I’ve always liked math, probably because there is no ambiguity. It’s either right or wrong, or said another way, there is no politics in math. In the case of Obamacare, formally known as the Affordable Care Act, the math just simply did not add up, and the problems were known. Anyone that did not sleep through 5th grade math class could deduce that Obamacare was unaffordable, and would result in a death spiral of diminished care, because costs would continue to rise exponentially faster than people’s ability to pay. Since the cost problem was never addressed, insurers would have to raise premiums or pull out of the system, which has already happened in several states.
This exponential math problem is the result of a fraudulent healthcare system that is infected with the same cronyism disease that has infected the other industrialized complexes that have leached onto a too powerful govt that not only requires too much money, but doles out preferential treatment to the highest bidder, which destroys the free market’s ability to provide the most value at the best price. This problem, that so many thought would not occur because they simply ignored it, will come to a head in 2017, due to the dubble whammy of costs rising exponentially and the low returns in Social Security due to ZIRP (Zero Interest Rate Policy).
The destruction of competition in the healthcare industry, paid for with bribes (donations to political campaigns by large corporations and special interests), coupled with taking the spending decision out ot the hands of the patient, has been the biggest reasons that govt spending on healthcare has increased an average of 9.3% PER YEAR for over 30 years. This is where 5th grade exponential math comes in, because if you grow anything at 9.3% every year for 30 years, the curve starts to go parabolic, that is straight up, making it unsustainable.
Students are often taught about the positive impact of compound interest on savings, which has been negligible over the last 8 years of ZIRP, and is destroying retirees and pension & insurance funds, but that’s a story for another time. However, how many times are students taught about the negative impact of compounding an expense, be it healthcare cost or interest from excessive debt?
The bottom line is for over 30 years healthcare and defense spending have been growing much faster than the economy (thus tax receipts) – an economy, by the way, that is almost 40% produced by interest-bearing debt. Bought off politicians that care more about their career, perks, and power are unwilling to prioritize our country’s expenses for fear of losing their lifestyle, resulting in an out-of-control budget that is sinking our economy and society.
The pension crisis will start hitting the periphery (foreign countries) in the next two years due to NIRP (Negative Interest Rate Policy), which could only be conconcted by Ivory Tower theorist that have zero practical experience and exceed Einstein’s defintion of insanity. If you want to better understand how NIRP is destroying the world economy, I highly recommend a recent Armstrong article and the links included. As the govt bond bubble pops, funds like Social Security that contain Treasury bond IOUs will become insolvent by late 2021, according to Armstrong’s data analysis.