rushmc 18 #1 July 16, 2009 http://cboblog.cbo.gov/?p=328[url] Thanks Mr Obama (and congress)Graphs in the link. Director’s Blog -------------------------------------------------------------------------------- « Intergovernmental Mandates in Federal LegislationThe Long-Term Budget Outlook Today I had the opportunity to testify before the Senate Budget Committee about CBO’s most recent analysis of the long-term budget outlook. Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy. The following chart shows our projection of federal debt relative to GDP under the two scenarios we modeled. Federal Debt Held by the Public Under CBO’s Long-Term Budget Scenarios (Percentage of GDP) Keeping deficits and debt from reaching these levels would require increasing revenues significantly as a share of GDP, decreasing projected spending sharply, or some combination of the two. Measured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs—Medicare, Medicaid, and Social Security. For decades, spending on Medicare and Medicaid has been growing faster than the economy. CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much, as a share of the economy, on just its two major health care programs as it has spent on all of its programs and services in recent years. In CBO’s estimates, the increase in spending for Medicare and Medicaid will account for 80 percent of spending increases for the three entitlement programs between now and 2035 and 90 percent of spending growth between now and 2080. Thus, reducing overall government spending relative to what would occur under current fiscal policy would require fundamental changes in the trajectory of federal health spending. Slowing the growth rate of outlays for Medicare and Medicaid is the central long-term challenge for fiscal policy. Under current law, spending on Social Security is also projected to rise over time as a share of GDP, but much less sharply. CBO projects that Social Security spending will increase from less than 5 percent of GDP today to about 6 percent in 2035 and then roughly stabilize at that level. Meanwhile, as depicted below, government spending on all activities other than Medicare, Medicaid, Social Security, and interest on federal debt—a broad category that includes national defense and a wide variety of domestic programs—is projected to decline or stay roughly stable as a share of GDP in future decades. Spending Other Than That for Medicare, Medicaid, Social Security, and Net Interest, 1962 to 2080 (Percentage of GDP) Federal spending on Medicare, Medicaid, and Social Security will grow relative to the economy both because health care spending per beneficiary is projected to increase and because the population is aging. As shown in the figure below, between now and 2035, aging is projected to make the larger contribution to the growth of spending for those three programs as a share of GDP. After 2035, continued increases in health care spending per beneficiary are projected to dominate the growth in spending for the three programs. Factors Explaining Future Federal Spending on Medicare, Medicaid, and Social Security (Percentage of GDP) The current recession and policy responses have little effect on long-term projections of noninterest spending and revenues. But CBO estimates that in fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 41 percent of GDP at the end of fiscal year 2008 to 60 percent at the end of fiscal year 2010. This higher debt results in permanently higher spending to pay interest on that debt. Federal interest payments already amount to more than 1 percent of GDP; unless current law changes, that share would rise to 2.5 percent by 2020. This entry was posted on Thursday, July 16th, 2009 at 4:43 pm and is filed under Budget Projections, Long-Term Budgetary Issues"America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
kelpdiver 2 #2 July 17, 2009 Do you realize that the primary conclusion one should draw from this letter is that health care must be reformed? It points to Medicare as the looming demon. Or mandatory weight loss for the majority of Americans. Quote Share this post Link to post Share on other sites
rushmc 18 #3 July 17, 2009 QuoteDo you realize that the primary conclusion one should draw from this letter is that health care must be reformed? It points to Medicare as the looming demon. Or mandatory weight loss for the majority of Americans. Medicare and Medicade? yes, but that is a damn site long way away from what Obama wants. He wants to add to it. Many have be speaking to those programs along with SS for a long time. It is just Obamas doom of the moment to push his shit through. Which I predict will fail if it takes more than the next 4 weeks to get done."America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
TomAiello 25 #4 July 17, 2009 Yes, but did you read the CBO's assessment of current reform efforts? Which basically says that nothing currently on the table will actually cut costs?-- Tom Aiello [email protected] SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
lawrocket 3 #5 July 17, 2009 QuoteMeasured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs—Medicare, Medicaid, and Social Security Yes. This makes sense because as the population ages tyhe more must be spent. It's a ponzi scheme for which the return is paid for by those new investors who come into it. These experiments in socialism grew and metasticized. What would make sense would be to slowly phase them out, grandfathering people in over the years. If they are not there when I get older - I'll be cool with that. I'm sure that I could do more with the nearly $400 per month I pay into Social Security. If the system is not a Ponzi scheme (as some have suggested) employees' failure to pay into it should cause no disturbance to it. It it IS a Ponz scheme and people opt out, it will collapse. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
