U.S. Lifestyle + "Healthcare" = Bankruptcy (June 19, 2008)
How and why is the U.S. going bankrupt? Let me count the ways. There's the debt/housing bubble popping, the inexorable rise in energy and food costs, the trillion-dollar war in Iraq, the Pentagon and Homeland Security budgets, the pork spending, ethanol subsidies, and so on.
But the two 800-pound budget-busting gorillas in the room nobody wants to face are our unhealthy lifestyle and our unsustainable, dysfunctional "healthcare" system.
I know budget deficits and all that are boring so I'll just cut to the chase: Any expense which rises by 10% per year in an economy which grows 2% on average will quickly bankrupt the nation. Study: Employer health care costs expected to increase nearly 10 percent this year and next.
That is the very definition of unsustainable growth in expenses. Healthcare already consumes 16% of the U.S. GDP and will soon consume 20%: (National Coalition on Health Care)
By several measures, health care spending continues to rise at the fastest rate in our history. (emphasis added, CHS)Can you say "train wreck"? How about "speeding off a cliff"? Nobody seems to be noticing, but the budget-buster which is pushing cities, counties, municipalities and government agencies to the edge of insolvency is skyrocketing healthcare costs. AC Transit to get an earful on fare hike ideas:
The (regional bus service) deficit comes mainly from a sevenfold increase in employee health care costs this decade.Recall that labor costs make up about 75%-80% of all government and service-sector firms' expenses. How can any organization or enterprise survive a major expense which rises 7-fold in only eight years? Short answer: they can't.
So who's happy with the current system? The doctors? No way: Eyes Bloodshot, Doctors Vent Their Discontent (New York Times)
As a physician, I could empathize. I too often feel overwhelmed with paperwork. But my friend’s discontent seemed to run much deeper than that. Unfortunately, he is not alone. I have been hearing physician colleagues voice a level of dissatisfaction with medical practice that is alarming.Meanwhile, back at the ranch, the elusive "cure" for so many of our ailments appears to be no farther away than our plates and the sidewalk outside:
Can Lifestyle Changes Bring Out the Best in Genes? New research shows diet and exercise may change how genes act.
A new pilot study shows that eating right, exercising and reducing stress may help keep chronic diseases at bay by switching on beneficial genes, including tumor-fighters, and silencing those that trigger malignancies and other ills.Look, I'm not trying to beat up on everyone who doesn't exercise and who eats too much and/or eats poorly. It is a struggle not to cave in to the constant brainwashing via 24/7 advertising and marketing from fast-food and packaged food companies which profit immensely from the illness-creating American diet. And it's a struggle to get out there and get some exercise, especially if you live some place far from parks, without sidewalks, without safe bike lanes, etc.
I'm religious about exercise but I gained a few pounds this year when I visited Hawaii and let myself eat like a much younger person. (Yikes!)
Despite the temptations to do nothing, there is no other choice: we have to take responsibility for our own health. The longer we do nothing, the sooner the nation will go bankrupt, starting with cities, agencies and local government, followed by companies which either blow off their employee health insurance or go under.
Longtime correspondent UKC recently submitted an item posted on Karl Denninger's excellent Market Ticker forum--excerpts from Mr. Fisher's (of the Dallas Fed) recent speech regarding unfunded federal programs (Medicare and Social Security).
Even the perception that the Fed is pursuing a cheap-money strategy to accommodate fiscal burdens, should it take root, is a paramount risk to the long-term welfare of the U.S. economy. The Federal Reserve will never let this happen. It is not an option. Ever. Period. No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations.The causal tie-in of our unhealthy lifestyle with that stunning unfunded liability was drawn by another poster to the forum:
There is one thing that the cold-raw figures fails to capture making the situation actually far far more dire than he even states:OK, here's where I would normally present a possible solution, but there isn't any in the form most hope or expect. The "solution" is to start acting like there won't be a Government Agency which will pay your medical bills. Because it is very clear that Medicare and most people's employer-paid coverage is unsustainable and will disappear or be cut so severely that it is the equivalent of disappearing. Maybe the government will be able to provide "palliative care," i.e. painkillers, and that's it.
Tweaking the system here and there by changing the parameters of who gets paid how much and which pills are allowed and which are not, etc., is truly re-arranging the deck chairs of the Titanic as the bow settles lower and lower into the cold, cold water.
Some smart people anticipate the Federal Government will nationalize healthcare as things deteriorate, but my question to them is: nice, but with what money? We're already facing a $100 trillion hole. Who is going to lend us $100 trillion? Even the Gulf Oil states don't have that much money, and why would they gamble on our ability to pay them interest, much less return their capital?
"Printing money to pay the bills," as Mr. Fisher of the Fed so eloquently pointed out, won't work, never has, never will. Hyper-inflation destroys the nation the money-press was supposed to "save," and Weimar Germany remains fresh in enough old minds not to be completely forgotten.
Although it might be lost on many present-day Chinese citizens, the wise "old ones" of that ancient culture held that food and medicine were one in the same; "disease comes in through the mouth." Many of you know cancer survivors who jettisoned the American lifestyle as part of their healing. Of course not all cancers are curable, and not all are lifestyle-related, but if food and exercise can modify gene expression, then the power of lifestyle should not be underestimated, either.
Whatever happens, we can safely predict the "healthcare"/illness-inducing-lifestyle system as it now stands will fall, and there won't be enough money, capital or resources to construct something this unsustainable and this ineffective again.
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