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Don’t Blame the Politicians for the Budget Crisis – We Voted for Them

July 30, 2011

As the August 2nd deadline approaches, many Americans are mad at Congress and/or the President for this game of budget brinksmanship. A few commentators have talked about healthcare costs being an important factor in the debt, but I don’t think they emphasize it enough. Let’s spend a few moments getting our facts straight.

Here are the major expenses of the federal government in 2010, which totaled approximately $3.7 trillion.

(I’m doing my best to fairly translate data from tables from the U.S. Census Bureau. I find them a little confusing and inconsistent from one table to the next.)

The federal government took in only about $2.2 trillion in 2010.

These data mean that individuals paid about $1.8 trillion in income, social security, Medicare, and unemployment taxes; and received $2.2 trillion in social security income, Medicare benefits, Medicaid benefits, other income security benefits (unemployment, housing, food stamps, etc.), and VA benefits. Most Americans would still like other federal functions to exist such as national defense, highways, the justice system, national parks, etc.

Healthcare is the single biggest piece of the federal budget, which mostly consists of Medicare and Medicaid. If you think the situation is bad now, remember that the baby boomers are just now starting to retire and collect Social Security and Medicare benefits. The ratio of workers to retirees is about 3:1 now. That will change to 2:1 in about 30 years. But the inefficiencies of American healthcare aren’t limited to government programs

For this next exercise, I realize this trade-off would never work as cleanly as I imply. I just want you to appreciate the order of magnitude.

The U.S. spent about $2.6 trillion on healthcare in 2010, which consumed about 18% of the GDP. Most countries in Europe spend about 9% of their GDP on healthcare; some a little higher, some a little lower. Therefore, if the U.S. had a similar healthcare system as Europe, and these inefficiencies were eliminated and used to actually pay our current U.S. government obligations, $1.3 trillion would be available, which would nearly eliminate the yearly federal debt.

The next time you want to blame politicians for our mess, look in the mirror. Politicians only echo the wishes of the voters, and for decades we’ve been voting for politicians who promise something-for-nothing. It sounded good. We wanted to believe it. So they got our votes.

U.S. voters lack courage. Don’t expect politicians to make courageous and difficult decisions if the voters don’t support these decisions. Neither party is blameless, I’ll just say this. If you lean more Democrat and believe the federal government should fund lots of programs to socially engineer the country, then vote for politicians with concrete plans to raise taxes. And it can’t just be on the rich. Only about 50% of Americans pay income tax, and that isn’t right either. We all need skin in the game. If you lean more Republican and believe the federal government should be smaller, then vote for politicians with concrete plans to decrease benefits. Phrases such as “eliminate waste, fraud, and abuse” are cop-outs and don’t fix anything. Meaningful cuts mean there will be a new contract between America’s elderly/disabled/poor and the taxpayers, and these people will receive less than they do now.

A constant of the American dream has been that one generation’s children will do better than the current generation. Those days are over, because the current generation of workers and retirees has lived way beyond its means for decades, and an exorbitant healthcare system is one of the prime examples. Those debts are now coming due, and our children will be stuck with the bills. The only real question left is how bad will those bills be? I ask all of us to make sacrifices now so that our children will not be crushed by the debt of the excesses of this generation.

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4 Responses to Don’t Blame the Politicians for the Budget Crisis – We Voted for Them

  1. Christopher Gregory on July 30, 2011 at 7:44 pm

    Excellent post. I wish – REALLY wish – that there were more doctors like you who would do two things. FIRST, I would wish them to formulate and publicize as reasoned an approach to the understanding of the problem as you do here. Recognition of the problem en masse is a first step and recognition by a critical slice of the problem pie (physicians who provide our care) is essential. There are thousands upon thousands of physicians out there who know exactly what the problem is, yet there is a pervasive apathy about sounding off on the mess that has been created – both in the economic sense regarding our orgy of healthcare gluttony, and second in recognizing that we Americans have become a Petri dish for growing moldy politicians who are the hapless boobs driving our bus. Enough of them and their self-interested, partisan antics!

    SECOND – the last time I did a reality check, physicians are a highly respected segment of our society. I would urge physicians everywhere to get off their duffs and show the people that the real engineers of healthcare have had enough and won’t stand by meekly any more as everyone else with their thumbs in our pie get to call the shots.

    Wish, wish, wish.

  2. Dad on August 1, 2011 at 7:41 pm

    Dr. Young:

    I appreciated this article as much as any of the posts you have done. I agree with Mr Gregory, you should devote more of your time and energy to trying to get this kind of information across to the general public. It seems like the Star- Telegram has op-ed pages where submitters can bring articles of their passion to the forefront. Have you thought about trying to get more real life information out into the media on articles like the above? Keep up the good work, I enjoy your writing, keep it up.

  3. Christopher Gregory on August 8, 2011 at 12:57 pm

    In the aftermath, and to follow up on this insightful post by Dr Young – who’s really to blame for the mess we have on our hands? Consider this carefully and thoughtfully electorate, as you watch the values of stored wealth (like your 401(k) and other investments you’ve made) being eroded. And wonder aloud in the presence of other intelligent beings if there are enough voices out there which can be raised in an effective manner to get rid of the garbage in Washington. And I’m not talking about more insurrectionists who call themselves the tea-partiers.
    Blame all of the people who are pointing fingers – executive branch, most assuredly the Congress and the talking heads at Treasury Department and Federal Reserve. And American voters, who elected them…. take a big bow.
    Republicans are already calling it “The Obama Downgrade.” Democrats are calling it “The Tea Party Downgrade.” And the Treasury is calling it a disgrace—saying it was brought to you by the same incompetent idiots at S&P who rated junk housing bonds AAA.
    Regardless of what you think about the right or wrong logic of S&P’s downgrade, there’s no question that the U.S.’s financial position has deteriorated massively in the past decade – we just got what’s coming to us. Just think, last week a significant portion of the American government was eager to force a default in the debt-ceiling debate just because it was having a hissy fit about what it wanted.
    Given those two factors, the debt downgrade was perfectly reasonable. And as much as politicians try to blame it on “the other guys,” they’re all responsible. As are we for hiring them.
    Here’s something to contemplate, as you think about how subservient the U.S. has become to China’s whims. Consider this, reflecting on all of the power brokering that went on from the White House to stave off the S&P downgrade, and Treasury shrilly saying that S&P made a $2 trillion dollar mistake (ridiculous!). Consider that China might have made a terrifying power play by quietly stopping further protests against the downgrade from the White House and Treasury. How? Because of our political instability (our Achilles heel) China saw to it that the U.S. debt was successfully downgraded in its ongoing quest to dethrone the U.S. dollar as the world’s reserve currency. The threat from China was this: “let the downgrade happen or we (China) won’t attend any more Treasury auctions.” Translation – “stabilize your out-of-control government and economy or find someone else to loan to your American gluttony.”
    We can only hope that, if Americans do vote for “change” in 2012, we don’t elect an extremist in his place. Other countries in similarly tough economic circumstances have done this, and the result has been disastrous.

  4. Tracie Updike on August 22, 2011 at 12:44 pm

    I just don’t see an end to the high cost of healthcare. As a family doctor every day I have a patient (whom never paid into Medicare) demand some thing from Medicare IE new artifical leg for an 84 year old with bad arteries who got the amputation and now got the 10,000.00 leg and now they want hearing aids. If every one is going to live to 100 they need to work longer and pay more money into Medicare.

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