President Trump's inherited a fiscal nightmare

 

Karl Denninger points out that President Trump has to deal with US government overexpenditure right now, or risk bankrupting the nation.  Medicare/Medicaid is undoubtedly the principal culprit.  Emphasis in original.

$296 billion in all revenues and $603 billion spent last month; all of which was with President Trump in office.

This, while Speaker Johnson (and Trump) both want to continue this insane level of spending beyond revenues -- more than a 50% deficit last month -- until the end of September.

. . .

Note that Social Security, which people will try to lump in, is not the problem.  It takes in a huge amount of tax (and pays out a huge amount); in contrast Health and Human Services spent $145 billion last month which is more than all income tax receipts deposited from individuals and more than 14 TIMES that deposited from corporations and yet the total deposited from Medicare tax was $28 billion -- or just nineteen percent of what was spent.

. . .

In total CMS has spent $1,030 billion thus far this year or one third of the total $3,039 billion spent by the Federal Government and yet it has received only $164 billion in taxes against that, or sixteen percent of what it has spent.

In addition prescription drug spend in Medicare has risen a stunning 80% over last year's run rate -- that currently stands at $74 billion against $41 billion this time last year while the entire last year spend was just over $100 billion.

Hospital payments are up 20% over last year and physicians payments are up 31%.

There's more at the link.

Mr. Denninger's solution is to enforce existing laws, which have not been applied to medical costs and entities despite having been on the books for years, even decades.  He makes a strong case for his position, and I can't disagree with it in theory - except for the practical consideration that if we did so tomorrow, the medical infrastructure of the entire country would grind to a halt, because no organizations such as hospitals, medical insurers, etc. would be able to take the hit in the short term.

That said, I don't see any other way to avoid it either.  If anyone is dependent upon Medicare or Medicaid for one's health care, they face a very uncertain future, because the money simply isn't there to sustain the current level of care and/or pay for future increases in cost.  It's a nightmare scenario for many of us, yet as the figures show, it's just landed right on our front lawns.  It might be punted a short way down the road by printing more money and spending against borrowings, but that's just reached a point where it's no longer sustainable.  The efforts of D.O.G.E. to cut government spending are laudable, but even they can't touch this sort of deficit between income and expenditure.  An axe has to be taken to the root of the problem - but all of our politicians are terrified to do so, because they know the backlash from voters will be savage and extreme.  They simply dare not do what has to be done, because if they do, they'll be voted out of office at the next available opportunity.

It's as simple - and as complex - as that.  We've reached a point of no return.  A solution has to be found, and one is available:  but to implement it, our politicians have to be willing to "fall on their swords" in electoral terms, and few of them are willing to do that - so they'll do nothing, by default, and pretend that it's beyond their control.  It's not, of course, but they will pretend otherwise.

Folks, good luck with this one.  We're all going to be facing it, and it's going to cost most of us a great deal of money over the years unless something drastic happens.  We should already be making plans to prepare for that, as far as it's possible to do so.

Peter