Wednesday, April 26, 2017

Medicaid Nation, Our Debt and Tax Cuts

The problems for today's Americans began with LBJ. When he took power, he wanted it all. To him that meant that Communists respect that the US is the number one military nation and within that nation, prosperity for all. This is your basic guns and butter platform.
His problem was how do you pay for it? He didn't want to raise taxes because a recent tax cut was the most successful move by government in a long time. He thought that the prosperity side would generate enough revenue to cover the gun side. Stupid is what stupid does.
To compound the error, Johnson kept the war off the books. This is the most serious aspect. How can someone keep $3 billion a month off the books? He did this for his entire term. The government has been doing illicit ventures ever since except the billions is now trillions! The military is half our budget and it is all waste! Consider all the wasted lives and resources with Korea, Vietnam and now, the Middle East. This is what is wrong with America and our government. The military has too much power and fan angles things to do stuff and spend wildly without approval. They exert too much influence with our government, leaders and the media.
Thank you, Yogi Berra
The above is one half of the equation as to why America, the richest nation ever, is broke. The other half is globalism and the rest falls to Medicaid.
Dear reader, you hear about entitlements as the cause for America's problems. It is true that when LBJ started Medicare that he underestimated the costs. It is not true that it cost too much. Seniors pay into the program and everyone pays into social security. In fact, if the government had not used this money for other ventures like military world policing, the fund would be self-sufficient. The real problem under entitlements rests with Medicaid. Every state in the union is to blame for this problem. There is no money being paid into the program and this is where states put their problem child like mental disease, disability, dementia, nursing care and more.
Did you realize that 21% or one in five Americans receive Medicaid assistance? It provides medical coverage for 4 out of 10 American children. It covers nearly half of all our births. It pays for the care of two-thirds of people in nursing homes. It provides 10 million children and adults with physical or mental disabilities. It helps states with 60% of federal funding and this is all I know. There could be other loophole costs. This is the gorilla in our budget and it is big within our economy. It pays 16% of all personal care in America and it costs 9%(and rising)of federal domestic spending.
Kaiser Survey
Back in 2015 the Kaiser Family Foundation reported this on a survey it took. It found that two-thirds of respondents said that they were covered or knew a family member who was. My question is this: What about their friends? Can you see how this program is growing like a wild weed?
Debt and Future
No need to rehash our national debt, but Trump is going to compound it. Instead of taxing the rich like Obama said he would but didn't do, the Donald is proposing a tax cut with a plan to be revealed later today. Now, the original plan may never be instituted, but it does reveal his thinking. When you add things up like unfunded Medicare and Social Security along with a bigger, bloated military spending and the rising costs for Medicaid, we are doomed financially. He is playing this card now, to influence the Federal Reserve. The market believes he will get his way even if it means severe pain down the road. Why do I say that?
10-Year Treasury
On Monday it was 2.24%. This note is negative compared to inflation, but it is high when compared to the rest of the world which has real negative rates. Would you like some irony? Just two months ago in February, the rate was 2.71% and the Fed raised rates since then. For rates to move this much in a year is a lot never mind in just two months. The market believes rates will stay low for this year. The tax plan and the budget are in limbo, but our national debt keeps climbing which puts our dollar in peril. The borders are open, so not only people but culture is passing through. One sad import that they bring is the banana republic. Can you say, Welfare Nation?