The Contrarian

“In the investment markets, what everyone knows is usually not worth knowing.”

The Problem with Medicare for All

Medicare is a great system for the senior citizens. Just about all of their medical costs are paid for. The patient doesn’t have to worry about how much it costs. The government pays with money from “heaven,” or the printing press. The fact is that the government doesn’t have the money either.

The major cause of skyrocketing drug costs is that the biggest buyer of drugs, Medicare, is not allowed to negotiate prices.

Sounds ridiculous, right? Well in our land of lobbyists and members of Congress getting their campaign financing from major drug firms, this is possible.

Imagine if there was a law that prevented you from negotiating the price of a car when you buy it. Don’t you agree that car prices might double? The limit would be the “affordability” of the car. But if the government, with very deep pockets, is paying for your car, you wouldn’t care about how much it costed. Prices could double or triple, and no one would care.

The members of Congress would get some beautiful checks from the lobbyists of the auto industry and everyone would be happy, including investors in the auto companies. And that is how the game is, and has been played.

In an article called “The Politics of Medicare,”, wrote that “the Medicare Modernization Act of 2003 (MMA), which established Medicare Part D, included a ban on such negotiation. In theory, if the Centers for Medicare and Medicaid Services (CMS) could negotiate with pharmaceutical companies, the agency could leverage its purchasing power to pay less for drugs.”

I wonder how much it cost the medical providers in political contributions to get that phrase into the law.

The socialists, democrats, progressives or whatever they decide to call themselves this month, say that “Medicare should be for all.” We have no doubt if these uninformed and conflicted politicians, led by people like Pelosi, Waters, Schumer and Schiff would try to get it through Congress, they would never mention how much it would cost or how the government would pay for it.

Dr. Charles Blahous of the Hoover Institution said his study shows that “Medicare for all” would cost a staggering $32.6 trillion of 10 years. Or an average of $3.26 TRIILION PER YEAR. Currently the entire Federal budget (expenditures) is around $4 TRILLION. Therefore, the expenditure budget would just about double. Dr. Blahous says it’s a low estimate.

If the program is paid through higher taxes, here is what would be required, as calculated by Professor Balhous.

Even if we assume Washington could “tax” states for the $4 trillion they save by no longer running programs like Medicaid, they still need to raise everyone else’s taxes by roughly $28 trillion — which would represent a 60 percent increase in federal revenues. According to the Congressional Budget Office, this would require choosing among options such as:

1, Creating a new 31 percent payroll tax on top of the current 15.3 percent tax;

2. Imposing a 72 percent value-added tax (like a national sales tax);

3. Or raising income-tax rates by 35 percentage points across the board.

The other alternative and the more likely one to occur is that the US Treasury would have to ‘borrow’ the money, which is done by the Fed printing it and offering it in a round-about way to the Treasury in return for Treasury securities. And then the US would be on the same road as Argentina, Venezuela and Turkey.

The political Far Left is on the way to fulfilling the proposed plan of Professors Cloward and Piven from several decades ago on how to destroy capitalism and rebuild it in the theoretical model state of the “socialist” utopia. They said it is done by “overloading” the welfare system.

That is what the “open borders” policy, “unfettered and uncontrolled” migration from around the world and Universal Basic Income (UBI) is all about. Destruction of the current capitalist system that has worked well for over 200 years is essential to fulfill that agenda. The enablers are powerful members of the US Congress.

Only the voters can stop this insane agenda. It’s up to Americans to decide what they really want. And to make the right choice at the polls, the voters have to spend some time learning about the candidates.

For those not wanting to read, at least see how long a candidate has been in politics. If it’s more than 8 years, automatically do not vote for them. Career politicians should be rejected. They should come back home and live with the rest of us under the laws they helped to pass.