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Romney Picks Paul Ryan as VP

Spot the Wonder said:
works like one
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In 2011, Medicare spent $11k per recipient (page 6, calculations my own). In the USA, life expectancy at 65 is 17.9 years (page 107). Ignoring inflation, a Medicare recipient today would draw about $197k in benefits. You tell me how many people you know who've paid in $197k to Medicare. The math has worked to this point because because the number of workers per retiree has made up the difference. Longer life expectancy and declining birth rates are reducing the number of workers per retiree to a level that won't support current benefits.

The solution is to trim expenses and/or raise revenues to a level that the number of workers per retiree in a normal environment (i.e. not during a Baby Boom's prime working years) supports the system.
 
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TuffaloDeac10 said:
In 2011, Medicare spent $11k per recipient (page 6, calculations my own). In the USA, life expectancy at 65 is 17.9 years (page 107). Ignoring inflation, a Medicare recipient today would draw about $197k in benefits. You tell me how many people you know who've paid in $197k to Medicare. The math has worked to this point because because the number of workers per retiree has made up the difference. Longer life expectancy and declining birth rates are reducing the number of workers per retiree to a level that won't support current benefits.

The solution is to trim expenses and/or raise revenues to a level that the number of workers per retiree in a normal environment (i.e. not during a Baby Boom's prime working years) supports the system.
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you really didn't answer either of my questions
 
TuffaloDeac10 said:
In 2011, Medicare spent $11k per recipient (page 6, calculations my own). In the USA, life expectancy at 65 is 17.9 years (page 107). Ignoring inflation, a Medicare recipient today would draw about $197k in benefits. You tell me how many people you know who've paid in $197k to Medicare. The math has worked to this point because because the number of workers per retiree has made up the difference. Longer life expectancy and declining birth rates are reducing the number of workers per retiree to a level that won't support current benefits.

The solution is to trim expenses and/or raise revenues to a level that the number of workers per retiree in a normal environment (i.e. not during a Baby Boom's prime working years) supports the system.
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Let's say you make $50,000/year for 45 years, you and your employers would pay $65,250 into the program. You could EASILY buy an insurance or investment instrument that would return far more than $179,000.

Then you add those who don't make it to 65.

There are things that need to be changed but it's not a Ponzi Scheme.
 
Spot the Wonder said:
you really didn't answer either of my questions
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A Ponzi scheme typically pays its investors from money paid in from investors who come along later - as opposed to profit gained from the initial investements.

Medicare pays the healthcare costs for its beneficiaries from money paid in from beneficiaries-to-be.
 
RJKarl said:
Let's say you make $50,000/year for 45 years, you and your employers would pay $65,250 into the program. You could EASILY buy an insurance or investment instrument that would return far more than $179,000.

Then you add those who don't make it to 65.

There are things that need to be changed but it's not a Ponzi Scheme.
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This sounds like a post in favor of privatization.
 
Nope, privatization would lead to millions of seniors not being covered. Exactly what private insurer would cover a 75 yo man who had a bout of prostate cancer, diabetes and a heart attack?

also part and parcel of the privatization is the elimination of the doughnut hole fix and the elimination of lifetime limits on benefits.

The costs for privatization would be astronomical and would lead to the premature deaths of millions of seniors.
 
RJKarl said:
Let's say you make $50,000/year for 45 years, you and your employers would pay $65,250 into the program. You could EASILY buy an insurance or investment instrument that would return far more than $179,000.

Then you add those who don't make it to 65.

There are things that need to be changed but it's not a Ponzi Scheme.
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I've never said Medicare is a Ponzi scheme. In fact, I said "MEDICARE IS NOT A PONZI SCHEME," you can look it up. I said that on this very thread.

The Medicare trust fund buys Treasuries. The return isn't enough, run the math.

While I'm too lazy to run it myself, those who die before 65 are counted into workers per retiree. But bear in mind that an early death reduces both current workers and expected retirees.

It will always have the mechanics of a Ponzi scheme by virtue of the fact that current receipts go to pay current benefits. That's ok, though, it just needs to be sustainable. The math Medicare is based on worked for having the Baby Boomers in the workforce, it doesn't work for them being the retirees because they didn't reproduce as prodigiously as their own parents did.
 
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Spot the Wonder said:
Yes. Are you familiar with Medicare? Which part is like a ponzi scheme? How would you change that part? Additional question, how does that part differ from other health insurance providers?
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The part where current receipts fund other people's payouts features the same mechanics/cash flows as a Ponzi scheme. That's textbook. It's also not a problem in and of itself, unlike an actual Ponzi scheme and that's why I've tried to be careful in saying that MEDICARE IS NOT A PONZI SCHEME. I don't think it needs to be fundamentally changed, just brought in line with what future workers per retiree numbers can support. Sucks for the Boomers that they weren't as fertile as their parents.

In every other health insurance provider, the current beneficiaries are also currently paying premiums, which are generally related to their known health risks (smokers and fatties have higher premiums).
 
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Ryan's girlfriend in college was a black girl.

Most impressive.
 
By far the most compelling argument against Medicare being a Ponzi scheme is that paying taxes for Medicare is legally mandated. In a Ponzi scheme, however, the fraudulent inducement necessary to attract voluntary investors is what generates revenue.
 
A ponzi scheme always requires more and more people to feed it until it busts regardless of circumstances.

These entitlement programs are subject to the whims of demographics, but demographics can also turn more favorable too.
 
Along that line of thought, with the growth of the Hispanic community, the downturn of the size of families may change. The good news is our nation is not shrinking as much as European nations or Japan.
 
ChrisL68 said:
A ponzi scheme always requires more and more people to feed it until it busts regardless of circumstances.

These entitlement programs are subject to the whims of demographics, but demographics can also turn more favorable too.
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If the perpetrator of a Ponzi scheme could force new people to give as much money as he required and could erase all obligations when an "investor" died Ponzi schemes could probably go on for a long time, too. The market limits Ponzi schemes, although some gullible (and maybe some not so gullible) will lose money, at least the first time they believe unbelievable returns. Unlikely they will invest in a second Ponzi scheme.
 
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