Thursday, September 10, 2009

Medicare does not work - at least not like people think

As part of the current health care debate, one of the frequently used arguments is that Medicare works. People like their Medicare and they're getting treated. That sounds great, right?

Well, where does the money come from? Similar to Social Security, it comes mostly from the payroll taxes of those that are currently working. You won't pay the bulk of your Medicare plan. You've been paying for your parents' Medicare. Your children will pay your Medicare. The only problem is that if things continue, they won't be able to. Healthcare costs are rising too quickly and there won't be enough working people. Both Medicare and Social Security are simply Ponzi schemes. As long as there are enough working people to cover the required taxes, all is well (in terms of coverage and the balance sheet).

Money doesn't grow on trees. When the government provides a service, it isn't free. It's the trap of many social programs. Somebody else pays and you get the benefits.

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