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Friday, March 04, 2011

For those who still believe in the efficacy of government

Here are some stories to open the eyes of even the most naive observer about the inefficiencies and structural problems of government

The numbers are eye-opening
for the amount by which states have been understating the amount that they owe public employees for their pensions.
The pension funds for state and local workers in the United States are understating the amount they will owe workers by $1.5 trillion or more, according to some economists who have studied the issue, meaning that the benefits are much costlier than many governments and taxpayers thought.

Doubts about government pension accounting have been voiced by analysts for years, but with shortfalls in state and local pension plans exacerbated by the recession, the push to refigure pension fund shortfalls has gained political momentum.

The trillion-dollar gap arises from the government method of accounting, which several experts say significantly underestimates the cost of future pension payments.

"It's been a perfect storm," said Alicia Munnell, director of the Center for Retirement Research at Boston College. When the pension liabilities are correctly tallied, "you get a very, very large number."
Such stories cast a different look at what governors such as Scott Walker, Chris Christie, and John Kasich have been trying to do. The states have been making overly optimistic projections about the returns on investments in those pension plans. Check out how big a shortfall your state is facing in 2012.

Here's another statistic to wake people up.
In a newly released report, the Government Accountability Office (GAO) estimates that, in fiscal year 2010, $48 billion in taxpayer money was squandered on fraudulent or improper Medicare claims. Meanwhile, the nation’s ten largest health insurance companies made combined profits of $12.7 billion in 2010 (according to Fortune 500). In other words, for every $1 made by the nation’s ten largest insurers, Medicare lost nearly $4.

This is sobering news for the minority of Americans who (for some reason) continue to think that government-run health care is a model of efficiency and cost-effectiveness. Last year, total outlays for Medicare were $509 billion; therefore, Medicare spent nearly 10 percent of its outlays on fraudulent or improper claims. Actually, it may have been even worse than that: The GAO writes that this $48 billion in taxpayer money that went down the drain doesn’t even represent Medicare’s full tally of lost revenue, since it “did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount.”
It kind of puts the efforts of the Democrats and Obama to put as much as possible of our health care under government control in perspective, doesn't it?

And if you had hope that a ban of earmarks would make a difference, Democratic Representative Jim Moran isn't concerned.
In response to a question about whether earmark bans have "curtailed" the Appropriations Committee's power, Moran responded, "No, and I have to say — and I'm going to be as candid as possible — the appropriators are going to be okay because we know people in agencies and so on. We will continue to do the best job we can for the country and to some extent for our congressional districts because that's our job as well."
It's nice that he can celebrate his back-door deals to grab a bigger chunk of federal money for his district. Sadly, he's probably right.


pumping-irony said...

Real estate magnate Sam Zell was recently interviewed on CNBC. He talked breifly about an encounter he had with a congressman regarding the ObamaCare bill. Note his question and the response: "I asked the simple question to the first guy I met, and I said: "What about the 11th year? You guys have constructed this health care bill with six years of costs and ten years of revenue. What about the 11th year?" and the guy looked at me and said, 'I'm 80.' I rest my case. You know, that's... that's... You wanna get scared."

The quote is about 1 minute in:

Rick Caird said...

What is a little Medicare fraud when the overhead is so low. The real problem is the huge profits the insurance companies steal from the rest of us. What? You say the total profits are less than the fraud? Never mind.