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Social Security and Medicare

The Real Crisis Jim Luke LCC Faculty PD Days May 17, 2011. Social Security and Medicare. Econproph.com http://econproph.com/presentations/. THE BOOMERS ARE OLD!. “Socialsecuritymedicareandmedicaid are busting the budget.” “WE HAVE TO DO SOMETHING SERIOUS AND CUT BENEFITS NOW!”.

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Social Security and Medicare

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  1. The Real Crisis Jim LukeLCC Faculty PD DaysMay 17, 2011 Social Security and Medicare Econproph.com http://econproph.com/presentations/

  2. THE BOOMERS ARE OLD!

  3. “Socialsecuritymedicareandmedicaid are busting the budget.” “WE HAVE TO DO SOMETHING SERIOUS AND CUT BENEFITS NOW!” THE BOOMERS ARE OLD!We are constantly told that:

  4. Nonsense.

  5. Social Security is OK. Medicare per se is OK. Healthcare is broken. Nonsense.

  6. 3 very different programs. Nonsense.

  7. Life is risky. SS is social insurance.

  8. SS not threat to gov’t. budget.

  9. 1 in 4 households 90% of people 65 66% half or more of their income 21% all their income All of us eventually, either direct or indirect. Who needs Social Security?

  10. 2 Functions: Cash flow (checking acct) Pre-pay Boomer bulge. Trust fund not needed. Current taxes = current bfts The SS Trust Fund.

  11. 28 years from now Assumes reduced taxable payrolls* Then still pay 83% of scheduled bfts Higher in real terms Projected Shortfall: 2040-2085

  12. …GDP must be near zero and nobody is working. For Social Security to be “bankrupt” and NOT able to pay any benefits….

  13. Social Security solvency is positively correlated with more employment and higher real wageBruce Webb. Angry Bear blog

  14. Social SecurityIs NOT In TroubleandDoes NOT Need to Be Cuteconproph.com, march 6

  15. Potential spending problem in 2020’s Medicare not really problem – Medicare is cheaper than private insurance. Other developed countries show an aging population does NOT significantly raise healthcare spending. Medicare

  16. US: $7,538 per person per year 2.5 x average Higher prices Higher usage per person Varied quality Healthcare Is The Problem

  17. Incentives wrong: no checks-balances Admin costs: 15-30% (double others) High error rates Monopolistic pricing & wage power 1/3 of Nursing Time is Documentation Healthcare Is The Problem

  18. 3% admin costs vs. 15-40% private Possible bargaining power Best practices If all were in Medicare: Save $58 to $400 billion per year Medicare Is Solution

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