In the coming election one of the favorite issues that the Democrats are going to push is nationalized health care for all provided by the Government, the question has to be, are they nuts? Now you might think that question is harsh or even inflammatory, but when you look at the state of Social Security it becomes quite clear that handing the health care system over to them would be a disaster.
Social Security is going to be paying out more than it brings in in revenue by the year 2009 according to the Congressional Budget Office, This is a program that started out taking only 2% of our income in taxes and had a retirement age of 55, it now takes 12% of our income and the retirement age is now headed to 67 and the program has only been around for 60 years, so our children 60 years out might be asked to pay 20% of their income and retire at 79 and the system would still be in trouble.
Let us review this from a purely economic standing point, if you earned an average income of $50,000 for your highest payed 30 years of employment (this is how the monthly benefit is determined) and you are lucky enough to make it to the retirement age, your benefit would be $1,500 per month, now if you lived 10 years on that you would get $180K, sounds good? well, if you payed taxes for 40 years you would have payed in around 250K, most will never come close to getting back what they payed in and millions will never see a dime because they will never make it to retirement, and it is still in financial trouble.
Now lets say that the program just required us to save and invest that 12% of our income for retirement, and lets say they regulated what we could invest in to say a few carefully selected mutual funds, CDs, Bonds, interest bearing savings accounts, etc… and those investments returned on average 5% annually, you would retire with almost $480K in your account, this would provide $4,000 per month for 10 years and more considering that the money would be earning interest every year during your retirement, by the time you retire 5% would be about $13K every year on that $480K that you had built up.
Now if you only lived 2 years passed the retirement age you would be able to leave your family in very good shape, and for those who say that Social Security is a safety net and that people would get left out, lets say that if you die before you use the funds, whatever is left will be taxed at a 25% tax rate and the rest goes to your family.
Now, Health care is 1/3 of our economy, and I'm sorry but if they can not run a solvent retirement program that mostly serves the retirement population on 12% of our income, (it does cover other things , like my brother breaking his back and he received a $9K benefit payment, but still, that means 10 years of retirement and he gets only $190K of the $250K that he payed in) what do you think is going to happen when they try to provide health care to every citizen and undocumented immigrant that makes it past the border?
For the deficit hawk Democrats out there, Social Security, Medi-Care and Welfare take up 2/3 of the entire federal budget today, they are on a path to take up the entire 100% of the federal budget within 15 to 20 years under the current tax structure and programs being offered, that means that ALL other federal spending at that time will be deficit spending, military, education programs, EPA, commerce, Justice, etc.. will be deficit spending.
Now, if they can not afford Social Security with 12% of our incomes, they will have to take 20 to 30 % of our income to cover health care for everybody and still run the entire federal government on deficit spending.
Which brings me to the question, Universal Health Care from the Government; Are we Nuts?