by Karl Denninger, Market Ticker:

I love the long-winded excuses in this article….

Countries around the world that engaged in unsustainable spending and borrowing, like Argentina and Greece, have defaulted on their debt. While the United States is unlikely to default by becoming unable to pay its creditors because it prints its own money, it can default on the value of its debt in other ways, namely through inflation. Inflation is default by other, less direct means, however. Instead of default on debt by failure to pay creditors sufficient currency, default by inflation occurs by devaluing the currency, thus returning less value to creditors than they had initially loaned money over to the government.

Extreme inflation, especially when it appears suddenly and occurs with significant magnitude, disrupts economic activities and can cause a recession with grave financial consequences for businesses and workers. Moreover, inflation destroys the savings of Americans, taxing them by reducing the value of every dollar in their savings account. The United States can avoid fiscal collapse by adjusting the policies that are driving the country deeper into debt. The primary culprits here are social and economic programs that have been growing out of control for decades.

….

Despite the different nature of the programs, Medicare and Social Security are by far the most significant drivers of the impending fiscal collapse. As the federal budget becomes further unsustainable, change is inevitable. Lawmakers should approach these changes with deliberation and reform current policies gradually to enable the American people to adjust to them without doing unnecessary harm. Not reforming is not an option.

Again, this is crap.

And from a political “journalism” outfit like The Hill it is not only unacceptable it should be met with felony criminal charges of intentional fraud.

Social Security can be “resolved” at a reasonable adjustment to the tax rate, earnings cap or both.  Specifically, it would be cash-flow neutral by increasing “both halves” to 7%, or by lifting the cap somewhat (where you stop paying), or some combination of the two.  On an actuarial basis Social Security is reasonably sound; while it currently has a functional deficit of about 11% that’s within the realm of reason to correct.

There is no way to make Medicare sound within the realm of the current taxation and spending paradigm.  It was designed for an environment where medical spending was ~4% of GDP.  Medical spending has advanced by five hundred percent since then, most of it through felony price-fixing and other violations of 15 USC Chapter 1, exactly none of which the government has punished.

A standard vaginal birth hasn’t changed as to its essence since human beings first walked the earth.  The last “big thing” with regard to routine vaginal births was the epidural to reduce pain in the final states of labor which has been in active use for decades.  Inflated to the purchasing power of today’s dollars from the year of my birth you should be able to have a child in a hospital, with a two or three night stay, all-in including the epidural and care for both the infant and mother at a cost of about $1,000 right here, right now.  But the actual price today is at least 5x that high and often 10x as much for a routine uncomplicated vaginal birth and they throw both mother and child out same day.

In other words you get much less and pay 5-10x more.

You’re being robbed.  Period.

No worker made the decision to not indict the hospital administrators, drug companies and doctors for rampant price-fixing and other violations of 15 USC Chapter 1.  All workers are forced to pay into Medicare and were not parties to any of this fraud and felony.

It would require close to a 500% tax increase to bring Medicare into functional, long-term solvency.  That’s socially and fiscally impossible; attempting it would lead to an immediate, violent revolt as mathematically the incremental impact on the poor and middle class would render every member of both instantly and permanently destitute.  There are simply not enough rich people nor do they have enough money combined to attempt to levy the impact upon them.

If the government tries to screw the people to maintain the fraud in the system they paid into on a good-faith basis then the government should be removed and replaced — with all of the fraudsters imprisoned.  If the government refuses to leave then we should contemplate whether it’s time for 1776 Part II, given that this fraud now reaches $3 trillion on a yearly basis, or $25/per-person/per day and then on top of it the government proposes to steal the paid-in premiums which you have forcibly had taken from you for your entire working life.  If there is a just cause for actual no-bull**** rebellion stealing one dollar in five spent by every single citizen in the nation and reneging on a paid-in insurance plan which they government has intentionally allowed to go bankrupt due to fraud and felony while both cheering on the theft and screwing the people blind damn well ought to be it.

I repeat: If this is nonsense is resolved and the monopolies and other scams in the medical field are stopped Medicare is not broke; in fact the federal budget, without a single tax increase, immediately and permanently goes into surplus and over time the accumulated debt will all be retired.

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