jcd11235 0 #6 July 17, 2009 QuoteIf the system is not a Ponzi scheme (as some have suggested) employees' failure to pay into it should cause no disturbance to it. It it IS a Ponz scheme and people opt out, it will collapse. That a disruption of a program's income causes a disturbance in that program is not an indication of a Ponzi scheme. I'm sure you realize this, though I recognize that since it isn't consistent with your "honest" libertarian rhetoric, you leave it out. You'll find very few entities with long term obligations to pay out benefits to those who have paid premiums that would not experience a disturbance if their income were disrupted.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
TomAiello 25 #7 July 17, 2009 If the program is fully funded by invested funds, why would it need further input to maintain it's payout obligations? It should be able to cut off new enrollment at any time and hold financial equilibrium.-- Tom Aiello [email protected] SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
incendium 0 #8 July 17, 2009 I would agree on "Or mandatory weight loss for the majority of Americans" but a recent poll form our experts in medical America said that most Americans that are overweight still reach old age just like the rest of us healthy in shape peeps and have about the same mortality rate.....although as pointed out on several talk shows and news reports, our cost to increase national medical care is directly tied to need aka obese people NEED medical care since they are apt to be in NEED more often than those that take care of themselves. A poor analogy is that we are just like cars, you take care of it with regular maint and good care it will last a lifetime or if you don't take care of it much more maint is needed and it breaks often.....my .02 worth v/r Paul "Never argue with an idiot, they will only bring you down to their level and beat you!" Quote Share this post Link to post Share on other sites
justinb138 0 #9 July 17, 2009 Quote A poor analogy is that we are just like cars, you take care of it with regular maint and good care it will last a lifetime or if you don't take care of it much more maint is needed and it breaks often.....my .02 worth If the government was supposed to pay for every ding, dent, and scratch would people take better or worse care of them? Without some form of motivation or accountability to change (some type of negative outcome), there will be no change. It's exactly why government is always more costly than private enterprise - there's not motivation not to be. Quote Share this post Link to post Share on other sites
kelpdiver 2 #10 July 17, 2009 Quote I would agree on "Or mandatory weight loss for the majority of Americans" but a recent poll form our experts in medical America said that most Americans that are overweight still reach old age just like the rest of us healthy in shape peeps and have about the same mortality rate.....although as pointed out on several talk shows and news reports, our cost to increase national medical care is directly tied to need aka obese people NEED medical care since they are apt to be in NEED more often than those that take care of themselves. That is the problem now. Medicine in the US has evolved to cope with the diseases and ailments of obesity to a pretty good degree, so people are living as long, but having 6 figure procedures to allow it. Yes, the CBO (which I should remind everyone tends to use the most conservative - ie, worst case - values in their projections) hasn't found a proposal yet that will actually work to save money. But doing nothing will also fail. It's just a shame that no one has proposed a national fat camp, or some real commitment to health. As I view our oil consumption as a national emergency to tackle now, the same is true for this. Yesterday I read an article that claimed that the end of cheaper gas will bring a great improvement in our lifestyles. We'll walk more, and live closer to needs to save money. Or at the least, that we'll spend our money on gas instead of restaurants. That every $1 increase/gallon will reduce obesity by 10%. Unfortunately, I don't believe it to be nearly so pronounced. One aspect I appreciated about the two Bush presidents, as well as our governator, is that they set a good example on lifestyle. The elder Bush was profiled in ESPN. The younger one seems a bit clumsy, but quite outdoorsy. Clinton, otoh, was the guy that ran to McDonalds. Reagan was far too old to do this. Obama is so young, that it doesn't say nearly so much as #41 skydiving in his 80s. Quote Share this post Link to post Share on other sites
TomAiello 25 #11 July 17, 2009 Quote...It's just a shame that no one has proposed a national fat camp, or some real commitment to health...our governator, is that they set a good example on lifestyle...Reagan... Didn't Reagan launch Schwarzenegger's political career by naming him "national exercise czar" or some such?-- Tom Aiello [email protected] SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
