The problem with the US is, every time we talk about health care and education, people immediately change the subject, and begin to talk about defense, tax breaks of the big companies, social injustice, people out of work, poor single mothers, etc. etc. I think that is because our education is so bad. Most people have lost the ability to reason. Is it a wonder why we've been discussing health care and education for as long as I know (30 years), and they are only getting worse everyday?
Here is something to think about. Even we abolish all the defense, the saving will not be enough to finance our medicare, because the expense of the latter would just grow even bigger, like a well-fed monster. Before we talk about allocation of the tax dollars, we need to talk about cost containment. Mr. Walker is correct. Our current medicare basically issues blank checks. And no amount of money will be enough to cover the blank checks.
I agree with EVERYTHING Mr. Walker said. (By the way, he is a good speaker. A lot of fun to listen to.) Medicare premium must be based on risk factor - these are insurance programs. Not social welfare. People have the incentive to avoid auto accidents because they will raise their permium. Illness should raise premium too so people will have incenvtive to avoid illness. I know. No one wants to be sick. But how many people think about diebetis, heart disease when they eat pizza, steaks, chips and sit as cough potato?
I believe in government managed health care facilities like the VA for those who do not have the money to pay for private health care, or for those who just need basic care (like me. I have a decent income. But I maintain good health. So I don't need expensive health care. Actually, at 60, I never got sick.) We do not have unlimited resources to pay for expensive procedures, like by-ass surgueries for everyone. If a person is already 65, and is in poor health. Why does he need a bypass sugery anyway? If he can pay for it with his own money, he should by all means get it. But I, as a tax payer, much prefer using that amount to cover basic health care for many younger people. In other words, I believe in rationing, which is what they do in Canada and Europe.
Americans are so spoiled. When it comes to health care, we believe sky is the limit. We want the best things money can buy. Is it not a wonder why the US healthcare providers has given us the most expensive service in the world? The policians now are talking about high quality, lost cost health care. Give me a break. If Cadillac was cheap, people would not want Cadillac any more!
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A Fiscal ‘Tsunami’
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When does this become a crisis?
First, Medicare is already in a negative cash-flow position. The Social Security surplus will start to decline in 2009. It is estimated to have negative cash flow in 2017. So those are some interim dates, but the most likely fiscal crisis that we would see is a reluctance on behalf of foreign investors to continue to buy our debt at the rates that they have in the past, for the interest rates that we are providing.
That is happening already. The Chinese are talking about moving [more] of their money into euros.
And OPEC nations are doing the same. The OPEC nations started before the Chinese did … It is really frustrating when the numbers are clear and compelling and when you know that you have a tsunami of spending that is heading for your shores, and yet you still have people partying on the beach. That is analogous to the situation that we face. At the same time, elected officials don't like to have to make tough choices, unless and until it is necessary, because they are afraid they might lose their job. My view is there are only two ways that you can achieve dramatic and fundamental reforms, one of which is if you have a crisis. The second is if you have committed, inspired, and determined leadership, and I personally think the second is preferable to the first.
Does the current social contract, whereby Americans at a certain age are entitled to Social Security payments and medical coverage, need to be scrapped or rewritten?
I think there is no question that we are going to have to review the current social contract. There will have to be modifications to both Social Security and Medicare; much greater modifications to Medicare than Social Security because the financing gap is multiple times greater. And I think we also have to recognize that our Medicare challenge is really a subset of the broader health-care challenge. Ultimately, we are going to have to reform our entire health-care system in installments over a number of years because if there is one thing that could bankrupt America, it is health-care costs.
To your mind, are any of the candidates out there in the '08 campaign offering sensible ideas to address these issues?
Once the nominees have effectively been determined, which I think will be in February or March of 2008, then I plan to focus more attention on what their specific proposals are, and I also propose to offer them a briefing on fiscal and other issues based upon GAO's good work. I have already had several candidates ask me to provide them a briefing, and I have done that.
Which candidates?
Well, I would rather not say which ones. I will tell you that it has been on both sides of the aisle, and I am only doing it right now on a request basis because there are so many candidates.
Fred Thompson declared last week that he aimed to reform Social Security by reducing benefits and also by creating voluntary investment accounts. Without commenting on the specifics of his plan, do you support some form of privatization for Social Security?
You have to keep in mind that Social Security is one of several elements of our retirement-income security system. Only 50 percent of workers in this country have a private pension plan. [And] we have the lowest personal savings rate of any industrialized nation. So, when you look at those two facts, you recognize that Social Security is very, very important, and that is why I think serious consideration has to be given to maintaining the basic Social Security program as a defined-benefit program that provides a strong safety net for people at or near the poverty level and encourages people to work longer because we need that for economic growth and other reasons. Now, I also think that in addition to [that], we need to consider a mandatory supplementary personal savings account that would be achieved through payroll deduction, that would go into a real trust fund, that could serve to provide an enhanced retirement benefit, and also would be transferable to one's heirs if you passed away before those funds were exhausted.
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