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Let’s take a little look at how government spending on Medicare and Medicaid has increased since their inception, versus how private spending (in a heavily regulated world) has increased over that same time period.

  • Between 1970 and 2008, government spending on Medicare and Medicaid grew from $28.1 billion to $1.107 trillion.Adjusting for inflation, the $28.1 billion in 1970 is the equivalent of $155.7 billion today. So government expenditures increased by 611% times in real terms.
  • During this same time, private spending increased from $46.8 billion ($259 billion today) to $1.232 trillion – an increase in real terms of 376%. That is not small amount, but it is a little more than half as much as public spending has increased.

When Medicare was passed in the 1960s, the Ways and Means Committee estimated that annual spending for hospital care under Medicare in 1990 would be $9.6 billion. What was it in actuality in 1990? How about $67 billion. Do we really believe that the costs of the new program will not do the same thing? Under what alternative model of the world are you working if you wish to hold such a view? And what a great way to “fix” the explosion in health care costs! Use the sector that has costs increasing at almost twice the rate as the private sector. Awesome! If the new bill is off by a factor of 6 in a mere 25 years, how much does that mean we will spend on health care by then? The answer of course is that it doesn’t matter – we could never spend that much on health care (OK, don’t quote me on that), we will have to ration care long before those days arrive.

5 Responses to “Throwing Gas on the Fire”

  1. jb says:

    Can anyone tell me whether anyone ever looked at CBO’s track record regarding their financial projections versus actual outcomes? How useful has this Congressional oracle been with respect to forecasting revenues (given the complete lack of dynamic effects — e.g. supply side considerations) or anything else? What about expenditures, do they account at all for the subsidy effect on when guesstimating how much health care consumers will spend?

  2. Harry says:

    Well, now being next month of Medicare largesse, I got a $700 a month raise is this a great cuuntry, or what?

  3. Harry says:

    I should add that the metaphor is well- chosen.

    And jb, the CBO does not use dynamic scoring, which is false, fallacious, stupid, self-serving, et cetera. Nobody uses their theories when they are investing their own money. OK, stupid people do, providing the other side of the trade. Do you want to have the CBO be your investment advisor, and how much do you wish to win by handicapping that horse?

    This is not an attack on the wise jb, who broke the code.

    jb, for most of history, except for us, people have been ruled, not free. Having grown up free, I and I assume wintercow, am jealous of our rights as free men, and are jealous of the rights for anyone human who wishes to support those rights, not given by a King, but naturally. We owe our freedom to no one, not even to an atheist sovereign. Our religion matters not: the question is whether people will use their will to take our freedom away from us, and this conflict has gone on since the fight for the waterhole.

    The present conflict assumes there is one waterhole, and the question is who will die of thirst, the water buffalo, the three apes, or the leopard?

    The free man looking at this situation goes off to a river, or digs his own well, and lets the other animals eat each other, leaving the waterhole undrunk, waiting for the next animal to drink carefully.

  4. Speedmaster says:

    I just got a $5800 bill for my teen daughter’s orthodontia. We can’t really afford that. Why should I have to pay for it? Don’t we “deserve” it? Why should healthcare for my arm or heart be a “right,” but not for our teeth?

  5. […] I agree. So double down on an already bad bed. See here and here for a tiny little reminder of just how bankrupt government health care has and will make […]

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