kelpdiver 2 #12 July 17, 2009 QuoteQuote...It's just a shame that no one has proposed a national fat camp, or some real commitment to health...our governator, is that they set a good example on lifestyle...Reagan... Didn't Reagan launch Schwarzenegger's political career by naming him "national exercise czar" or some such? I don't think that post was nearly as significant as the Terminator campaigning for Bush in 1988. Or his movies in general. Quote Share this post Link to post Share on other sites
TheBachelor 5 #13 July 17, 2009 QuoteYes, but did you read the CBO's assessment of current reform efforts? Which basically says that nothing currently on the table will actually cut costs? Well, the Libs aren't going to let a little thing like facts slow them down...There are battered women? I've been eating 'em plain all of these years... Quote Share this post Link to post Share on other sites
jcd11235 0 #14 July 17, 2009 QuoteIf the program is fully funded by invested funds, why would it need further input to maintain it's payout obligations? You answered your own question. The program is not fully funded by invested funds. It is essentially a pay as you go fund, with extra funds being invested into a trust fund.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #15 July 17, 2009 QuoteQuoteIf the program is fully funded by invested funds, why would it need further input to maintain it's payout obligations? You answered your own question. The program is not fully funded by invested funds. It is essentially a pay as you go fund, with extra funds being invested into a trust fund. Except for the part about there being a trust fund, yes. Quote Share this post Link to post Share on other sites
jcd11235 0 #16 July 17, 2009 QuoteExcept for the part about there being a trust fund, yes. Did you not realize there is a trust fund? There is.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
rushmc 18 #17 July 17, 2009 QuoteQuoteExcept for the part about there being a trust fund, yes. Did you not realize there is a trust fund? There is. Really? Can you show me the report that shows how much is in it?"America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
jcd11235 0 #18 July 17, 2009 QuoteCan you show me the report that shows how much is in it? $2.2 Trillion at the end of fiscal year 2008Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #19 July 18, 2009 QuoteQuoteExcept for the part about there being a trust fund, yes. Did you not realize there is a trust fund? There is. An IOU is not a trust fund. It's not back by any real assets other than our ability and willingness to pay it back later. Surely you've noticed the fallacy in that thinking in the last 15 months of economic turmoil. Even Al Gore thinks your line of reasoning is FOS. Quote Share this post Link to post Share on other sites
jcd11235 0 #20 July 18, 2009 QuoteIt's not back by any real assets other than our ability and willingness to pay it back later. That's the way bonds work. The risk lies in the ability of the bond issuer to repay. In this case, the issuer is the US government. US government bonds are among the safest (i.e. least risk) investment vehicles available. To believe that the trust fund is nonexistent because it is invested in government bonds would be erroneous.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #21 July 18, 2009 QuoteQuoteIt's not back by any real assets other than our ability and willingness to pay it back later. That's the way bonds work. The risk lies in the ability of the bond issuer to repay. In this case, the issuer is the US government. US government bonds are among the safest (i.e. least risk) investment vehicles available. To believe that the trust fund is nonexistent because it is invested in government bonds would be erroneous. The way our "trust fund" works is we have a Visa card with a 4T balance. We're not going to have that extra money later - we have enough trouble keeping up with the current bills. Like I said, revisit Gore's 2000 campaign. Quote Share this post Link to post Share on other sites
justinb138 0 #22 July 18, 2009 Quote That's the way bonds work. The risk lies in the ability of the bond issuer to repay. In this case, the issuer is the US government. US government bonds were among the safest (i.e. least risk) investment vehicles available. Fixed it fer ya. Quote Share this post Link to post Share on other sites
TomAiello 25 #23 July 18, 2009 Quote It is essentially a pay as you go fund, with extra funds being invested into a trust fund. Didn't Bernie Madoff run a "pay as you go" fund, with extra funds being invested into a trust fund?-- Tom Aiello [email protected] SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
jcd11235 0 #24 July 19, 2009 QuoteQuote It is essentially a pay as you go fund, with extra funds being invested into a trust fund. Didn't Bernie Madoff run a "pay as you go" fund, with extra funds being invested into a trust fund? Except for the trust fund part, yes. Just like that. If the Social Security trust fund is embezzled and those who collect the taxes steal the funds (i.e. keep them for their own personal use instead of investing them), then one could credibly argue that SS is a Ponzi scheme. Thus far, that hasn't happened with Social Security.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
jcd11235 0 #25 July 19, 2009 Quote Quote That's the way bonds work. The risk lies in the ability of the bond issuer to repay. In this case, the issuer is the US government. US government bonds are were still are among the safest (i.e. least risk) investment vehicles available. Fixed it fer ya. It didn't need fixing, as it wasn't broke. They are still among the safest investment vehicles available.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
