the quarter that marked the “official” beginning of the Great Recession, Medicare and Medicaid spending has in fact exploded by 21%, advancing a staggering $208 billion on an annualized basis during that time. Extrapolating that growth rate forward would cause such spending to double to nearly $2 trillion per year by 2021, the final year of the ten year time frame used in the just completed deficit reduction battle.Not to pat myself on the back or anything, but that was a pretty damn good calculation on my part. And you know what I used to come up with it? The friggin' calculator on my computer. Needless to say, I don't have a whole staff of budget analysts working for me like the CBO does who do nothing but analyze this kind of data on a full time basis.
Even more maddening, here was the CBO's bland conclusion to its report:
"The resulting deficits will increase federal debt to unsupportable levels," the CBO report said.And here was my conclusion from back in August:
Even scarier, that total is not far below the amount of revenue (around $2.1 trillion) the federal government took in from taxes last year.To the good folks at the CBO: if you ever want to trim that bloated staff of yours, I am available for consulting work. I'll even put on a tie and everything.
Obviously, unless real, organic economic growth not tied to federal deficit spending resumes, these two programs are in big trouble. And that doesn’t even take into account that the Baby Boomer generation is just now reaching the point where its oldest members are becoming eligible for Medicare benefits.
Though the debt limit accord passed this week was hazy on real specifics, I think we can safely assume that whatever cuts are planned for Medicare and Medicaid will hardly curb this explosion in costs. Since we have reached a point thanks to peak oil and resource depletion where continued real economic growth is impossible, a genuine crisis in these programs (as opposed to the fake political crisis we just witnessed) is quite obviously not far away.
Bonus: Pretty soon this is the only doctor any of us will be able to afford: