Independent American News

A Federal Reserve Banker says we have a $85.6 trillion bill and that is just for Medicare.

Richard W. Fisher, President and Chief Executive Officer, Federal Reserve Bank of Dallas, spoke at the Commonwealth Club of California on May 28, 2008.

The entire speech can be found here:

http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

Please sit tight while I walk you through the math of Medicare. As you may know, the program comes in three parts: Medicare Part A, which covers hospital stays; Medicare B, which covers doctor visits; and Medicare D, the drug benefit that went into effect just 29 months ago. The infinite-horizon present discounted value of the unfunded liability for Medicare A is $34.4 trillion. The unfunded liability of Medicare B is an additional $34 trillion. The shortfall for Medicare D adds another $17.2 trillion. The total? If you wanted to cover the unfunded liability of all three programs today, you would be stuck with an $85.6 trillion bill. That is more than six times as large as the bill for Social Security. It is more than six times the annual output of the entire U.S. economy.

Six Times Social Security? So that means on top of Medicare we only owe $14,266,666,666,666.66. Funny how that 666 number always seems to pop up whenever I write about Social Security.

So that is really just a trifling 98.8 Trillion. Why the Federal Reserve can just print that up. It is obvious we will just have to start printing up $10,000 Federal Reserve Notes to cover these kind of high costs. After all Zimbabwe is now printing up One Billion Dollar Notes, so why can’t we. Why all we need is just Ninety-nine Thousand billion dollar notes like Zimbabwe now prints and the debt is covered. Right Mr. Fisher? What Mr. Fisher. That may not work?

“We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid.”

But there has to be some good news. This is American, Right Mr. Fisher…!

Let’s say you and I and Bruce Ericson and every U.S. citizen who is alive today decided to fully address this unfunded liability through lump-sum payments from our own pocketbooks, so that all of us and all future generations could be secure in the knowledge that we and they would receive promised benefits in perpetuity. How much would we have to pay if we split the tab? Again, the math is painful. With a total population of 304 million, from infants to the elderly, the per-person payment to the federal treasury would come to $330,000. This comes to $1.3 million per family of four—over 25 times the average household’s income.

In other words folks… You cannot pay your fair share! (So please stop accusing me of not paying mine.)

But don’t worry. Mr. Fisher has some other solutions. We can lick this and maintain American Socialism if we just…

Clearly, once-and-for-all contributions would be an unbearable burden. Alternatively, we could address the entitlement shortfall through policy changes that would affect ourselves and future generations. For example, a permanent 68 percent increase in federal income tax revenue—from individual and corporate taxpayers—would suffice to fully fund our entitlement programs. Or we could instead divert 68 percent of current income-tax revenues from their intended uses to the entitlement system, which would accomplish the same thing.

Suppose we decided to tackle the issue solely on the spending side. It turns out that total discretionary spending in the federal budget, if maintained at its current share of GDP in perpetuity, is 3 percent larger than the entitlement shortfall. So all we would have to do to fully fund our nation’s entitlement programs would be to cut discretionary spending by 97 percent. But hold on. That discretionary spending includes defense and national security, education, the environment and many other areas, not just those controversial earmarks that make the evening news. All of them would have to be cut—almost eliminated, really—to tackle this problem through discretionary spending.

SEE! Nothing to it AARP! You guys just keep on voting to enslave your grand kids and every other grandchild. Cash those Social Security Checks and shuttle off the hospital every time your tummy hurts because, after all, you earned those benefits (just keep lying to yourself or your stomach will hurt more and the bill will go up) and you are going to collect every dime you paid along with interest and penalties even if it does have to be beaten out every single mom’s pay check or struggling dads or even kids working part time for Wal-mart and cannot afford insurance because of the Medicare and Social Security taxes that they know they will never see again. (You see it’s a tax not a trust fund.) You retired folks must be so proud to be Americans knowing how well off you have left your children and grandchildren. What Grandparent would not be proud knowing he left each of his Grandchildren with “$330,000” debt so that they could play golf and have a reverse mortgage and go to the doctor every time their bowels don’t work too well? And if your feet hurt or your legs are a bit tired just get one of those great new mobile chairs and charge it to your Great Grand kids. It shouldn’t add much to their already “$330,000” debt.

Hang in there though you ever demanding Social Security beneficiaries. More Good news from that crazy radical right wing extremist Federal Reserve Banker Mr. Fisher:

No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations. For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact. The decision we must make is whether to shoulder a substantial portion of that burden today or compel future generations to bear its full weight.

My vote is for the $99.2 Trillion less. 99.2. Wait a minute. What was that? $99.2 Trillion?

Sorry I scared you before. My math was way off. I wrote it was  $99.8 Trillion. HUGE difference. Billions of dollar difference. So we should be okay now.

Forget I ever wrote this piece.

This entry was posted on Sunday, August 10th, 2008 at 1:26 pm and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.