Medicare Reform: The Great Default

Written by Gary North on December 7, 2012

Why will there be no Medicare reform until the government is at the edge of default? Because those calling for Medicare reform are so utterly boring that no one, especially in Congress, will pay any attention.

One well-meaning reformer wrote an article for MarketWatch, a mainstream, Keyensian site. She tried her best to make her multiple reforms coherent. She failed.

I have been writing professionally since 1967. I can spot MEGO articles within a few lines. What is MEGO? My Eyes Glaze Over. Here is a sample.

One way to inject competition into Medicare is premium support, an idea dating back to the 1997 National Bipartisan Commission on the Future of Medicare, chaired by two retired members of Congress, Rep. Bill Thomas (R-CA) and Senator John Breaux (D-LA).

Thomas and Breaux have retired from Congress, but the Medicare Commission’s premium support idea is now found in the House 2013 budget. Read it here on page 96 of the Concurrent Resolution on the Budget Fiscal Year 2013.

This is utterly hopeless.

This was introduced by this assessment: percentages out to 2080. No one in Congress cares about anything that takes place beyond the next election.

The Office of the Actuary of the Center for Medicare and Medicaid Services has estimated that without the projected Medicare spending cuts under the Affordable Care Act — cuts that may never, if history is any guide, occur — Medicare expenditures as a percent of GDP would grow from 3.7% today to 7.7% in 2050, to 10% in 2080. With the cuts, Medicare spending would be 6.7% of GDP in 2080.

This is a classic blah, blah, blah article. It fills space. There is no sense of urgency. There is no suggestion of a single unified reform. It is all “a little of this, possibly a little of that, one of these days, Real Soon Now.”

Policy conclusion in Congress: “Kick the can.”

Until there is an imminent crisis with identifiable constituencies, Congress will ignore the problem. It can get away with this. “Why poke your stick into a hornet’s nest?”

There is no political solution other than default. We will know this long before 2050.

http://teapartyeconomist.com/2012/12/07/medicare-reform-our-eyes-glaze-over/