In 2012, I created this chart, which mapped out US federal government spending on healthcare from 1960 to the Congressional Budget Office’s projections up to 2022, which was the most recent data they had available at the time. For a while now, I’ve wanted to update that chart to address some criticisms people had.
First, I wanted to see if there had been any changes in the overall trajectory of the spending. There is only one direction this graph can ultimately go and that is down, at which point we will have a very serious economic situation, probably one more serious than anybody living has ever witnessed.
The progressive left thinks the CBO has an interest in making the budget look as bad as possible so the government could push for unpopular austerity on the poor and middle class. In addition, they don’t think debt matters. Based on the past spending curve, I believe the governments figures are accurate, and that these numbers are big enough to matter. While it’s too early to say for certain, so far the updated graph shows the situation worsening, just as the CBO has predicted.
Yesterday, on the eve of the nation’s most celebrated spectacle, the Super Bowl, it was announced that actor Philip Seymour Hoffman had died from a heroine overdose, reportedly with the needle still in his arm. Of course, Hoffman is responsible for his own actions, especially given that he had numerous opportunities to benefit from rehab and was taking medicine to counteract the addictive nature of the drugs. In short, he had resources many don’t have access to.
However, we will argue here that there is plenty of blame to go around, and much of it at the feet of the world’s only global empire, the United States government, who has continually made available heroin and other drugs increasingly inexpensive, available and at a greater purity than would otherwise be possible for geopolitical gain. Read More
Definitions are important. Without correctly defining what the problems are, we can’t offer a workable solution. This is so obvious and yet despite enormous effort, there is no consensus on what kind of economic system we have right now.
Do we have a capitalist system, the bane of the left for as long as there has been a left? They would argue that capitalism in its purest forms descends inevitably into monopoly, despotism, and eventually wealth inequality. They say our current system is just capitalism doing what it always does. No mystery about it. Or are we in a form of socialism, like the libertarians would argue? They would say that pooling resources and risk inevitably leads to abuse from centralized power and the same kind of tyranny. Maybe we’re way past those definitions and our current system is merely a form of corporatism where corporations have ultimate power; then again, maybe it’s fascism and the government shares power with its partners in private industry. Maybe it’s all of these things or perhaps none of them. The point is, our definitions define the arguments and the solutions for ideologically inclined individuals.
In the 1970s, industrial capitalism faced ever increasing pressure from increasing energy costs and increasingly firm limits on consumption. As a result, controlling interest concentrated on generating wealth in the form of “financial capitalism,” which by its nature, produces nothing and is parasitic. Through this financial trickery, gains have been transfered to the financial capitalist increasingly at the expense of industrial capitalism. Read More
Yesterday, Federal Reserve Chairman Ben Bernanke announced that the government would not slow its bond purchasing (money printing) because the economy had not yet improved sufficiently. The magnitude of this decision is still being absorbed, but may have negative effects on the entire world in the coming years.
How exactly? This might be a bit wonky, but we’ll try to keep it light. Lets establish a few facts and we’ll see where it takes us.
1) Bernanke could have tapered, but decided he couldn’t afford even the modest rise in interest rates. This reveals how weak the government and the economy has become.
Consider that tapering of QE4 was priced in to the stock market, but it would have forced bond yields to rise significantly. Before Bernanke’s announcement, the 10-year was resting just below 3 percent, a unprecedented low level, but one that has been rising over the last 6-months. If the Fed slowed its money printing, the cost of government borrowing would have risen significantly and suddenly — adding perhaps as much as $170 billion a year to the debt. That the US government could not absorb this minor instability shows how week the government and its currency have become.
2) Despite propaganda to the contrary, the Fed’s manipulation of interest rates doesn’t save money, it takes it from everyone else and gives it to connected elites.
It should have been clear the day before the announcement that the Fed had no intention of tapering because the newspapers were filled with articles talking about how great QE was for American companies. Take this “news story” from Bloomberg: Read More
Poland recently announced that it was nationalizing the country’s private retirement accounts, their equivallent of 401(k)s. While residents will continue to have access to the funds just as they normally would, the move places private assets on the country’s public balance sheet. While this maneuver was in the works for sometime, of course, the devil is in the details.
The Polish pension funds’ organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation…
Finance Minister Jacek Rostowski said the changes will reduce public debt by about eight percent of gross domestic product (GDP).
The real reason Poland has worked to seize private assets is to make their debt to GDP ratio lower, causing their bond yields to fall and allowing them to borrow more money. Reuters reports that this “would allow the lowering of two thresholds that deter the government from allowing debt to raise over 50 percent.” Read More